The Federal Trade Commission (FTC) is an independent agency of the United States government Independent agencies of the United States federal government are those agencies that exist outside of the federal executive departments . However, most independent agencies are part of the executive branch, with only a few being part of the legislative or judicial branches, established in 1914 by the Federal Trade Commission Act The Federal Trade Commission Act of 1914 established the Federal Trade Commission (FTC), a bipartisan body of five members appointed by the President of the United States for seven year terms. This Commission was authorized to issue Cease and Desist orders to large corporations to curb unfair trade practices. This Act also gave more flexibility to. Its principal mission is the promotion of "consumer protection Consumer protection laws are designed to ensure fair competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional protection for the weak and those unable to take care of" and the elimination and prevention of what regulators perceive to be harmfully "anti-competitive" business practices, such as coercive monopoly In economics and business ethics, a coercive monopoly is a business concern that prohibits competitors from entering the field, with the natural result being that the firm is able to make pricing and production decisions independent of competitive forces. A coercive monopoly is not merely a sole supplier of a particular kind of good or service ,.

The Federal Trade Commission Act The Federal Trade Commission Act of 1914 established the Federal Trade Commission (FTC), a bipartisan body of five members appointed by the President of the United States for seven year terms. This Commission was authorized to issue Cease and Desist orders to large corporations to curb unfair trade practices. This Act also gave more flexibility to was one of President Wilson's Thomas Woodrow Wilson was the 28th President of the United States. A leader of the Progressive Era, he served as President of Princeton University from 1902 to 1910, and then as the Governor of New Jersey from 1911 to 1913. With Theodore Roosevelt and William Howard Taft dividing the Republican Party vote, Wilson was elected President as a major acts against trusts A special trust or business trust is a business entity formed with intent to monopolize business, to restrain trade, or to fix prices. Trusts gained economic power in the U.S. in the late 19th and early 20th centuries. Some, but not all, were organized as trusts in the legal sense. They were often created when corporate leaders convinced the. Trusts and trust-busting Trust-busting is any government activity designed to kill trusts or monopolies. Theodore Roosevelt is the U.S. president most associated with dissolving trusts. However, his successor William Howard Taft signed twice as much trust-busting legislation during his presidency were significant political concerns during the Progressive Era Keeping corruption out of politics was a main goal of the progressive era, with many Progressives trying to expose and undercut political machines and bosses. They attempted to exclude illiterates, African-Americans, and others from voting, and to reduce immigration from Southern and Eastern Europe through devices such as a literacy test. Many. Since its inception, the FTC has enforced the provisions of the Clayton Act The Clayton Antitrust Act of 1914 , was enacted in the United States to add further substance to the U.S. antitrust law regime by seeking to prevent anticompetitive practices in their incipiency. That regime started with the Sherman Antitrust Act of 1890, the first Federal law outlawing practices considered harmful to consumers (monopolies and, a key antitrust Competition law, known in the United States as antitrust law, are laws that promote or maintain market competition by regulating anti-competitive conduct statute, as well as the provisions of the FTC Act, 15 U.S.C. Notable legislation in the title includes the Federal Trade Commission Act, the Clayton Antitrust Act, the Sherman Antitrust Act, the Securities Exchange Act of 1934, the Consumer Product Safety Act, and the CAN-SPAM Act of 2003 § 41 et seq. Over time, the FTC has been delegated the enforcement of additional business regulation statutes and has promulgated a number of regulations (codified in Title 16 of the Code of Federal Regulations The Code of Federal Regulations is the codification of the general and permanent rules and regulations (sometimes called administrative law) published in the Federal Register by the executive departments and agencies of the Federal Government of the United States. The CFR is published by the Office of the Federal Register, an agency of the).

