Repealing the Consumer Welfare Standard: FTC as Central Economic Planner?

Authors

Bryce Tobin

Abstract

The recent repeal of the consumer welfare standard and proposals for increased rulemaking authority threaten to give the Federal Trade Commission an unprecedentedly massive ambit under which to regulate. Under Section 5 of the FTC Act, the FTC is empowered to regulate unfair methods of competition as well as unfair deceptive acts or practices that affect commerce. As of 2015, the FTC was tethered to the consumer welfare standard when regulating under Section 5. However, in July 2021, the FTC abrogated the 2015 policy statement, thereby giving itself the ability to either replace the consumer welfare standard with a broader standard or in fact replace it with no intelligible standard at all. The effect of this abrogation allows the FTC to pursue a broad set of social goals with less scrutiny from outside authorities. Furthermore, there have been recent proposals to allow the FTC to determine new methods of unfair competition under Section 6(g) of the FTC Act. The expansion of this section not only represents a usurpation of legislative authority but also hinders the ability of the FTC to regulate. The net effect of these changes would harm companies and consumers by increasing the likelihood of errant intervention, increasing rent-seeking behavior by private interests, increasing inefficiency in the economy, and making it more difficult to create successful antitrust regulation.

First Page

218

Recommended Citation

Bryce Tobin, Repealing the Consumer Welfare Standard: FTC as Central Economic Planner?, 6 Bus. Entrepreneurship & Tax L. Rev. 218 (2022).
Available at: https://scholarship.law.missouri.edu/betr/vol6/iss1/14