Can the Federal Trade Commission Use Rulemaking to Change Antitrust Law?

Abstract

Lina Khan, the new Chair of the FTC, proposes to use notice and comment rulemaking to make major changes in antitrust law by declaring many practices to be “unfair methods of competition” within the meaning of that term in section five of the FTC Act. She has the strong backing of President Biden and her Democrat colleagues. That raises two questions. Does the FTC have the power to use the notice and comment process to implement Section five? If it has that power, can it use the rulemaking process to make the major changes in antitrust law that Chair Khan proposes? Professor Pierce answers those questions in this article.

He concludes that the FTC probably lacks the power to use notice and comment rulemaking to implement section five of the FTC Act. He also concludes that, even if the FTC has that power, it cannot use that power to make most of the major changes in antitrust law that Chair Khan envisions. The FTC can use rulemaking to improve antitrust law by limiting the use of non-compete clauses in employment contracts, but the FTC can accomplish that goal more rapidly and with less legal risk by using a combination of the tools that it has long used—interpretive rules, policy statements, and adjudication.

Keywords: administrative law, antitrust law