Corporate & Securities Law

FTC Enforces Novel Interpretation of Section 5 of the FTC Act

By Matthew S. Wild

January 23, 2008.  The FTC challenged anticompetitive behavior under Section 5 of the FTC Act that was not a violation of Section 1 or 2 of the Sherman Act.  The FTC alleged that Negotiated Data (”N-Data”) reneged on its commitment to license its Ethernet technology to a standard-setting body on specificed terms.  That commitment had induced that body to adopt N-Data’s technology as the standard.  The FTC alleged that such conduct was both an “unfair method of competition” and an “unfair practice” in violation of Section 5.  N-Data entered into a consent decree agreeing to abide by the licensing terms that it had originally offered.  FTC Chair Majoras and Commissioner Kovacik dissented believing that Section 5 of the FTC Act does not reach such conduct.  The FTC and Dissenting Statements and Analysis to Aid Public Comment are attached.FTC Statement (NData); ; Majoras Dissent (NData); Analysis to Aid Public Comment (NData)

Full post as published by Antitrust Commentary on March 10, 2008 (boomark / email).