Friday, August 01, 2003

Antitrust News: FTC Ups the Ante

Yesterday the Federal Trade Commission issued a "policy statement" on the possible future use of "monetary remedies" in antitrust cases. In most antitrust cases, you see, the FTC generally seeks injunctive remedies, i.e. orders not to engage in a particular business practice. Monetary remedies, in contrast, seek to directly seize property from offending businesses, either in the form of "restitution" to alleged victims or by "disgorgement," where the government takes all profits allegedly earned from anticompetitive activities.

Viewed alone, the Commission's policy statement amounts to nothing more than a restatement of existing theories on potential uses for monetary remedies. Placed in context, however, it seems to me that the FTC is sending a message to certain businesses—like Brown & Toland Medical Group—that there will be a price to pay for challenging the FTC's authority and not settling right away. Monetary remedies, after all, are of little benefit in settlement cases, the majority of the FTC's docket, because most businesses would fight rather than see all of their profits "disgorged." Thus in conparison, settling for injunctive relief meets the FTC's need to regulate while leaving the majority of businesses intact.

Every business that asserts its rights however acts in defiance of the FTC's mission to regulate the economy without question. In these cases, restitution and disgorgement are powerful weapons to hold over businesses—a nuclear option, if you will.

No comments: