FTC v. Indiana Fed’n of Dentists

Respondent organization of dentists in Indiana promulgated a policy requiring its members to withhold x-rays from dental insurers in connection with evaluating patients’ claims for benefits. The Federal Trade Commission (FTC) issued a cease-and-desist order, ruling that the policy constituted an unfair method of competition in violation of § 5 of the Federal Trade Commission Act, since it amounted to a conspiratorial restraint of trade in violation of § 1 of the Sherman Act. The Court of Appeals vacated the FTC’s order on the ground that it was not supported by substantial evidence, holding that the FTC’s findings that respondent’s x-ray policy was anticompetitive were erroneous; that the findings were inadequate because of the FTC’s failure to define the market in which respondent allegedly restrained competition and to establish that respondent had the power to restrain competition in that market; and that the FTC erred in not determining whether the alleged restraint on competition among dentists had actually resulted in higher dental costs to patients and insurers.