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FEDERAL TRADE COMMISSION Adam Candeub

MISSION/OVERVIEW

America’s antitrust laws are over a century old. In 1890, the U.S. Congress enacted the Sherman Act,' the first federal prohibition on trusts and restraints of trade. The Clayton Act,’ adopted in 1914, builds upon the Sherman Act, outlawing certain practices, such as price fixing, while bringing other business combinations, such as mergers and acquisitions, under regulatory scrutiny.

The Federal Trade Commission Act (FTCA),? also adopted in 1914, gives the federal government legal tools to combat anticompetitive, unfair, and deceptive practices in the marketplace, empowering the Federal Trade Commission (FTC) to enforce provisions of the Sherman and Clayton Acts. The FTCA prohibits “unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce.” Sections 8, 7, and 8 of the Clayton Act empower the FTC to block unlawful tying contracts, unlawful corporate mergers and acquisitions, and interlocking directorates. Under an amendment to the FTCA, the Robinson—Patman Act,* the FTC has authority to prohibit practices involving discriminatory pricing and product promotion. While the FTC has enforcement or administrative responsibilities under more than 70 laws, the FTCA and the Clayton Act are the focus of its regulatory energy.

FTC actions, therefore, turn on the antitrust principles and market principles it adopts. Modern approaches to antitrust stress that the objective of antitrust law is to assure a competitive economy—which in economic terms maximizes both allocative efficiency (optimal distribution of goods and services, taking into account consumer’s preferences, so that prices tend toward marginal cost) and productive