Hatch Questions FTC Meaning of 'Unfair' Trade

The Federal Trade Commission has recently gone after a wide array of companies under its authority to police "unfair or deceptive" trade practices. The list includes Intel Inc., Voice Touch Inc., and Ticketmaster Entertainment Inc. Just today, the FTC invoked that authority in approving a settlement with U-Haul International Inc. over allegations of attempted price-fixing.

Not everyone is happy with the agency’s strategy.

The top Republican on the Senate’s antitrust subcommittee, Sen. Orrin Hatch (R-Utah), said today he is concerned that the “unfair or deceptive” standard is too vague. The standard comes from the FTC Act’s Section 5 — which is, as The National Law Journal reported in January, broader and less tested than other antitrust laws, including Section 2 of the Sherman Act.

Hatch, at a congressional hearing on antitrust enforcement, put the question to FTC Chairman Jon Leibowtiz: Who decides what the standard is?

“Ultimately, it will be the courts that decide,” Leibowitz said.

Hatch, cutting in, asked, “Are you saying that parties will have to go through a trial and an appeal just to find out what the law is?”

Leibowitz, who used to work for the antitrust subcommittee, downplayed that possibility. He said the FTC is working through consensus, noting at one point that commissioners approved the U-Haul settlement on a 5-0 vote.

“I don’t think any company would be surprised — and I have yet to meet a company that has been surprised — by our application of ‘unfair methods of competition’ to conduct that we believe violates the FTC Act,” Leibowitz said. He added, “You want us to stop unfair conduct that harms consumers. That’s what we’re trying to do.”

Hatch was the only Republican to attend the antitrust hearing, but some Democrats agreed with the FTC’s approach. Sen. Chuck Schumer (D-N.Y.), in asking Leibowitz about social-networking companies and consumer-finance companies, wondered whether Section 5 is sufficient. Leibowitz said it is.

Comments

[Jeff Stephan]

Good for the FTC, and for FTC Chairman Jon Leibowtiz. Finally . . . it is about time that the FTC performs the responsibilities that are, and were at the time of its establishment, expected of it. The FTC should increase its vigilance and exercise of authority to police "unfair or deceptive" trade practices across the economic landscape for companies that demonstrate anticompetitive behavior, intentions and leanings. The FTC has the responsibility to stop unfair conduct that harms consumers and the U.S. economy, and to institute processes and procedures that achieve this objective as a regular and integral operational component of performing its mission. I am disappointed that Senator Hatch does not readily and actively support such vigilance on behalf of the U.S. economy and consumer. Props to FTC Chairman Jon Leibowtiz and his staff.

[Sam Bernstein Law Firm]

Something should be done about TicketMaster and other sites like theirs - they do tend to raise overhead gradually.