Organization of the Federal Trade Commission

FTC Chairmen and Commissioners

The Federal Trade Commission is headed by five Commissioners who are nominated by the President and confirmed by the United States Senate The United States Senate is the upper house of the bicameral United States Congress, the lower house being the House of Representatives. The composition and powers of the Senate and the House are established in Article One of the U.S. Constitution . Each U.S state is represented by two senators, regardless of population. Senators serve staggered. Under the FTC Act, no more than three Commissioners may be from the same political party. A Commissioner's term of office is seven years, and the terms are staggered so that in a given year no more than one Commissioner's term expires (although in certain years no Commissioner's term expires and in years where Commissioners choose to step down, more than one new Commissioner may be appointed).

The current commissioners are:

• Jon Leibowitz Jon Leibowitz is the Chairman of the Federal Trade Commission, an independent agency of the United States Government. He was sworn in as a commissioner on September 3, 2004, and became chairman on March 2, 2009 - Chairman
• William Kovacic William Evan Kovacic is a member of the Federal Trade Commission. Kovacic was sworn in as a Commissioner of the FTC in January 2006. Following his nomination by President George W. Bush and confirmation by the U.S. Senate, he was designated as Chairman on March 30, 2008. However, Jon Leibowitz was designated as Chairman on March 30, 2008,
• J. Thomas Rosch Jesus College, Cambridge, 1962 , Harvard College, B.A. Magna Cum Laude, 1961
• Edith Ramirez
• Julie Brill

Recent former commissioners were:

• Pamela Jones Harbour Pamela Jones Harbour is one of the five commissioners of the FTC, a department of the United States Government. She was sworn in on August 4, 2003, to a seven year term that expires in September 2009 (August 4, 2003 - April 6, 2010)
• Deborah Platt Majoras (August 16, 2004 - March 29, 2008)
• Thomas B. Leary (November 17, 1999 - December 31, 2005)
• Orson Swindle (December 18, 1997 - June 30, 2005)
• Mozelle W. Thompson (December 17, 1997 - August 31, 2004)
• Timothy Muris (June 4, 2001 - August 15, 2004)
• Sheila F. Anthony (September 30, 1997 - August 1, 2003)
• Robert Pitofsky (June 29, 1978 - April 30, 1981) & (April 11, 1995 - May 31, 2001)
• Mary L. Azcuenaga (November 27, 1984 - June 3, 1998)
• Roscoe B. Starek, III (November 19, 1990 - December 18, 1997)
• Janet D. Steiger (August 11, 1989 - September 28, 1997)
• Christine A. Varney (October 17, 1994 - August 5, 1997)
• Dennis A. Yao (July 16, 1991 - August 31, 1994)
• Deborah K. Owen (October 25, 1989 - August 26, 1994)
• Andrew Strenio (March 17, 1986 - July 15, 1991)
• Terry Calvani (November 18, 1983 - September 25, 1990)
• Daniel Oliver (April 21, 1986 - August 10, 1989)
• Margo E. Machol (November 29, 1988 - October 24, 1989) [recess appointment]
• Patricia P. Bailey (October 29, 1979 - May 15, 1988)
• James C. Miller III (September 25, 1982 - October 5, 1985)
• George W. Douglas (December 27, 1982 - September 18, 1985)
• Michael Pertschuk (April 21, 1977 - October 15, 1984)
• David Clanton (August 26, 1975 - October 14,1983)
• Paul Rand Dixon (March 21, 1961 - September 25, 1981)
• Elizabeth Hanford Dole (December 4, 1973 - March 9, 1979)
• Stephen A. Nye (May 5, 1974 - May 5, 1978)
• Calvin J. Collier (March 24, 1976 - December 31, 1977)
• Lewis A. Engman (February 20, 1973 - December 31, 1975)
• Mayo J. Thompson (July 8, 1973 - September 26, 1975)
• David J. Dennison, Jr. (October 18, 1970 - December 31, 1973)
• Mary Gardner Jones (October 29, 1964 - November 2, 1973)
• Everette MacIntyre (September 26, 1961 - August 30, 1973)
• Miles W. Kirkpatrick (September 14, 1970 - February 20, 1973)
• Philip Elman (April 21, 1961 - October 18, 1970)
• Caspar W. Weinberger Caspar Willard "Cap" Weinberger , was an American politician, vice president and general counsel of Bechtel Corporation, and Secretary of Defense under President Ronald Reagan from January 21, 1981, until November 23, 1987, making him the third longest-serving defense secretary to date, after Robert McNamara and Donald Rumsfeld. He is (December 31, 1969 - August 6, 1970)

