A Solution in Search of a Problem

A. Douglas Melamed, Sep 16, 2013

The fundamental problem with the “unfair methods of competition” prong of Section 5 is that it is hopelessly vague. The language is almost meaningless, and there will never be a body of case law to give it meaning in the way that the thousands of antitrust cases have given meaning to the Sherman and Clayton Acts. That is not a serious problem when there is an understanding that, just as countless other laws are not enforced, Section 5 will not be enforced beyond the reach of the Sherman Act. But when Federal Trade Commissioners make clear that they intend to apply Section 5 to conduct that is not reachable by the Sherman Act, its vagueness sends to the business community uncertain signals about the boundaries of permissible conduct that could, because of their uncertainty, deter lawful and pro-competitive conduct. The vagueness of Section 5 also creates a specter of law enforcement activity driven largely by the unpredictable whim of whatever majority of Commissioners happens to exist at any particular time.

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