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Federal Trade Commission Enforcing Antitrust Laws

3. What entities are charged with carrying out the federal antitrust laws?

The Federal Trade Commission (FTC) is an independent federal agency primarily charged with developing regulations and preventing violations of the federal antitrust laws. The objective of the FTC is to protect consumers by preventing anticompetitive business practices. In pursuit of this objective, the FTC has broad authority to determine what constitutes unfair competition in the market. The FTC issues trade regulations that apply broadly across industries and trade practice rules that guide businesses operating in specific industries. While compliance with FTC practice rules is voluntary, it provides a safe harbor in the event of FTC inquiry into a business’s practices.

In the Sherman Act, Congress broadly defined “unfair” methods of competition to allow administrative agency and federal court interpretation to add specificity. Generally, the FTC makes the determination of what it deems to be “unfair”. If there is no deception or obvious antitrust violation, the FTC asks three questions, any of which may lead to a finding of unfairness:

•    Does the conduct injure consumers significantly?

•    Does the conduct offend an established public policy?

•    Is the conduct oppressive, unscrupulous, immoral, or unethical?

The FTC has the authority to regulate and take enforcement action against any business for conduct that it deems to be unfair. This may include coordinating efforts with the Department of Justice if the FTC encounters business activity that violates criminal laws.

•    Discussion: What do you think about the extent of the FTC’s authority to regulate and administer antitrust laws? Does the FTC have too much autonomy in determining what constitutes “unfair” competition? Why or why not? What do the above-referenced questions indicate about the objectives of the FTC in enforcing antitrust law?

•    Practice Question: What standard does the FTC apply when determining whether conduct runs afoul of the antitrust laws?

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