Late last year, the Federal Trade Commission issued a policy statement that superseded its prior policy statements and guidance concerning the FTC’s interpretation of the scope and meaning of unfair methods of competition as addressed in the Federal Trade Commission Act. The FTC indicated it would no longer follow the “rule of reason” inquiry and, instead, focus on trying to stop unfair methods of competition “in their incipiency based on their tendency to harm competitive conditions.”
The FTC stated an unfair method of competition need not cause current anticompetitive harm or include anticompetitive intent. Several commissioners of the FTC issued a statement last year supporting their issuance of the policy statement. In that statement, the commissioners acknowledged the FTC had allowed its authority under the FTC Act to regulate unfair methods of competition “to lay dormant” but that the FTC wished to “reactivate” that authority. Last week, the FTC proposed a new Non-Compete Clause Rule that would make it an unfair method of competition for an employer to maintain, enter into, or attempt to enter into a noncompete clause with a worker. Because the FTC has taken the position that a noncompete clause constitutes an unfair method of competition, the FTC has decided to outlaw noncompete clauses in most circumstances. The FTC is accepting public comments on its proposed rule until March 10, 2023.
