September Antitrust Bulletin

September 2, 2015

FTC Releases Guidance on Section 5 Unfair Competition

On August 13, the Federal Trade Commission (FTC) issued the first policy statement on Section 5 of the FTC Act in the agency’s 100-year history in a bipartisan, 4-1 vote. The one-page policy statement outlined the broad principles of when the FTC will use its authority under Section 5 to police “unfair methods of competition in or affecting commerce.” 15 U.S.C. § 45(a)(1). The FTC’s statement identified three fundamental principles to guide its decision-making as to whether to challenge an act or practice as an unfair method of competition: First, the FTC will “be guided by the … promotion of consumer welfare” that underpins all antitrust laws. Second, the act or practice will be evaluated under “a framework similar to the rule of reason,” meaning it must cause or be likely to cause harm to competition “taking into account any … efficiencies and business justifications.” Finally, the FTC will consider whether Sherman Act or Clayton Act enforcement is sufficient to address the competitive harm before determining whether to proceed with a challenge under Section 5. FTC Chair Edith Ramirez made it clear in her statement announcing the guidance that the policy statement “makes no change in course,” but rather states explicitly the principles already guiding the FTC’s actions on unfair competition.

Ninth Circuit Stays NCAA Injunction Pending Decision on Appeal

A succinct, one-sentence order issued on July 31 by the U.S. Court of Appeals for the Ninth Circuit has deferred implementation of sweeping changes to the NCAA’s policy governing the compensation of student athletes. Those changes, outlined in an August 2014 injunction issued by a U.S. District Court in California, were scheduled to go into effect on August 1 of this year. The district court’s injunction would prohibit NCAA schools from agreeing to cap student athletes’ compensation for the licensing and use of players’ names, images and likenesses at less than each student athlete’s full cost of attendance, and would allow member schools to provide deferred compensation to student athletes for such licensing and use. The Ninth rel=”noopener noreferrer” Circuit, which heard oral arguments on the NCAA’s appeal of the injunction in March of this year, indicated in its order that it was not “expressing a view as to either party’s likelihood of success on the merits,” but instead staying the injunction only “to preserve the status quo until this court’s mandate has issued.”

Senate Passes Antitrust Whistleblower Bill rel=”noopener noreferrer”

On July 23, the U.S. Senate passed a bill aimed at protecting whistleblowers who report criminal violations of antitrust laws to authorities. Titled the Criminal Antitrust Anti-Retaliation Act of 2015, S. 1599, this bill introduced by Judiciary Committee Chair Senator Chuck Grassley (R-IA) and Ranking Member Senator Patrick Leahy (D-VT) becomes the second time similar legislation has been passed unanimously by the Senate. The U.S. House of Representatives failed to consider the version passed by the Senate in 2013. Whistleblower protections have been passed in multiple areas in recent years, including banking and financial services, and the proliferation of such statutes may indicate a better likelihood of success for the current version going before the House. The bill would prohibit an employer from discriminating against a whistleblower who reports antitrust violations to either his or her employer, or the government. The bill protects a whistleblower who has a reasonable belief that a law has been violated or who cooperates with an investigation or legal proceeding.

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