Federal Trade Commission
1
Federal Trade Commission
Federal Trade Commission
Official seal
Agency overview
Formed
September 26, 1914
Preceding Agency Bureau of Corporations
Jurisdiction
Federal government of the United States
Headquarters
Washington, D.C.
Employees
1,190 (March 2011)
Agency executive
Jon Leibowitz, Chairman
[1]
Website
www.ftc.gov
[2]
Footnotes
[3][4]
The Federal Trade Commission (FTC) is an independent agency of the United States government, established in
1914 by the Federal Trade Commission Act. Its principal mission is the promotion of consumer protection and the
elimination and prevention of anti-competitive business practices, such as coercive monopoly.
The Federal Trade Commission Act was one of President Woodrow Wilson's major acts against trusts. Trusts and
trust-busting were significant political concerns during the Progressive Era. Since its inception, the FTC has enforced
the provisions of the Clayton Act, a key antitrust statute, as well as the provisions of the FTC Act, 15 U.S.C. § 41 [5]
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).
Federal Trade Commission
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Organization
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. 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:
Apex Building, built in 1938 (FTC headquarters) in
Washington, D.C.
• Jon Leibowitz - Chairman
• J. Thomas Rosch
• Edith Ramirez
• Julie Brill
• Maureen Ohlhausen
Recent former commissioners were:
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William Kovacic (January 4, 2006 - October 3, 2011)
Pamela Jones Harbour (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)
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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)
Federal Trade Commission
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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 (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 and 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.
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.
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 laws, review of proposed mergers, 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, 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. However, while the FTC is
responsible for civil enforcement of antitrust laws, the Antitrust Division of the Department of Justice 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
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Federal Trade Commission
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Competition law
Basic concepts
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History of competition law
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Monopoly
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Coercive monopoly
Natural monopoly
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Barriers to entry
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Herfindahl–Hirschman Index
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Market concentration
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Market power
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SSNIP test
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Relevant market
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Merger control
Anti-competitive practices
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Monopolization
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Collusion
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Formation of cartels
Price fixing
Bid rigging
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Product bundling and tying
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Refusal to deal
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Group boycott
Essential facilities
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Exclusive dealing
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Dividing territories
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Conscious parallelism
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Predatory pricing
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Misuse of patents and copyrights
Enforcement authorities and organizations
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International Competition Network
List of competition regulators
The FTC puts 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[6]
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[7]
and Rambus),[8] there has been a move towards FTC commissioners being appointed as ALJ (Commissioner Rosch
Federal Trade Commission
in Inova Health).[9]
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[10] in July 1995 which cracked down on 100 business opportunity scams.
In 1984,[11] 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.[12] 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."[11]
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).
The FTC has been involved in the oversight of the online advertising industry and its practice of behavioral targeting
for some time. In 2011 the FTC proposed a "Do Not Track" mechanism to allow Internet users to opt-out of
behavioral targeting.
Unfair or deceptive practices affecting consumers
Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45 [13] 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.”[14] 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.[15]
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.”[16] 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.[16] 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.[16]
In its 2000 Dot Com Disclosures guide,[17] 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.”[17] The
FTC suggested a number of different factors that would help determine whether the information was “clear and
5
Federal Trade Commission
conspicuous” including:
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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.[17]
However, the “key is the overall net impression.[17]
In F.T.C. v. Cyberspace.com[18] 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.[18]
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.[19] 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.[20]
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.[21]
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.[15]
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.[22]
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Federal Trade Commission
References
[1]
[2]
[3]
[4]
[5]
[6]
[7]
"FedScope" (http:/ / www. fedscope. opm. gov/ employment. asp). Fedscope.opm.gov. . Retrieved 2012-08-14.
http:/ / www. ftc. gov
(http:/ / www. bestplacestowork. org/ BPTW/ rankings/ agency. php?code=FT00& q=scores_small)
"Federal Trade Commission: A History" (http:/ / www. ftc. gov/ ftc/ history/ ftchistory. shtm). Ftc.gov. 2012-01-18. . Retrieved 2012-08-14.
http:/ / www. law. cornell. edu/ uscode/ 15/ 41. html
Summary of FTC decisions since 1996 (http:/ / docs. google. com/ View?docid=dc5fjfws_9gv88kp)
"Docket No. 9297: In the Matter of Schering-Plough Corporation" (http:/ / www. ftc. gov/ os/ adjpro/ d9297/ index. shtm). Ftc.gov.
