For many years, antitrust practitioners have struggled to understand exactly how the FTC will analyze and enforce Section 5’s prohibition of “unfair methods of competition.” Counseling clients has been challenging. In a short one-page release on August 13, 2015, the FTC published its first ever policy statement in an apparent effort to address those uncertainties. These are the three “enforcement principles”:

“the Commission will be guided by the public policy underlying the antitrust laws, namely the promotion of consumer welfare;” “the act or practice will be evaluated under a framework similar to the rule of reason, that is, an act or practice challenged by the Commission must cause, or be likely to cause, harm to competition or the competitive process, taking into account any associated cognizable efficiencies and business justifications;” and “the Commission is less likely to challenge an act or practice as an unfair method of competition on a standalone basis if enforcement of the Sherman Act or Clayton Act is sufficient to address the competitive harm arising from the act or practice.”

In remarks highlighting this announcement, Chairwoman Ramirez described the enforcement principles as an “important milestone.” Indeed, on first reading, the phrase “rule of reason” stands out as a concept that all antitrust practitioners understand – and the FTC’s formulation is not controversial. But the devil really is in the details. What does the word “similar” in the second principle mean in this context? They must have intended the word “similar” to mean something and that something seems to be that they will continue to consider factors not typically understood to be a part of rule of reason analysis. Ostensibly to make sure there would be no misunderstanding, Chairwoman Ramirez repeatedly emphasized the continuing importance of “flexibility.”

This formulation – including use of the term “principles” rather than more definitive language – was the product of negotiation among the two commissioners favoring clear guidelines (Wright and the lone dissenter, Ohlhausen) and the three commissioners who remain enamored of the flexible, common law approach (Chairwoman Ramirez, Brill and McSweeny). In exactly the same vein is the FTC’s third principle: standalone Section 5 enforcement will be “less likely” if they feel Sherman Act or Clayton Act enforcement will be sufficient. One could parse that term in many different ways, but it is importantly different from “not likely” or “typically will not.”

An even more recent and unexpected development was the resignation of Commissioner Wright, a longtime proponent of clear guidelines. He stepped down from the agency on Monday, August 17, just four days after the principles were released. No doubt his move will add to speculation about what these enforcement principles really mean for the future. Mr. Wright simply said “it’s a good time to return to academia.”

So where does all of this leave us? Chairwoman Ramirez made clear that “our policy statement … does not signal any change of course in our enforcement practices.” Apparently, we have both “an important milestone” and “no change.” Probably, we are where we have always been – watching closely what the agency actually does. The rule of reason language may portend a little bit more emphasis on harm to competition, yet with the explicit proviso that a clean rule of reason bill of health may not carry the day. At least counsel who favor rule of reason analysis for their cases now have a clear hook on which to hang their arguments. Perhaps something is better than nothing even if this widely publicized step has been so comprehensively hedged.