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Federal Trade Commission
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{{short description|Government agency}}{{Use mdy dates|date=May 2018}}







factoids
|budget =|chief1_name = Joseph Simons|chief1_position = Chairman|chief2_name =|chief2_position =|child1_agency =www.ftc.gov}} {{webarchive >url=https://web.archive.org/web/20070820193820weblink PUBLISHER=FTC.GOV ACCESSDATE=AUGUST 14, 2012, |date=November 2018}}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 anticompetitive business practices, such as coercive monopoly. It is headquartered in the Federal Trade Commission Building in Washington, D.C. 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, {{UnitedStatesCode|15|41}} et seq. Over time, the FTC has been delegated with the enforcement of additional business regulation statutes and has promulgated a number of regulations (codified in Title 16 of the Code of Federal Regulations).

Legislative development

File:ApexBuildingHighsmith.jpg|thumb|right|218px|Apex Building, built in 1938 (FTC headquarters) in Washington, D.C.Washington, D.C.(File:Federal Trade Commission Entrance Doorway.jpg|thumb|Federal Trade Commission entrance doorway in Washington, DC)Following the Supreme Court decisions against Standard Oil and American Tobacco in May 1911, the first version of a bill to establish a commission to regulate interstate trade was introduced on January 25, 1912, by Oklahoma congressman Dick Thompson Morgan. He would make the first speech on the House floor advocating its creation on February 21, 1912. Though the initial bill did not pass, the questions of trusts and antitrust dominated the 1912 election.A Brief History of the Federal Trade Commission, Federal Trade Commission, 90th Anniversary Symposium. Most political party platforms in 1912 endorsed the establishment of a federal trade commission with its regulatory powers placed in the hands of an administrative board, as an alternative to functions previously and necessarily exercised so slowly through the courts.Republican Party Platform of 1912, June 18, 1912; Democratic Party Platform of 1912, June 25, 1912; USCB.eduPlatform of the Progressive Party, August 7, 1912; PBS.orgWith the 1912 presidential election decided in favor of the Democrats and Woodrow Wilson, Morgan reintroduced a slightly amended version of his bill during the April 1913 special session. The national debate culminated in Wilson's signing of the FTC Act on September 26, with additional tightening of regulations in the Clayton Antitrust Act three weeks later. The new Federal Trade Commission would absorb the staff and duties of Bureau of Corporations, previously established under the Department of Commerce and Labor in 1903. The FTC could additionally challenge "unfair methods of competition" and enforce the Clayton Act's more specific prohibitions against certain price discrimination, vertical arrangements, interlocking directorates, and stock acquisitions.

Current membership

The following table lists commissioners as of May 2018.{| class="wikitable sortable"! Member! Political party! Sworn in! Term expiration| Joseph Simons(Chairman)Republican Party (United States)>Republican| May 1, 2018| September 26, 2024| Rohit ChopraDemocratic Party (United States)>Democratic| May 2, 2018| September 22, 2019| Noah Joshua PhillipsRepublican Party (United States)>Republican| May 2, 2018| September 26, 2023| Rebecca Kelly SlaughterDemocratic Party (United States)>Democratic| May 2, 2018| September 26, 2022| Christine WilsonRepublican Party (United States)>Republican| September 26, 2018| September 25, 2025