2011-08-26. . Retrieved 2012-08-14.
[8] "Docket No. 9302: In the Matter of Rambus Incorporated" (http:/ / www. ftc. gov/ os/ adjpro/ d9302/ index. shtm). Ftc.gov. 2009-05-14. .
Retrieved 2012-08-14.
[9] "Docket No. 9326: In the Matter of Inova Health System Foundation" (http:/ / www. ftc. gov/ os/ adjpro/ d9326/ index. shtm). Ftc.gov.
2009-06-09. . Retrieved 2012-08-14.
[10] "Business Opportunity Scam "Epidemic"" (http:/ / www. ftc. gov/ bcp/ franchise/ tsweep01. htm). Ftc.gov. 1995-07-18. . Retrieved
2012-08-14.
[11] FTC Announces Results of Compliance Testing of Over 300 Funeral Homes in the Second Year of the Funeral Rule Offenders Program
(http:/ / www. ftc. gov/ opa/ 1998/ 02/ frop-97. shtm), Federal Trade Commission, February 25, 1998
[12] "Federal Trade Commission Funeral Rule - 16 CFR Part 453" (http:/ / www. ftc. gov/ bcp/ rulemaking/ funeral/ ). Ftc.gov. 2008-10-24. .
Retrieved 2012-08-14.
[13] http:/ / www. law. cornell. edu/ uscode/ 15/ 45. html
[14] 15 U.S.C. § 45(a)(1) (http:/ / www. law. cornell. edu/ uscode/ 15/ 45(a)(1). html)
[15] "FTC Policy Statement on Unfairness, Dec. 17, 1980" (http:/ / www. ftc. gov/ bcp/ policystmt/ ad-unfair. htm). Ftc.gov. . Retrieved
2012-08-14.
[16] "FTC Policy Statement on Deception, Oct. 14, 1983" (http:/ / www. ftc. gov/ bcp/ policystmt/ ad-decept. htm). Ftc.gov. . Retrieved
2012-08-14.
[17] "FTC, Dot Com Disclosures: Information about Online Advertising, May 2000" (http:/ / www. ftc. gov/ bcp/ edu/ pubs/ business/
ecommerce/ bus41. pdf) (PDF). . Retrieved 2012-08-14.
[18] "453 F.3d 1196 (9th Cir. 2006)" (http:/ / openjurist. org/ 453/ f3d/ 1196/ federal-trade-commission-v-cyberspacecom-llc). Openjurist.org. .
Retrieved 2012-08-14.
[19] "Complaint" (http:/ / www. ftc. gov/ os/ caselist/ 0423047/ 040707cmp0423047. pdf) (PDF). . Retrieved 2012-08-14.
[20] "Gateway Decision and Order, Sept. 2004" (http:/ / www. ftc. gov/ os/ caselist/ 0423047/ 040917do0423047. pdf) (PDF). . Retrieved
2012-08-14.
[21] "Sears Complaint" (http:/ / www. ftc. gov/ os/ caselist/ 0823099/ 090604searscomplaint. pdf) (PDF). . Retrieved 2012-08-14.
