- Long-awaited DOJ Report proposes enforcement standards for predatory pricing, bundled discounts, tying, refusals to deal, and exclusive dealing.
- FTC Commissioners commit to fill any "enforcement void" left by the DOJ's proposed tests, which they assert are unbalanced, are contrary to current law, and would make Section 2 cases "nearly impossible to prosecute."
- Extraordinary dispute between agencies highlights continuing need for companies to carefully assess all proposed activities covered by Report.
A rare public dispute regarding governmental enforcement of Section 2 of the Sherman Act erupted this week between the Antitrust Division of the Department of Justice (DOJ) and the Federal Trade Commission (FTC), the two agencies that share responsibility for enforcing the statute. The dispute arises from a DOJ Report, "Competition and Monopoly: Single-Firm Conduct Under Section Two of the Sherman Act" (the "Report"), issued September 8. The DOJ viewed its Report as a policy statement that would offer clear, objective standards for enforcement actions against various conduct regulated by Section 2. The FTC disagreed with many of the DOJ's core positions and, only a few hours after the Report was issued, sharply criticized it as "a blueprint for radically weakened enforcement."
This open disagreement between the agencies is particularly significant because it stems from their common attempt to offer more uniform guidance concerning Section 2. More than a year ago, the agencies held joint public hearings to develop a uniform interpretation of what constitutes illegal and anticompetitive single-firm conduct under Section 2. The DOJ Report and FTC response underscore not only a failure to create such uniformity, but also the uncertainty that many companies will face in trying to determine the implications of the agencies' divergent views. Given this uncertainty, both the DOJ and FTC positions are likely to be cited by plaintiffs and defendants in future private litigation.
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