Bureau of Consumer Protection

The Bureau of Consumer Protection’s mandate is to protect consumers against unfair or deceptive acts or practices in commerce. With the written consent of the Commission, Bureau attorneys enforce federal laws related to consumer affairs as well as rules promulgated by the FTC. Its functions include investigations, enforcement actions, and consumer and business education. Areas of principal concern for this bureau are: advertising and marketing, financial products and practices, telemarketing fraud, privacy and identity protection etc. The bureau also is responsible for the United States National Do Not Call Registry The National Do Not Call Registry is intended to give U.S. consumers an opportunity to limit the telemarketing calls they receive. To register by telephone , consumers may call 1-888-382-1222. The registry was set to begin in 2003, but a court challenge delayed its implementation until 2004. The law provides exceptions to a blanket do-not-call.

Under the FTC Act, the Commission has the authority, in most cases, to bring its actions in federal court through its own attorneys. In some consumer protection matters, the FTC appears with, or supports, the U.S. Department of Justice The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.

Bureau of Competition

The Bureau of Competition is the division of the FTC charged with elimination and prevention of "anticompetitive" business practices. It accomplishes this through the enforcement of antitrust Competition law, known in the United States as antitrust law, are laws that promote or maintain market competition by regulating anti-competitive conduct laws, review of proposed mergers The phrase mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity, and investigation into other non-merger business practices that may impair competition. Such non-merger practices include horizontal restraints, involving agreements between direct competitors, and vertical restraints Vertical restraints are agreements between firms or individuals at different levels of the production and distribution process. Vertical restraints are to be distinguished from so-called “horizontal restraints,” which are agreements between horizontal competitors. Vertical restraints can take numerous forms, ranging from a requirement that, involving agreements among businesses at different levels in the same industry (such as suppliers and commercial buyers).

The FTC shares enforcement of antitrust laws with the Department of Justice The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries. However, while the FTC is responsible for civil enforcement of antitrust laws, the Antitrust Division of the Department of Justice The United States Department of Justice Antitrust Division is responsible for enforcing the antitrust laws of the United States. It shares jurisdiction over civil antitrust cases with the Federal Trade Commission and often works jointly with the FTC to provide regulatory guidance to businesses. However, the Antitrust Division also has the power to has the power to bring both civil and criminal action in antitrust matters.

Bureau of Economics

The Bureau of Economics was established to support the Bureau of Competition and Consumer Protection by providing expert knowledge related to the economic impacts of the FTC's legislation and operation.

Activities of the FTC

The FTC carries out its mission by investigating issues raised by reports from consumers and businesses, pre-merger notification filings, congressional inquiries, or reports in the media. These issues include, for instance, false advertising and other forms of fraud. FTC investigations may pertain to a single company or an entire industry. If the results of the investigation reveal unlawful conduct, the FTC may seek voluntary compliance by the offending business through a consent order, file an administrative complaint, or initiate federal litigation.

Traditionally an administrative complaint is heard in front of an independent administrative law judge(ALJ) with FTC staff acting as prosecutors. The case is reviewed de novo by the full FTC commission which then may be appealed to the U.S. Court of Appeals and finally to the Supreme Court. A summary of cases heard since 1996^[1] indicates that the commission has never upheld an administrative law judge's decision to dismiss a complaint. After adverse results in which the independent administrative law judges have ruled against the FTC (Schering Plough^[2] and Rambus),^[3] there has been a move towards FTC commissioners being appointed as ALJ (Commissioner Rosch in Inova Health).^[4]

Under the FTC Act, the federal courts retain their traditional authority to issue equitable relief, including the appointment of receivers, monitors, the imposition of asset freezes to guard against the spoliation of funds, immediate access to business premises to preserve evidence, and other relief including financial disclosures and expedited discovery. In numerous cases, the FTC employs this authority to combat serious consumer deception or fraud. Additionally, the FTC has rulemaking power to address concerns regarding industry-wide practices. Rules promulgated under this authority are known as Trade Rules.

