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1 1 (January 11, 2023)

handle is hein.crs/govekez0001 and id is 1 raw text is: Congressional ~ Research Service The FTC's Competition Rulemaking Authority Updated January 11, 2023 On January 5, 2023, the Federal Trade Commission (FTC) proposed a rule that would prohibit noncompete clauses in employment contracts. The proposal relies on the FTC's putative authority to issue rules defining unfair methods of competition (UMC) under Sections 5 and 6(g) of the Federal Trade Commission Act (FTC Act). Other antitrust rules may be forthcoming. Such efforts implicate three unsettled questions. First, does the FTC Act provide the FTC with substantive UMC rulemaking authority? Second, if the statute does so, what is the scope of that authority? Third, is rulemaking an appropriate vehicle for implementing antitrust policy? This Legal Sidebar provides an overview of these questions. A separate Sidebar discusses the FTC's proposed noncompete rule. Does the FTC Have Substantive UMC Rulemaking Authority? Antitrust enforcement has traditionally proceeded via adjudication rather than rulemaking. In recent years, however, some commentators have argued for the expansion of the enforcement toolkit, contending that the FTC should activate its dormant competition rulemaking authority. The existence of this authority is unsettled. While there is case law holding that the FTC possesses UMC rulemaking authority, analysts have debated whether courts would reach the same conclusion if presented with that issue today. For the foundation of its UMC rulemaking power, the FTC has pointed to the broad language of Section 6(g) of the FTC Act, which empowers the agency to issue rules for the purpose of carrying out the statute. Because Section 5 of the FTC Act prohibits unfair methods of competition, the Commission contends, Section 6(g) provides it with the authority to prescribe rules identifying practices that fall within that category. Congressional Research Service https://crsreports.congress.gov LSB10635 CRS Legal Sidebar Prepared for Members and Committees of Congress

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