[22] Congressional Press Release on Rising Gas & Energy Prices (http:/ / speaker. gov/ issues?id=0031#bigoil)
Further reading
• 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 (http://links.jstor.org/
sici?sici=0161-391X(196212)49:3<437:TTOTFT>2.0.CO;2-O) in JSTOR)
External links
• Official website (http://www.ftc.gov)
• Consumer Complaint Assistant, Federal Trade Commission (https://www.ftccomplaintassistant.gov)
• Federal Trade Commission Decisions (July 1949 - December 2005) (http://www.ftc.gov/os/decisions/index.
htm) 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 (http://thefederalregister.com/b.p/department/
FEDERAL_TRADE_COMMISSION/) from The Federal Register RSS Feed (http://thefederalregister.com/rss/
department/FEDERAL_TRADE_COMMISSION/)
• Federal Trade Commission Identity Theft Complaint Form (http://www.ftc.gov/bcp/edu/microsites/idtheft/
consumers/filing-a-report.html)
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Article Sources and Contributors
Article Sources and Contributors
Federal Trade Commission Source: http://en.wikipedia.org/w/index.php?oldid=521087076 Contributors: 100110100, A E Francis, AdamDeanHall, Alan Liefting, Aleph42, Allen3, Anaxial,
Antandrus, Apparition11, Arthena, AvnajBevTa, BD2412, Bebestbe, Bewildebeast, Bob Burkhardt, Bonadea, Bongwarrior, Brastein, Briaboru, Brighterorange, Brismile, Brokerblogger,
CanadianLinuxUser, CapitalR, Ccddill, Chessphoon, Chiefwaterfall, CliffC, Clindberg, Closedmouth, CopperSquare, Corpx, Courcelles, Crownjewel82, Cryptonymius, Cybercobra, DB, Darrylo,
Devourer09, Dipics, Discospinster, DocWatson42, DozenAttempts, Dr Gangrene, Dthomsen8, Eastlaw, Eddiebeans, Edward, Eep², Eiler7, Epbr123, Epolk, Erik Lönnrot, Esmito, FTC OPA,
Fatla00, Freakmighty, Freedomwarrior, Freeheeling, Freewol, Galoubet, Ground Zero, HaggyMac, IRP, Imperator3733, Jamesisreallycool, Jarvishunt, Jdebusch, Jerzy, Jonathan.s.kt,
Jordansparks, JustAGal, Kiand, Kitambi, Kubigula, Kungfuadam, Lectonar, Lighted Match, Linuxmatt, Lotje, Lowellian, MacGyverMagic, Magister Mathematicae, Malepheasant, Malikashiqui,
MattTM, Mav, Minimac's Clone, Mion, Mr Stephen, NGC 2736, Neovu79, NetKnight, Neutrality, Non Curat Lex, Noren, Nsaa, Nukeless, Ohnoitsjamie, Oliver202, Olivier, PJtP, Palosirkka,
PaulHanson, Peterpkaplan, Pilotguy, PokeOnic, Polynova, Pop Secret, Postdlf, Quuxplusone, RJaguar3, RM SEO, Raffaele16, Raven4x4x, Rcannon100, Richard L. Peterson, Riffic, Rjensen,
Rodrigue, Rsi73, Rupper, Sander123, Sannse, SaraThustra, Sardanaphalus, Scheherazade510, SchreiberBike, Scientizzle, Scriberius, Seth Goldin, Shell Kinney, Shortride, SirAndrew1, Skittleys,
Some jerk on the Internet, Stpuidhead, Supreme Deliciousness, Swliv, The Anome, The Nut, Therequiembellishere, Thewinchester, Tim Q. Wells, Tim1965, Titoxd, Ulric1313, VQuakr,
Woohookitty, 312 anonymous edits
Image Sources, Licenses and Contributors
file:US-FederalTradeCommission-Seal.svg Source: http://en.wikipedia.org/w/index.php?title=File:US-FederalTradeCommission-Seal.svg License: Public Domain Contributors: U.S.
Government
File:ApexBuildingHighsmith.jpg Source: http://en.wikipedia.org/w/index.php?title=File:ApexBuildingHighsmith.jpg License: Public Domain Contributors: Carol M. Highsmith (born 1946)
Image:Scale of justice 2.svg Source: http://en.wikipedia.org/w/index.php?title=File:Scale_of_justice_2.svg License: Public Domain Contributors: DTR
License
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