Wednesday, October 2, 2013
Steve Salop (Georgetown) discusses Guiding Section 5: Comments on the Commissioners.
ABSTRACT: FTC Commissioners Joshua Wright and Maureen Ohlhausen have proposed that the Commission adopt Guidelines for the application of Section 5 to Unfair Methods of Competition. This short note comments on the role of Section 5 distinct from the Sherman Act. It suggests that Section 5 be used to attack and deter certain conduct that falls into gaps of the Sherman Act. This includes exclusionary unilateral conduct that likely leads to the achievement, enhancement, or maintenance of market power (as opposed to monopoly power). It also includes unilateral conduct such as invitations to collude and other practices that facilitate conscious parallelism, tacit or express collusion, but are not uniquely or sufficiently "unequivocal" or "consequential" to violate Section 2. The comment also explains why a limitation of Section 5 only to conduct with zero cognizable efficiency benefits would neutralize Section 5 and lead to under-deterrence problems and why a disproportionate harm standard also is problematical.