Federal Trade Commission v. Brown Shoe Company
Supreme Court
384 U.S. 316 (1966)
Brown Shoe Company (defendant), the nation's second-largest shoe manufacturer, entered franchise agreements giving retailers valuable services and benefits in exchange for the retailers' agreement not to sell competing shoe brands. The FTC (plaintiff) found these agreements an unfair method of competition under section 5 of the FTC Act and issued a cease-and-desist order; the court of appeals vacated the order, holding the FTC had exceeded its authority by regulating conduct that didn't independently violate the Sherman or Clayton Acts, and the FTC appealed.
Whether the FTC has authority under section 5 of the FTC Act to declare an exclusive-dealing arrangement an unfair method of competition without a separate showing that it violates the Sherman Act or Clayton Act.