Earlier this month, the Federal Trade Commission published a Policy Statement on how the Commission will interpret and apply Section 5 of the Federal Trade Commission Act against “unfair methods of competition.” The new Statement replaces FTC’s 2015 Statement on the same subject, which the Commission withdrew in 2021 after President Biden appointed Lina M. Khan to be Chair. A November 14 WLF Legal Pulse post explains the new policy and its potential impact.

Commissioner Christine S. Wilson released a dissenting statement which, in a section discussing the Policy Statement’s failure to consider Section 5’s full legislative history, relied in part on a July 2021 WLF Working Paper authored by Hughes Hubbard & Reed partner William Kolasky. A statement by Commissioner Alvaro M. Bedoya, joined by other two majority Commissioners, also referenced the July 2021 Working Paper as well as a December 2014 WLF Working Paper by Mr. Kolasky when opposing Commissioner Wilson’s perspective on the Act’s legislative history.

In her dissent, Commissioner Wilson argued that “Congress intended a different path for Section 5 than what is unveiled today.” Citing to the July 2021 WLF paper, Commissioner Wilson makes the case that the author of Section 5 “believed that ‘unfair’ had economic content, consistent with the consumer welfare standard and the rule of reason.”

Mr. Kolasky authored the July 2021 Working Paper in response to the Commission’s recission of the 2015 Policy Statement. That paper relied heavily on the December 2014 Working Paper Mr. Kolasky authored, “‘Unfair Methods of Competition’: The Legislative Intent Underlying Section 5 of the FTC Act.” That paper provided a meticulously documented history on the principles Congress intended to govern FTC’s enforcement of Section 5 as well as an overview of how federal courts’ interpretation of Section 5 evolved into one that viewed “unfair methods of competition” narrowly.