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

The Gap in the Application of Article 82 75
Legislative and judicial authorities alike convince us that the Federal
Trade Commission does not arrogate excessive power to itself if, in
measuring a practice against the elusive, considers public values beyond
simply those enshrined in the letter or encompassed in the spirit of the
antitrust laws. 82
The Supreme Court’s decision in this case adopts an expansive reading of
section 5 of the FTC Act. The Supreme Court held that section 5 enables
the FTC 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’ and to ‘proscribe practices as unfair or deceptive in their
effect on competition.’ 83 In addition the majority Statement for the FTC In
the Matter of Negotiated Data Solutions LLC states that the Act reaches
‘not only practices that violate the Sherman Act and other antitrust laws,
but also practices that the Commission determines are against public policy
for other reasons.’ 84
Thus, Section 5 of the FTC Act addresses a gap that is left by the inability
of Sherman Act to apply to certain anti-competitive conduct. The
Commission does not have the ability to capture the equivalent gap in
Article 82 at all.
Creighton et al (2008) argue that section 5 applies, inter alia, to ‘gapfilling’
cases, that is cases that may satisfy the economic requirements of
antitrust, but fail one of the legal elements of section 1 (usually the ‘agreement’
requirement) or section 2 (usually the ‘monopoly power’ element). 85
The type of gap-filling cases Creighton et al have identified 86 as the ones
82 FTC v Sperry & Hutchinson, 405 US 223, 239, 244 (1972). The court in FTC v Brown
Shoe Co 384 US 316, 321 (1966) stated that ‘[t]his broad power of the Commission is particularly
well established with regard to trade practices which conflict with the basic policies of
the Sherman Act and Clayton Acts even though such practices may not actually violate these
laws . . .’; In FTC v Ind Fed’n of Dentists, 476 US 447, 454 (1986) the court argued that
observing that the standard for ‘unfairness’ under the FTC Act is, ‘by necessity, an elusive one,
encompassing not only practices that violate the Sherman Act and the other antitrust laws, but
also practices that the Commission determines are against public policy for other reasons’. See
further: D Balto, ‘A Section 5 Enforcement Agenda That Even Bill O’Reilly Could Love’, FTC
Workshop on Section 5, 17 October 2008, www.ftc.gov.
83 At 239.
84 See Statement of the Commission, In the Matter of Negotiated Data Solutions LLC, FTC
File No. 051 0094 (23 January 2008), available at http://www.ftc.gov/os/caselist/0510094/
080122statement.pdf. Dissenting Statement of Chairman Majoras, In the Matter of
Negotiated Data Solutions LLC, FTC File No 051 0094 (23 January 2008), available at
http://www.ftc.gov/os/caselist/0510094/080122majoras.pdf; Dissenting Statement of
Commissioner Kovacic, In the Matter of Negotiated Data Solutions LLC, FTC File No 051
0094 (Jan. 23, 2008), available at http://www.ftc.gov/os/caselist/0510094/080122kovacic.pdf.
See further: T Leary.
85 S Creighton et al, ‘Some Thoughts About the Scope of Section 5’ FTC Workshop on
Section 5, 17 October 2008, www.ftc.gov.
86 Invitations to collude, (FTC’s consent order in Valassis, In the Matter of Valassis