## Facts

- A trade association of garment and textile firms claimed to create original women’s fashion and fabric designs that competitors copied without patent or copyright protection.
- The association organized to stop competition from sellers of copied designs, characterizing copying as “style piracy.”
- Members registered designs and created internal tribunals to determine whether garments were copies of registered designs.
- Members agreed to a concerted refusal to deal: they would not sell to retailers (and certain manufacturers) who sold copies or who would not agree to stop selling them.
- The association enforced the program through store “shoppers,” member audits, and fines for rule violations.
- About 12,000 retailers nationwide signed agreements to cooperate with the boycott program.
- The FTC found the program suppressed a rival form of competition in interstate commerce and constituted unfair methods of competition tending toward monopoly.

## Issues

1. Whether a coordinated boycott aimed at eliminating competition from copied, unprotected designs constitutes an “unfair method of competition” under § 5 of the Federal Trade Commission Act.
2. Whether conduct that tends toward monopoly and suppresses competition violates the public policy of the Sherman and Clayton Acts even without price-fixing or production limits, thereby supporting FTC action under § 5.
3. Whether alleged “reasonableness” or business necessity can justify a private combination’s concerted refusal to deal.

## Decision

- The Supreme Court affirmed the cease-and-desist order (as modified and affirmed below).
- The Court held the FTC could suppress the association’s boycott as an unfair method of competition.
- The Court concluded the FTC’s action was supported by adequate findings and consistent with antitrust policy.
- The Court rejected the association’s claim that evidence of the boycott’s reasonableness or necessity required a different result.

## Legal Principles

- Conduct whose purpose and practice run counter to the public policy expressed in the Sherman and Clayton Acts may be condemned by the FTC as an unfair method of competition under § 5.
- A practice may offend antitrust policy when it is short of complete monopoly but tends to create monopoly power and deprive the public of the benefits of free competition in interstate commerce.
- A combination may violate antitrust policy even if it does not fix prices, allocate markets, limit output, or reduce quality.
- A concerted refusal to deal used to coerce market participants and suppress a rival competitive practice is unlawful notwithstanding claimed industry benefits.
- Private groups may not create and enforce de facto exclusivity in unprotected designs through collective market power and boycotts.

## Conclusion

The Court sustained the FTC’s prohibition of an industry-wide boycott designed to eliminate competition from copied fashion designs, holding that § 5 reaches coordinated refusals to deal that suppress competition and tend toward monopoly, even absent traditional price or output restraints.


Fashion Originators’ Guild of Am., Inc. v. Fed. Trade Comm’n, 312 U.S. 457 (1941)