Healthcare industry players may wonder what to make of the Federal Trade Commission's new guidance on the business practices it will target as unfair competition under antitrust law.
FTC Chairwoman Edith Ramirez said the statement of principles “merely makes explicit what has been evident to close observers of FTC enforcement actions over the past few decades.” But Commissioner Maureen Ohlhausen, the lone dissenting vote on the long-anticipated guidance, disagreed. “Arming the FTC staff with this sweeping new policy statement is likely to embolden them to explore the limits of (unfair competition) in conduct and merger investigations,” she wrote.
Federal antitrust law states that “unfair methods of competition in or affecting commerce” are illegal, but the FTC had never formally issued principles describing what kinds of conduct violate that provision until last week. The commission's members disagreed about whether it was a good idea to constrain the FTC's ability to adapt to changing business practices.
According to the FTC statement of principles:
The commissioners agreed to provide some clarity on the matter after years of pressure from Republicans, who argued that the provision created uncertainty for businesses.
The unfair competition provision of the FTC Act, known as Section 5, is most frequently applied in situations involving invitations to collude, such as when one party proposes to a competitor that they both raise prices, but the competitor doesn't agree, said Richard Feinstein, a former director of the FTC's Bureau of Competition and now a partner at Boies, Schiller and Flexner.
Robert Davis, a former FTC attorney who's now with the firm Venable, called the new principles “pretty general.” It's unlikely, he said, that they'll lead to an increase in enforcement.