Antitrust in the next decade—a role for the Federal Trade Commission?

• Author: Caswell O. Hobbs
• Published date: 01 June 1986
• Date: 01 June 1986
• DOI: http://doi.org/10.1177/0003603X8603100210
• Subject Matter: Article

The Antitrust Bulletin/Summer 1986

Antitrust in the next decade-s-a role

for the Federal Trade Commission?

BY CASWELL O. HOBBS·

I. Introduction: the origins of the Federal Trade

Commission

451

In 1914, Congress affirmed its commitment to the vigorous and

far-reaching enforcement

of

the antitrust laws with the creation

of the Federal Trade Commission as an independent administra-

tive agency with enforcement responsibility for the novel and

expansive provisions of the Federal Trade Commission Act.' The

Commission-which today has grown to several hundred law-

yers, economists, and supporting

staff-is

headed by five com-

missioners, each appointed by the president and confirmed by the

Senate. The chairman of the Federal Trade Commission, who

serves as such at the pleasure of the president, is the executive and

administrative head of the

agency.

To achieve some measure of

political balance and independence, the commissioners serve for

staggered seven-year terms, and no more than three commis-

sioners may be of the same political party.

Member of the District of Columbia Bar and Partner in the

Washington, D.C., office of Morgan, Lewis &Bockius. Mr. Hobbs held

numerous positions at the FTC from

1967

to 1973, including Assistant

to the Chairman and Director of the Office of Policy Planning and

Evaluation.

Act of Sept. 26, 1914,38 Stat. 717 (1914) (codified as amended at

15 U.S.C. §§ 41-64).

© 1986by Federal Legal Publications, Inc.

452 The antitrust bulletin

In one

of

its most expansive delegations

of

legal authority,

Congress empowered the Federal Trade Commission to identify,

investigate, and prosecute "unfair methods of competition . . .

and unfair or deceptive practices or acts in or affecting com-

merce.": This statutory mandate created two substantive areas

of

focus for FTC activities:

1.

Antitrust-the

prohibition

of

"unfair methods

of

competition"

which adversely affect competitive relationships; and

2. Consumer

protection-the

protection

of

consumers from "unfair

or deceptive" advertising or marketing practices.

Although the Federal Trade Commission shares jurisdiction with

the Antitrust Division

of

the Department

of

Justice over the civil

enforcement

of

the antitrust laws,' to avoid a duplication

of

effort the agencies have entered into a formal liaison procedure

whereby each notifies and discusses with the other any proposed

investigation and an understanding is thereafter reached as to

which will handle the matter.

The Federal Trade Commission Act was intentionally an open-

ended legislative enactment designed to complement the detailed

proscriptions

of

the Clayton Act. Congress envisioned

that

the

"unfair methods

of

competition" provision of section 5 of the

FTC Act would serve as a broad and adaptable standard which

would permit the Commission to cope with evolving business and

economic conditions. In many holdings, and often in very expan-

sive dicta, the federal courts have confirmed that the FTC

possesses antitrust authority which extends beyond the Sherman

and Clayton Acts, and which supplements and bolsters those

statutes.'

215 U.S.C. §45(a)(1).

3See 15 U.S.C. §21; FTC v. Cement Institute, 333 U.S. 683

(1948). Section 11

of

the Clayton Act gives the Commission concurrent

authority with the Justice Department and private plaintiffs to enforce

§§ 2, 3, 7, and 8

of

that

act. 15 U.S.C. §§ 13, 14, 18, 19. See generally

VAKERICS,

ANTITRUST

BASICS

§§ 2.01-2.03 (1985).

4See, e.g.,

FTC

v. Motion Picture Advertising

Servo

Co.,

344 U.S.

392 (1953)

("It

is also clear that the Federal Trade Commission Act was