## Facts

- The Federal Trade Commission brought an administrative complaint against the Cement Institute (a trade association), its corporate members, and certain officers and agents.
- The complaint alleged respondents collectively adopted and used a multiple basing-point delivered-price system for cement that produced identical delivered prices and terms at given destinations.
- The FTC found years of consistently identical prices, including in sealed bids, and treated the uniformity as the product of concerted conduct rather than independent competitive behavior.
- The FTC concluded the conduct constituted an unfair method of competition under § 5 of the Federal Trade Commission Act and also alleged unlawful price discrimination under § 2 of the Clayton Act as amended by the Robinson-Patman Act.
- The FTC issued a cease-and-desist order barring specified concerted actions, including using the system to maintain identical prices.
- The Seventh Circuit set aside the FTC’s order, and the FTC sought review.

## Issues

1. Whether the FTC has authority under § 5 of the Federal Trade Commission Act to condemn conduct that may also violate the Sherman Act.
2. Whether a parallel civil Sherman Act suit by the United States required the FTC to dismiss or stay its administrative proceeding.
3. Whether the FTC could apply its order to respondents whose cement sales were wholly intrastate when the alleged combination targeted interstate price competition.
4. Whether FTC commissioners were disqualified from adjudicating because they previously investigated basing-point pricing and expressed critical views about it.

## Decision

- The Supreme Court reversed the Seventh Circuit and remanded for further proceedings consistent with its opinion.
- The Court held the FTC may treat conduct tending to restrain trade as an unfair method of competition under § 5 even if the same conduct could violate the Sherman Act.
- The Court held the FTC proceeding could continue notwithstanding a later-filed federal civil action under the Sherman Act based on substantially similar misconduct.
- The Court held respondents engaged in the alleged combination to suppress price competition in interstate commerce were within the FTC’s reach, including firms whose sales were intrastate.
- The Court held prior agency investigations and public expressions of general views about basing-point systems did not, without more, disqualify the commissioners from deciding the case on the administrative record.
- The Court upheld the FTC’s determination that the pricing system, as used, functioned as a concerted anticompetitive scheme within § 5.

## Legal Principles

- Section 5 of the Federal Trade Commission Act authorizes the FTC to prohibit unfair methods of competition, including concerted conduct restraining trade, even where the same conduct may be actionable under the Sherman Act.
- The FTC’s administrative enforcement may proceed concurrently with Department of Justice antitrust litigation absent a statutory requirement to yield.
- Participants in a combination aimed at restraining interstate commerce may be subject to FTC orders even if some participants’ sales are intrastate.
- Administrative decisionmakers are not automatically disqualified for bias because they previously investigated an industry and formed general policy or legal views, so long as the adjudication is based on the record developed in the proceeding.
- Substantial evidence of sustained identical pricing and coordinated delivered-price practices can support a finding of concerted restraint and an FTC cease-and-desist order under § 5.

## Conclusion

The Court reinstated the FTC’s authority to attack concerted pricing practices as unfair competition under § 5 even when the conduct overlaps Sherman Act theories, permitted parallel administrative and judicial antitrust proceedings, rejected categorical limits based on “intrastate” sales within a broader interstate scheme, and held that commissioners’ prior investigative views did not alone establish disqualifying prejudgment.


FTC v. Cement Inst., 333 U.S. 683 (1948)