Speaking at the American Bar Association Antitrust Section’s annual Spring Meeting on Friday, April 12, Henry Liu, Director of the Bureau of Competition at the Federal Trade Commission, said that parties that are under an antitrust investigation by the FTC should assume that the agency is looking not only at whether the conduct being investigated violates the Sherman Act, but also whether the conduct may fall into a “gray zone” and thus be subject to the FTC’s authority to police “unfair methods of competition” under Section 5 of the FTC Act.
Liu described this “gray zone” as encompassing conduct where, for technical reasons, the existing case law shows that the Sherman Act is a less attractive theory for the agency. Nonetheless, if the FTC determines that the conduct “harms the competitive process” through nefarious means such as deception or coercive tactics, bringing a Section 5 claim is a viable option. Enforcement of “gray zone” conduct under Section 5 is consistent with the FTC’s 2022 Policy Statement expanding the scope of what the FTC considers unfair methods of competition.
A potential example he cited is an invitation to collude, where there is not yet a reduction in competition. For cases involving such conduct that is “adjacent” to violations of Sections 1 and 2 of the Sherman Act, Liu said that the FTC will not hesitate to bring “standalone” cases under Section 5; however, such standalone enforcement actions remain rare.