Section 5 of the Federal Trade Commission Act prohibits unfair conduct in commercial practices. The core prohibitions are the bans on “unfair methods of competition” and on “unfair or deceptive acts or practices.”1 Despite the centrality of these provisions to the FTC’s work, they have long resisted attempts to define the concept of unfairness more precisely. This has created difficulties for enforcers, who have not had a defined tool to use, and also for businesses who seek to comply with these statutes, because the standards of conduct have not been clear.
This policy statement is intended to address these problems. It aims to provide a relatively short, consensus interpretation of Section 5’s unfairness provisions. It will lay out both their distinctive powers, and also the principled limits on those powers. The core concept of Section 5 is that it is a flexible, gap-filling measure designed to help sustain a market economy. It does this by ensuring that the marketplace has both a sufficient array of options available, and a sufficient ability to freely select among them.
Draft for an FTC Policy Statement on the Prohibitions Against 'Unfair' Business Conduct
June 24, 2024