List of former commissioners

Recent former commissioners were:WEB,weblink Commissioners and Chairmen of the Federal Trade Commission, Federal Trade Commission, yes,weblink" title="web.archive.org/web/20130512031437weblink">weblink May 12, 2013, mdy-all, {| class=wikitable! Commissioner! Years| John J. Carson| 1949 – 1953| Stephen J. Spingarn| 1950 – 1953| Caspar Weinberger| December 31, 1969 – August 6, 1970| Philip Elman| April 21, 1961 – October 18, 1970| Miles W. Kirkpatrick| September 14, 1970 – February 20, 1973| Everette MacIntyre| September 26, 1961 – August 30, 1973| Mary Gardner Jones| October 29, 1964 – November 2, 1973| David J. Dennison, Jr.| October 18, 1970 – December 31, 1973| Mayo J. Thompson| July 8, 1973 – September 26, 1975| Lewis A. Engman| February 20, 1973 – December 31, 1975| Calvin J. Collier| March 24, 1976 – December 31, 1977| Stephen A. Nye| May 5, 1974 – May 5, 1978| Elizabeth Hanford Dole| December 4, 1973 – March 9, 1979| Paul Rand Dixon| March 21, 1961 – September 25, 1981| David Clanton| August 26, 1975 – October 14, 1983| Michael Pertschuk| April 21, 1977 – October 15, 1984| George W. Douglas| December 27, 1982 – September 18, 1985| James C. Miller III| September 25, 1982 – October 5, 1985| Patricia P. Bailey| October 29, 1979 – May 15, 1988| Margo E. Machol| November 29, 1988 – October 24, 1989 [recess appointment]| Daniel Oliver| April 21, 1986 – August 10, 1989| Terry Calvani| November 18, 1983 – September 25, 1990| Andrew Strenio| March 17, 1986 – July 15, 1991| Deborah K. Owen| October 25, 1989 – August 26, 1994| Dennis A. Yao| July 16, 1991 – August 31, 1994| Christine A. Varney| October 17, 1994 – August 5, 1997| Janet D. Steiger| August 11, 1989 – September 28, 1997| Roscoe B. Starek, III| November 19, 1990 – December 18, 1997| Mary L. Azcuenaga| November 27, 1984 – June 3, 1998| Robert Pitofsky| June 29, 1978 – April 30, 1981 & April 11, 1995 – May 31, 2001| Sheila F. Anthony| September 30, 1997 – August 1, 2003| Timothy Muris| June 4, 2001 – August 15, 2004| Mozelle W. Thompson| December 17, 1997 – August 31, 2004| Orson Swindle| December 18, 1997 – June 30, 2005| Thomas B. Leary| November 17, 1999 – December 31, 2005| Deborah Platt Majoras| August 16, 2004 – March 29, 2008| Pamela Jones Harbour| August 4, 2003 – April 6, 2010| William Kovacic| January 4, 2006 – October 3, 2011| J. Thomas Rosch| January 5, 2006 - Sept 2012| Jon Leibowitz| March 2, 2009 – March 7, 2013|Joshua D. Wright|January 11, 2013 – August 24, 2015|Julie Brill|April 6, 2010 – March 31, 2016|Edith Ramirez| April 5, 2010 – February 10, 2017|Terrell McSweeny| April 28, 2014 – April 27, 2018{{unreferenced section|date=September 2014}}

Bureaus

(File:Scam Watch 1280x720.ogv|thumb|thumbtime=59|upright=1.1|How to File a Complaint with the Federal Trade Commission, from the FTC)

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

{{Competition law}}The FTC investigates 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.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 TelesweepWEB,weblink Business Opportunity Scam "Epidemic", Ftc.gov, July 18, 1995, August 14, 2012, in July 1995 which cracked down on 100 business opportunity scams.In 1984,FTC Announces Results of Compliance Testing of Over 300 Funeral Homes in the Second Year of the Funeral Rule Offenders Program {{webarchive|url=https://web.archive.org/web/20070629013621weblink |date=June 29, 2007 }}, Federal Trade Commission, February 25, 1998 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.WEB,weblink Federal Trade Commission Funeral Rule - 16 CFR Part 453, Ftc.gov, October 24, 2008, August 14, 2012, 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."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.In 2013, the FTC issued a comprehensive revision of its Green guides, which set forth standards for environmental marketing.WEB,weblink FTC Issues Revised "Green Guides", October 1, 2012, October 24, 2013,

Unfair or deceptive practices affecting consumers

(File:EndorsementGuides 0.webm|thumb|thumbtime=2:28|upright=1.1|Endorsement Guides from the FTC)Section 5 of the Federal Trade Commission Act, {{UnitedStatesCode|15|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."{{UnitedStatesCode|15|45(a)(1)}} 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.WEB,weblink FTC Policy Statement on Unfairness, Dec. 17, 1980, Ftc.gov, August 14, 2012,

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."WEB,weblink FTC Policy Statement on Deception, Oct. 14, 1983, Ftc.gov, August 14, 2012, 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. 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.

Dot Com Disclosures guide

In its Dot Com Disclosures guide,WEB,weblink .com Disclosures: How to Make Effective Disclosures in Digital Advertising, March 2013, FTC, PDF, January 19, 2016, 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." The FTC suggested a number of different factors that would help determine whether the information was "clear and conspicuous" including but not limited to:
  • 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.
However, the "key is the overall net impression."

Cyberspace.com case

In F.T.C. v. Cyberspace.comWEB,weblink 453 F.3d 1196 (9th Cir. 2006), Openjurist.org, August 14, 2012, 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.