In the mid-1990s, the FTC launched the fraud sweeps concept where the agency and its federal, state, and local partners filed simultaneous legal actions against multiple telemarketing fraud targets. The first sweeps operation was Project Telesweep^[5] in July 1995 which cracked down on 100 business opportunity scams.

In 1984,^[6] the FTC began to regulate the funeral home industry in order to protect consumers from deceptive practices. The FTC Funeral Rule requires funeral homes to provide all customers (and potential customers) with a General Price List ("GPL"), specifically outlining goods and services in the funeral industry, as defined by the FTC, and a listing of their prices.^[7] By law, the GPL must be presented to all individuals that ask, no one is to be denied a written, retainable copy of the GPL. In 1996, the FTC instituted the Funeral Rule Offenders Program (FROP), under which "funeral homes make a voluntary payment to the U.S. Treasury or appropriate state fund for an amount less than what would likely be sought if the Commission authorized filing a lawsuit for civil penalties. In addition, the funeral homes participate in the NFDA compliance program, which includes a review of the price lists, on-site training of the staff, and follow-up testing and certification on compliance with the Funeral Rule."^[6]

One of the Federal Trade Commission's other major focuses is identity theft. The FTC serves as a federal repository for individual consumer complaints regarding identity theft. Even though the FTC does not resolve individual complaints, it does use the aggregated information to determine where federal action might be taken. The complaint form is available online or by phone (1-877-ID-THEFT).

Unfair or Deceptive Practices Affecting Consumers

Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45 grants the FTC power to investigate and prevent deceptive trade practices. The statute declares that “unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.”^[8] Unfairness and deception towards consumers represent two distinct areas of FTC enforcement and authority. The FTC also has authority over unfair methods of competition between businesses.^[9]

Deception Practices

In a letter to the Chairman of the House Committee on Energy and Commerce, the FTC defined the elements of deception cases. First, “there must be a representation, omission or practice that is likely to mislead the consumer.”^[10] In the case of omissions, the Commission considers the implied representations understood by the consumer. A misleading omission occurs when information is not disclosed to correct reasonable consumer expectations.^[10] Second, the Commission examines the practice from the perspective of a reasonable consumer being targeted by the practice. Finally the representation or omission must be a material one—that is one that would have changed consumer behavior.^[10]

In its 2000 Dot Com Disclosures guide,^[11] the FTC said that “[d]isclosures that are required to prevent deception or to provide consumers material information about a transaction must be presented clearly and conspicuously.”^[11] The FTC suggested a number of different factors that would help determine whether the information was “clear and conspicuous” including:

• the placement of the disclosure in an advertisement and its proximity to the claim it is qualifying,
• the prominence of the disclosure,
• whether items in other parts of the advertisement distract attention from the disclosure,
• whether the advertisement is so lengthy that the disclosure needs to be repeated,
• whether disclosures in audio messages are presented in an adequate volume and cadence and visual disclosures appear for a sufficient duration, and
• whether the language of the disclosure is understandable to the intended audience.^[11]

However, the “key is the overall net impression.^[11]

In F.T.C. v. Cyberspace.com^[12] the FTC found that sending consumers’ mail that appeared to be a check for $3.50 to the consumer attached to an invoice was deceptive when cashing the check constituted an agreement to pay a monthly fee for internet access. The back of the check, in fine print, disclosed the existence of this agreement to the consumer. The FTC concluded that the practice was misleading to reasonable consumers, especially since there was evidence that less than one percent of the 225,000 individuals and businesses billed for the internet service actually logged on.^[12]

In In re Gateway Learning Corp. the FTC alleged that Gateway committed unfair and deceptive trade practices by making retroactive changes to its privacy policy without informing customers and by violating its own privacy policy by selling customer information when it had said it would not.^[13] Gateway settled the complaint by entering into a consent decree with the FTC that required it to surrender some profits and placed restrictions upon Gateway for the following 20 years.^[14]

