The Trump administration is backing the FTC’s investigation into two prominent proxy advisory firms to determine whether they violated US antitrust laws by influencing shareholders’ votes on political issues. The agency, empowered by Section 5 of the FTC Act, has broad authority to challenge a wide range of unfair practices that may harm competition. Although the business community has raised concerns about Section 5 for its expansive scope, it remains one of the FTC’s most powerful enforcement tools.
McCarter & English partner and former DOJ Antitrust Division attorney Robin Crauthers spoke with Bloomberg Law about the FTC’s probe and said, “There’s enough smoke here. What we haven’t seen is the fire yet.” She noted that the aim of the investigation may simply be to draw attention to these firms and pressure them to adjust their practices.