Gateway Learning case

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.WEB,weblink Complaint, PDF, August 14, 2012, 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.WEB,weblink Gateway Decision and Order, Sept. 2004, PDF, August 14, 2012,

Sears Holdings case

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.WEB,weblink Sears Complaint, PDF, August 14, 2012,

Loot Boxes in Computer and Video Games as Gambling

In November 2018 by request of US Senator Maggie Hassan, the FTC decided to investigate whether paid-for loot boxes, virtual items with random benefits in certain computer and video games, were a form of gambling.WEB,weblink The FTC will investigate whether a multi-billion dollar business model is getting kids hooked on gambling through video games, Webb, Kevin, Business Insider, 2019-02-13, WEB,weblink FTC Will Investigate Loot Boxes, US Senator Claims "Close Link" To Gambling, 2018-11-28, Gaming News, Reviews, and Articles - TechRaptor.net, en-US, 2019-02-13, WEB,weblink The FTC Finally Agreed to Investigate Loot Boxes, 2018-11-28, Tom's Hardware, en, 2019-02-13, WEB,weblink Video game 'loot boxes' net big money — and some say create child gamblers, NBC News, en, 2019-02-13,

Money Now Funding / Cash4Businesses case

In September 2013, a federal court closed an elusive business opportunity scheme on the request of the FTC, namely "Money Now Funding" / "Cash4Businesses".WEB,weblink FTC Halts Elusive Business Opportunity Scheme, 2013-09-26, Federal Trade Commission, en, 2019-02-08, The FTC alleged that the defendants misrepresented potential earnings, violated the National Do Not Call Register, and violated the FTC's Business Opportunity Rule in preventing a fair consumer evaluation of the business.WEB,weblink Case 2:13-cv-01583-ROS Document 95 Filed 09/13/13, FTC, This was one of the first definitive actions taken by any regulator against a company engaging in transaction laundering, where almost USD 6 million were processed illicitly.WEB,weblink What is transaction laundering and what is the Industry doing about it?, 2018-03-15, Payments Cards & Mobile, en, 2019-02-08, WEB,weblink FTC Targets Transaction Laundering In Landmark Lawsuit, 2017-09-13, EverCompliant, en-US, 2019-02-08, In December 2018, two defendants, Nikolas Mihilli and Dynasty Merchants, LLC, settled with the FTC. WEB,weblink Two Defendants Settle Allegations in ‘Money Now Funding’ Credit Card Charge Laundering Scheme, 2018-12-10, Federal Trade Commission, en, 2019-02-08, They were banned from processing credit card transactions but a monetary judgment of $5.8 million was suspended due to the defendants’ inability to pay.

OMICS Publishing Group case

In 2016, the FTC launched action against the OMICS Publishing Group — "OMICS Group Inc., a Nevada corporation, also doing business as OMICS Publishing Group, iMEDPub LLC, a Delaware corporation, Conference Series LLC, a Delaware corporation, and Srinubabu Gedela"WEB, OMICS Group Inc.,weblink Federal Trade Commission, 15 January 2019, 1 May 2018, — for producing predatory journalsNEWS, FTC sues OMICS group: Are predatory publishers' days numbered?,weblink STAT News, September 2, 2016, October 22, 2016, and organising predatory conferences. This action, partly in response to on-going pressure from the academic community,NEWS, Federal Trade Commission begins to crack down on 'predatory' publishers,weblink August 29, 2016, Carl, Straumsheim, October 22, 2016, Inside Higher Ed, is the first action taken by the FTC against an academic journal publisher. The complaint alleges that the defendants have been "deceiving academics and researchers about the nature of its publications and hiding publication fees ranging from hundreds to thousands of dollars"WEB, Shonka, David C., Rusu, Ioana, Ashe, Gregory A., Bogden, Daniel G., Daniel Bogden, Welsh, Blaine T., Case No. 2:16-cv-02022 – Complaint for Permanent Injunction and Other Equitable Relief, August 25, 2016, October 22, 2016,weblink Case 2:16-cv-02022, Federal Trade Commission, and notes that "OMICS regularly advertises conferences featuring academic experts who were never scheduled to appear in order to attract registrants" and that attendees "spend hundreds or thousands of dollars on registration fees and travel costs to attend these scientific conferences." Manuscripts are also sometimes held hostage, with OMICS refusing to allow submissions to be withdrawn and thereby preventing resubmission to another journal for consideration.WEB, U.S. government agency sues publisher, charging it with deceiving researchers,weblink August 26, 2016, November 2, 2016, Retraction Watch, Alison, McCook, Jeffrey Beall has described OMICS as the worst-of-the-worst amongst the predatory publishers.WEB,weblink Federal Trade Commission Targeting Predatory Publishers, Jonathan, Bailey, September 12, 2016, November 2, 2016, iThenticate – Plagiarism Blog, In November 2017, a federal court in the District of Nevada granted a preliminary injunction that "prohibits the defendants from making misrepresentations regarding their academic journals and conferences, including that specific persons are editors of their journals or have agreed to participate in their conferences. It also prohibits the defendants from falsely representing that their journals engage in peer review, that their journals are included in any academic journal indexing service, or any measurement of the extent to which their journals are cited. It also requires that the defendants clearly and conspicuously disclose all costs associated with submitting or publishing articles in their journals."WEB, FTC Halts the Deceptive Practices of Academic Journal Publishers,weblink Federal Trade Commission, 15 January 2019, 22 November 2017,

