Abuse of Economic Dependence - The Centre for European Policy ...

74 A Gap in the Enforcement of Article 82
involving commerce with foreign nations (other than import commerce)
unless—
(A) such methods of competition have a direct, substantial, and
reasonably foreseeable effect—
(i) on commerce which is not commerce with foreign nations, or
on import commerce with foreign nations; or
(ii) on export commerce with foreign nations, of a person
engaged in such commerce in the United States; and
(B) such effect gives rise to a claim under the provisions of this
subsection, other than this paragraph. If this subsection applies to
such methods of competition only because of the operation of
subparagraph (A)(ii), this subsection shall apply to such conduct
only for injury to export business in the United States.
Commissioner Leibowitz (2008) mentions that Senator Cummins of Iowa,
one of the main proponents of the FTC Act, emphasized that the reason for
the law was, ‘to go further and make some things offenses’ that were not
condemned by the antitrust laws. He added that ‘the only purpose of
Section 5 [is] to make some things punishable, to prevent some things, that
cannot be punished or prevented under antitrust law.’ 78 And Leibowitz
(2008) adds that Congress could have simply given the Commission the
ability to enforce the Sherman Act. But it didn’t. Instead, the plain text of
the statute makes it clear that Congress intended to create an agency with
authority that extended well beyond the limits of the antitrust laws.
The US courts in cases such as Keppel Brothers, 79 FTC v Brown Shoe
Company 80 and FTC v Motion Picture Advertising Service Company, 81
have affirmed the ability of the FTC to apply the FTC Act.
In FTC v Sperry & Hutchinson, Justice White speaking for a unanimous
view of the court posed and answered two questions:
The question [of the reach of Section 5] is a double one: first, does
Section 5 empower the Commission to define and proscribe an unfair
competitive practice, even though the practice does not infringe either
the letter or the spirit of the antitrust laws. Second, does Section 5
empower the Commission to proscribe practices as unfair or deceptive in
their effect upon consumers regardless of their nature or quality as
competition? We think the statute, its legislative history and prior cases
compel an affirmative answer to both questions.
78 J Leibowitz, ‘Tales from the Crypt’, FTC Workshop on Section 5, 17 October 2008,
www.ftc.gov.
79 FTC v RF Keppel & Bros Inc 291 US 304, 310 (1934).
80 FTC v Brown Shoe Co, 384 US 316, 321 (1966).
81 Federal Trade Commission v Motion Picture Advertising Service Co 344 US 392 (1953).