What About Green Stamps? A Comment on the FTC’s Section 5 Authority

Posted by Social Science Research Network

What About Green Stamps? A Comment on the FTC’s Section 5 Authority by Harry First (New York University School of Law)

Commissioner Joshua Wright has started his tenure as an FTC Commissioner by stepping into the long-running debate over the scope of the Commission’s authority, as broadly set out in a 1972 Supreme Court decision, FTC v. Sperry & Hutchinson Co. Commissioner Wright argues that S&H should be abandoned, just as “updated economic thinking” has led us to abandon other cases of that era.

In this essay I provide a closer look at the actual case that the FTC brought against S&H. I argue that the Commission’s decision was carefully based on competitive effects and consumer injury, and was entirely supportable as good competition policy. Rather than abandon S&H, what we should take away from the Supreme Court’s decision is that Congress gave the Commission authority to consider how marketplace competition affects real consumers, but without slavishly adhering to judicial views of the scope of the antitrust laws. By keeping touch with the benefits of marketplace competition — price, innovation, and consumer sovereignty — the Commission can avoid spinning away from the control of Section 5 while staying true to the broad authority that Congress intended to give it.