In the 1937 case Federal Trade Commission v. Standard Education Society et al., the U.S. Supreme Court ruled in favor of the Federal Trade Commission (FTC), affirming its authority to prevent deceptive practices in commerce under Section 5 of the FTC Act. The defendant, Standard Education Society, was accused by FTC for using misleading advertising and sales tactics to sell their home-study courses and books. They falsely claimed that purchasers could easily secure profitable employment after completing these courses or even obtain a high school diploma equivalent through them, which was not true as they were not accredited nor recognized educationally anywhere. The court held that such misrepresentations constituted unfair competition because they deceived consumers and distorted market conditions, thereby violating federal trade law.

In the dissenting opinion for the Federal Trade Commission v. Standard Education Society case, it was argued that the majority's decision to uphold FTC's cease and desist order against Standard Education Society (SES) overstepped its boundaries. The dissenting justices believed that SES did not engage in unfair or deceptive practices as defined by Section 5 of the Federal Trade Commission Act. They contended that SES merely employed persuasive sales techniques common in business transactions, which should not be considered illegal unless they involve fraud or misrepresentation. Furthermore, they expressed concern about FTC’s broad interpretation of "unfair methods of competition," warning it could lead to arbitrary enforcement and potentially stifle legitimate business activities. Thus, they disagreed with penalizing SES based on subjective judgments about their sales tactics rather than clear violations of law.