On July 31, 2012, the Federal Trade Commission (Commission) issued a statement withdrawing the Commission's nine-year-old Policy Statement on Monetary Equitable Remedies in Competition Cases (Policy Statement). The statement's withdrawal was approved on a 4-1 split vote, with Commissioner Maureen K. Ohlhausen casting the lone no vote and issuing a dissenting opinion.
The 2003 Policy Statement was initially issued to determine the “appropriate circumstances for the use of monetary equitable remedies in federal court.” However, as the FTC noted in its recent statement, the 2003 Policy Statement created a “restrictive view” for equitable remedies the Commission had at its disposal, such as disgorgement and restitution that were only applicable in “exceptional cases.” The 2012 Commission Statement explains that by withdrawing the 2003 Policy Statement, the Commission will use relevant existing case law to assess its use of disgorgement and restitution as remedies.
The 2003 Policy Statement established three factors the FTC should consider in disgorgement or restitution cases: if the violation was “clear”; if a reasonable basis exists to calculate payment; and whether “other remedies are likely to fail to accomplish fully the purposes of the antitrust laws[.]” As the Commission's July 31, 2012, statement explains, the restrictions set forth in the 2003 Policy Statement were either redundant or overly burdensome on the Commission. The first factor of a “clear” violation brings a “heightened standard” of review under federal antitrust law for disgorgement cases. As the 2012 Statement explains, “[w]hehter conduct is common or novel, clearly a violation or never before considered, has little to do with whether the conduct is anticompetitive.”
The Commission's 2012 Statement explains that the second aspect of the 2003 Policy Statement, the existence of a reasonable basis for the calculation of remedial payment, simply restates existing legal standards of federal antitrust statutes. The third part of the 2003 Policy Statement, whether other plaintiffs exist that are seeking or may seek monetary relief, also creates an “undue burden on the Commission,” according to the 2012 Statement. The 2012 explains that the 2003 Policy Statement was written in a manner that makes that question mandatory, rather than one of several “usefully” asked questions in the decision process.
In her dissenting opinion, Commission Maureen K. Ohlhausen explains that the 2003 Policy Statement was adopted “through a 5-0 bipartisan vote” and received “unanimous endorsement by the Antitrust Modernization Committee” and from other antitrust practitioners. Ohlhausen's main concern is how the Commission's use of disgorgement will be viewed after removing requirements of a “clear” violation and the use of other sufficient remedies. Ohlhausen cites a lack of evidence to support the 2012 Commission's Statement that the 2003 Policy Statement “inappropriately constrained the Commission,” and suggests that instead of withdrawing the 2003 Policy Statement the Commission should have revised it.