FTC Commissioners Dismiss Majority of Antitrust Case Brought by FTC Staff

Published On February 14, 2014 | By Stacey Brandenburg | Data Security, FTC & State AG, General, Litigation
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Magnified View of a MotherboardIn a decision with potential implications for privacy and data security cases as well as those arising out of the FTC’s Bureau of Competition, the Commission last week dismissed all but one of the antitrust claims brought by the FTC staff.  The McWane case was the first instance in which the Commission voted against itself, following an administrative trial, in nearly twenty years.  This decision confirms a willingness on the part of the Commissioners to push back, to some extent, on the FTC staff’s enforcement efforts.  That said, the dismissal resulted, in part, from the fact that the Commissioners could not reach a majority vote on the dismissed counts, and the fifth FTC Commissioner, who could have broken the tie, is still awaiting Senate confirmation.

In McWane, the Commission staff sought to bring seven claims against the company, which is the largest U.S. supplier of ductile pipe fittings used in public water systems.  The Commission granted the FTC staff authority to bring these claims.  Following a full hearing by the Administrative Law Judge, however, the Commissioners dismissed all but one of the counts, because no majority of the Commissioners found that the FTC staff had proved the relevant claims.

In recent months, the FTC has come under scrutiny, in part, for the peculiar internal process whereby the Commission serves as both advocate and arbiter in enforcement actions.  Admittedly, the posture and standards of review at each stage are different, but having the Commissioners play both roles can be seen as inherently untenable.  The Commissioners’ willingness to disagree with the FTC staff, in at least some instances, demonstrates an ability to remain somewhat neutral during the review process, and to take seriously a litigant’s challenge to the FTC staff’s positions.

Read the FTC Press Release Here

About The Author

Stacey advises clients on a wide range of privacy and data security issues. A veteran of the Federal Trade Commission’s Division of Privacy and Identity Protection, Stacey assists clients in responding to FTC investigations involving potential violations of Section 5 of the FTC Act, the FTC’s advertising guidelines, and the Children’s Online Privacy Protection Act (COPPA). She also helps clients respond to investigations by State Attorneys General. Stacey helps clients implement sound security and privacy practices and provides compliance training to employees. Stacey is on the faculty at American University’s Washington College of Law, where she teaches on technology and privacy-related issues.

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