The Federal Trade Commission on Thursday released a policy statement that it will begin strictly reinforcing an existing rule to penalize companies that use unfair methods of competition.
The agency relaxed its implementation of Section 5 of the FTC Act in 2015, filtering its application based on the “rule of reason” test under the Sherman Antitrust Act of 1890.
Section 5 has been in existence since the FTC Act was signed into law in 1914. In 2015, the commission decided that it would not apply the policy if a restraint of trade is deemed economically “reasonable” through prediction.
The new policy statement details how the commission will police unfair tactics in consideration of the continuous evolution of anticompetitive behavior. The decision was made in a 3-1 vote by the commission in favor of restoring the section’s original purpose.
“When Congress created the FTC, it clearly commanded us to crack down on unfair methods of competition. Enforcers have to use discretion, but that doesn’t give us the right to ignore a central part of our mandate,” FTC Chair Lina Khan said.
She added that the statement puts them “on track to faithfully enforce the law as Congress designed.”