In In the Matter of Sears Holdings Management Corp., the FTC alleged that a research software program provided by Sears was deceptive because it collected information about nearly all online behavior, a fact that was only disclosed in legalese, buried within the end user license agreement.^[15]

Unfair Practices

Courts have identified three main factors that must be considered in consumer unfairness cases: (1) whether the practice injures consumers; (2) whether the practice violates established public policy; and (3) whether it is unethical or unscrupulous.^[9]

Legislation

The first version of a bill to establish a commission to regulate trade was introduced on January 25, 1912 by Oklahoma congressman Dick Thompson Morgan, once known as the "father of the Federal Trade Commission." Morgan also made the first speech on the House floor advocating its creation on February 21, 1912. Though the initial bill did not pass, the Republican party platform of June 1912 endorsed the establishment of the Federal Trade Commission. Morgan reintroduced a slightly amended version of his bill during the April 1913 special session.

On May 23, 2007, the House passed the Energy Price Gouging Prevention Act, H.R. 1252, which will provide immediate relief to consumers by giving the Federal Trade Commission the authority to investigate and punish those who artificially inflate the price of energy. It will ensure the federal government has the tools it needs to adequately respond to energy emergencies and prohibit price gouging – with a priority on refineries and big oil companies.^[16]

See also

• Academic views on the Federal Trade Commission
• Better Business Bureau Video Series
• Brandeis Award, awarded annually by the FTC to "outstanding litigators"
• Business opportunity
• Competition law
• Competition policy
• Competition regulator
• Consumer Product Safety Commission
• Consumer protection
• Consumers' Association
• Fair Debt Collection Practices Act
• FTC Fair Information Practices
• FTC Regulation of Behavioral Advertising
• In the Matter of Sears Holdings Management Corporation
• Sweepstakes

References

• G. Cullom Davis. "The Transformation of the Federal Trade Commission, 1914–1929," The Mississippi Valley Historical Review, Vol. 49, No. 3. (Dec., 1962), pp. 437–455 (archived in JSTOR)

1. ^ Summary of FTC decisions since 1996
2. ^ Docket No. 9297: In the Matter of Schering-Plough Corporation
3. ^ Docket No. 9302: In the Matter of Rambus Incorporated
4. ^ Docket No. 9326: In the Matter of Inova Health System Foundation
5. ^ Business Opportunity Scam "Epidemic"
6. ^ ^{a b} FTC Announces Results of Compliance Testing of Over 300 Funeral Homes in the Second Year of the Funeral Rule Offenders Program, Federal Trade Commission, February 25, 1998
7. ^ Federal Trade Commission Funeral Rule - 16 CFR Part 453
8. ^ 15 U.S.C. § 45(a)(1)
9. ^ ^{a b} FTC Policy Statement on Unfairness, Dec. 17, 1980
10. ^ ^{a b c} FTC Policy Statement on Deception, Oct. 14, 1983
11. ^ ^{a b c d} FTC, Dot Com Disclosures: Information about Online Advertising, May 2000
12. ^ ^{a b} 453 F.3d 1196 (9th Cir. 2006)
13. ^ Complaint
14. ^ Gateway Decision and Order, Sept. 2004
15. ^ Sears Complaint
16. ^ Congressional Press Release on Rising Gas & Energy Prices

External links

• Federal Trade Commission Home Page
• Consumer Complaint Assistant, Federal Trade Commission
• Federal Trade Commission Decisions (July 1949 - December 2005) This is a compendium of agency decisions in administrative cases brought under 16 C.F.R. parts II and III. Federal court decisions may be found elsewhere, in published federal case reports. The site's search engine can limit its results from the archive.
• Federal Trade Commission Meeting Notices and Rule Changes from The Federal Register RSS Feed
• Federal Trade Commission Identity Theft Complaint Form

Categories: Federal Trade Commission | Corporate crime | Competition regulators | Government agencies established in 1914 | Organizations based in Washington, D.C.

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