August 11, 2015 / 9:20 PM / 4 years ago

U.S. FTC expected to unveil policy on unfair competition enforcement

NEW YORK, Aug 11 (Reuters) - U.S. Federal Trade Commission Chairwoman Edith Ramirez was expected to unveil a policy statement as soon as Thursday on how the antitrust agency will pursue companies over unfair competition, sources close to the matter said.

Expected in a speech Ramirez will deliver in Washington, the policy would be the FTC’s first attempt to clarify a part of the 1914 law that created the commission and empowered it to pursue businesses for “unfair methods of competition.”

FTC spokesman Justin Cole declined to comment.

Some members of the U.S. Congress have called for more details on what constitutes unfair competition under that clause and the FTC’s powers of enforcement.

The clause was included in Section 5 of the 1914 Federal Trade Commission Act to allow the FTC to pursue conduct not covered by other federal antitrust laws. It has long been a source of debate over what conduct is prohibited, and how companies can know the FTC’s enforcement policies.

Commissioners are expected to vote on the statement on Wednesday. It was unclear how detailed it would be.

“This will be a first step,” with more details possibly coming later, said Jason Leckerman, an antitrust lawyer at Ballard Spahr.

“It’s going to force the FTC to be a bit more deliberate in what sort of enforcement actions it’s going to bring,” he said.

David Balto, a former senior advisor for the FTC’s enforcement program, said concerns about the unfair competition provision are overblown, as it has been used only rarely to pursue enforcement actions in recent years.

The FTC used Section 5 to win legal settlements with Intel Corp in 2009 and Google Inc in 2013. Both companies agreed to change some business practices to resolve FTC complaints over unfair competition.

Antitrust experts said enforcement actions under the unfair competition clause have waned since the 1970s, when the FTC brought unsuccessful cases against oil companies and makers of breakfast cereals.

While the FTC has won some remedies with settlements, it has been almost 50 years since it has won an unfair competition case in court, said former FTC chair William Kovacic.

Businesses “are more concerned than they should be,” he said.

In a speech last year, Ramirez said Section 5 enforcement actions will likely be largely reserved for conduct that falls outside the scope of the Sherman Act, which will remain the focus of most day-to-day enforcement efforts. (Reporting By Dena Aubin; Editing by Kevin Drawbaugh and David Gregorio)

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