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.

FTC activities in the healthcare industry

In addition to prospective analysis of the effects of mergers and acquisitions, the FTC has recently resorted to retrospective analysis and monitoring of consolidated hospitals.WEB,weblink PDF, DHG Healthcare, What hospital executives should be considering in mergers and acquisitions, November 16, 2014, Thus, it also uses retroactive data to demonstrate that some hospital mergers and acquisitions are hurting consumers, particularly in terms of higher prices. Here are some recent examples of the FTC's success in blocking or unwinding of hospital consolidations or affiliations:
  1. Phoebe Putney Memorial Hospital and Palmyra Medical Center in Georgia. In 2011, the FTC successfully challenged in court the $195 million acquisition of Palmyra Medical Center by Phoebe Putney Memorial Hospital.WEB,weblink Federal Trade Commission, In the Matter of Phoebe Putney Health System, Inc., Phoebe Putney Memorial Hospital, Inc., Phoebe North, Inc., HCA Inc., Palmyra Park Hospital, Inc., and Hospital Authority of Albany-Dougherty County, November 16, 2014, The FTC alleged that the transaction would create a monopoly as it would "reduce competition significantly and allow the combined Phoebe/Palmyra to raise prices for general acute-care hospital services charged to commercial health plans, substantially harming patients and local employers and employees". The Supreme Court on February 19, 2013 ruled in favor of the FTC.
  2. ProMedica health system and St. Luke's hospital in Ohio. Similarly, court attempts by ProMedica health system in Ohio to overturn an order by the FTC to the company to unwind its 2010 acquisition of St. Luke's hospital were unsuccessful.WEB,weblink Federal Trade Commission, Administrative Law Judge Upholds FTC's Complaint Against Ohio Hospital Deal, Orders ProMedica to Divest St. Luke's Hospital, November 16, 2014, The FTC claimed that the acquisition would hurt consumers through higher premiums because insurance companies would be required to pay more. In December 2011, an administrative judge upheld the FTC's decision noting that the behavior of ProMedica health system and St. Luke's was indeed anticompetitive and ordered ProMedica to divest St. Luke's to a buyer that would be approved by the FTC within 180 days of the date of the order.
  3. OSF healthcare system and Rockford Health System in Illinois. In November 2011, the FTC filed a lawsuit alleging that the proposed acquisition of Rockford by OSF would drive up prices for general acute-care inpatient services as OSF would face only one competitor (SwedishAmerican health system) in the Rockford area and would have a market share of 64%.WEB,weblink OSF Healthcare System Abandons Plans to Buy Rockford in Light of FTC Lawsuit; FTC Dismisses its Complaint Seeking to Block the Transaction, Federal Trade Commission, November 16, 2014, Later in 2012, OSF announced that it had abandoned its plans to acquire Rockford Health System.

See also

{{col div}} {{col div end}}

References

{{Reflist|30em}}
  • JOURNAL, Marc, Winerman, The Origins of the FTC: Concentration, Cooperation, Control, and Competition, Antitrust Law Journal, 71, 1, 2003, 1–98, harv,

Further reading

  • JOURNAL, Davis, G. Cullom, 1962, The Transformation of the Federal Trade Commission, 1914–1929, The Mississippi Valley Historical Review, 49, 3, 437–455, 1902564,
  • JOURNAL, MacIntyre, A. Everette, Volhard, Joachim J., 1970, The Federal Trade Commission,weblink Boston College Law Review, 11, 4, 723–783,
  • JOURNAL, MacLean, Elizabeth Kimball, July 2007, Joseph E. Davies: The Wisconsin Idea and the Origins of the Federal Trade Commission, Journal of the Gilded Age and Progressive Era, 6, 3, 248–284, 10.1017/S1537781400002097,

External links

{{EB1922 Poster}}{{Commons category|Federal Trade Commission}} {{Authority control}}

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