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FTC Issues Policy Statement Broadening Authority to Enforce Federal Ban on Unfair Methods of Competition

  • The FTC issued a policy statement explaining that its authority to challenge unfair methods of competition under Section 5 of the FTC Act expands beyond the Sherman and Clayton Acts.
  • The statement details what the FTC views as the most significant general principles concerning whether conduct is an unfair method of competition. The statement follows the FTC’s rescission in 2021 of its 2015 Statement of Enforcement Principles Regarding Unfair Methods of Competition Under Section 5 of the FTC Act. In the 2015 statement, the CFPB stated that it would apply Section 5 using a “rule of reason” test that asks whether a restraint of trade is “reasonable” in economic terms.
  • The FTC asserts that, going forward, it will put businesses on notice about how to compete fairly and legally through enforcement and rulemaking.