August 13, 2015

Rob Davis reacts to FTC’s Section 5 guidance in Modern Healthcare and Law360

2 min

Venable counsel Rob Davis reacted to the Federal Trade Commission's (FTC) newly issued Section 5 guidance in Modern Healthcare and Law360 on August 13, 2015. Section 5 of the FTC Act gives the agency authority to police and stop businesses from using unfair methods of competition. Under the new guidelines, the FTC will generally consider cases to pursue using a rule of reason-style test and a focus on consumer welfare. The agency will not use its Section 5 authority to pursue matters covered by other federal antitrust laws.

Davis told Modern Healthcare that the news guidance was "pretty general" and that it is unlikely they will lead to increased enforcement. "If the staff knows a particular kind of case is likely to be supported by the commission, they'll start looking for that kind of case," he said.

Citing cases from the 1970s where the FTC targeted conduct that could raise prices but was not misconduct, Davis said the new guidance seems to "eliminate some types of cases from the commission's agenda." He said such matters would likely fall under the principle saying the FTC will consider efficiencies and business justifications.

Davis echoed these comments with Law360 saying the new guidelines take "two nightmare scenario cases ... off the table," citing the 1970s actions and the use of Section 5 to go after conduct covered by other laws.