FTC Seeks Bipartisan Rules for Unfair Competition Enforcement

August 10th, 2015 by

legal-law-judgementThe Federal Trade Commission is hoping to finally clarify the portion of its 1914 mandate to protect consumers and commerce, when it establishes formal guidelines for when to prosecute companies for unfair competition.

Until now, the Commission examined each possible case of unfair competition in the same manner Supreme Court Justice Potter Stewart said he identified obscenity in 1964: “I know it when I see it.”

This had led to many grey areas and much uncertainty over what exactly is “unfair methods of competition in or affecting commerce”. It has also led to sometime rancorous disagreements among the five-person committee over whether to prosecute a company or not.  Two famous cases involved FTC prosecution of Microsoft over bundling Internet Explorer with Windows in the 1990s, and prosecution of Google for favoring it own content (or paid ads) in search results over competitors. The lack of written guidelines also leaves the process open to political influence, much like several Presidents have used the IRS to attack political enemies.

The difficulty in forging bipartisan guidelines is caused by more than petty politics. It’s mainly a result in an ideological disconnect between Democrats and Republicans. Democrats have favored a case-by-case approach, saying that hard and fast rules can’t adapt to changing markets, or entirely new markets spawned by technological advances (Google’s power over commerce could never have been foretold in 1914.)

Republicans, on the other hand, believe that having no defined rules unnecessarily create peril to companies, and makes the process ripe for government overreach (as well as politically-motivated abuse). Any needed changes could be addressed at a later date.

While details are unavailable, it is believed that the new formal guidelines will focus on consumer safety and emphasize the connection between “unfair” competition and anti-trust law. Some experts think an agreement could be announced as early as this week.