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Guide to the Federal Trade
Commission
The Federal Trade Commission
(FTC) works to ensure that the nation’s
markets are vigorous, efficient and free
of restrictions that harm consumers. Experience
demonstrates that competition among firms
yields products at the lowest prices, spurs
innovation and strengthens the economy.
Markets also work best when consumers can
make informed choices based on accurate
information.
To ensure the smooth operation
of our free market system, the FTC enforces
federal consumer protection laws that prevent
fraud, deception and unfair business practices.
The Commission also enforces federal antitrust
laws that prohibit anticompetitive mergers
and other business practices that restrict
competition and harm consumers. Whether
combating telemarketing fraud, Internet
scams or price-fixing schemes, the FTC’s
primary mission is to protect consumers.
In addition, the Commission
conducts economic research and analysis
to support its law enforcement efforts and
to contribute to the policy deliberations
oft the Congress, the Executive Branch,
other independent agencies, and state and
local governments.
This booklet explains
how the Commission works to achieve these
goals. I also invite you to visit our website,
www.ftc.gov, to learn more about the FTC.
Timothy J. Muris, Chairman
TABLE
OF CONTENTS
INTRODUCTION
As a consumer or businessperson,
you may be more familiar with the work of
the Federal Trade Commission than you think.
Consumers who refer to
care labels in their clothes, product warranties
or stickers showing the energy costs of
home appliances are using information required
by the FTC. Businesses must be familiar
with the laws requiring truthful advertising
or prohibiting price fixing. These laws
also are administered by the FTC.
The FTC deals with issues
that touch the economic lives of most Americans.
In fact, the agency has a long tradition
of maintaining a competitive marketplace
for both consumers and businesses. When
the FTC was created in 1914, its purpose
was to prevent unfair methods of competition
in commerce as part of the battle to “bust
the trusts.” Over the years, Congress
passed additional laws giving the agency
greater authority to police anticompetitive
practices.
In 1938, Congress passed
the Wheeler-Lea Amendment, which included
a broad prohibition against “unfair
and deceptive acts or practices.”
Since then, the Commission also has been
directed to administer a wide variety of
other consumer protection laws, including
the Telemarketing Sales Rule, the Pay-Per-Call
Rule and the Equal Credit Opportunity Act.
In 1975, Congress passed
the Magnuson-Moss Act, which gave the FTC
the authority to adopt trade regulation
rules that define unfair or deceptive acts
in particular industries. Trade regulation
rules have the force of law. As you read
through this booklet, you will learn about
other laws that enable the FTC to help consumers.
The FTC’s work is
performed by the Bureaus of Consumer Protection,
Competition and Economics. That work is
aided by the Office of General Counsel and
seven regional offices.
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COMMISSIONERS
The FTC is an independent
agency that reports to Congress on its actions.
The Commission is headed by five Commissioners,
nominated by the President and confirmed
by the Senate, each serving a seven-year
term. The President chooses one Commissioner
to act as Chairman. No more than three Commissioners
can be of the same political party. The
current Chairman and Commissioners are:
Chairman Timothy J.
Muris
A Republican, he began
his term as Chairman on June 4, 2001. Muris
has held three previous positions at the
Commission: Assistant to the Director of
the Office of Policy Planning and Evaluation
(1974 to1976), Director of the Bureau of
Consumer Protection (1981 to 1983) and Director
of the Bureau of Competition (1983 to 1985).
After leaving the FTC
in 1985, Muris served with the Executive
Office of the President, Office of Management
and Budget for three years, and afterward,
as Of Counsel with the law firm of Collier,
Shannon, Rill and Scott (1992 to 2000) and
Howrey, Simon, Arnold and White (2000 to
2001). Muris joined George Mason University
School of Law as a Foundation Professor
in 1988 and was interim dean of the law
school from 1996 to 1997.
A member of the American
Bar Association’s Antitrust Section,
Muris has written widely on antitrust, consumer
protection, regulatory, and budget issues.
In 1981, he served as the Deputy Counsel
to the Presidential Task Force on Regulatory
Relief.
Commissioner Mozelle
W. Thompson
A Democrat, he was sworn
in as a Commissioner on December 17, 1997.
Thompson most recently held the position
of Principal Deputy Assistant Secretary
at the Department of the Treasury overseeing
domestic spending and credit policies. Prior
to joining the Treasury, he served as Senior
Vice President and General Counsel to the
New York State Finance Agency. He also was
an attorney with the firm of Skadden, Arps,
Slate, Meagher and Flom in New York. Thompson
has been president of the International
Marketing Supervision Network (IMSN), an
international consumer protection enforcement
association, and also Vice Chairman of the
OECD Consumer Policy Committee. Thompson
has taught at the Fordham Law School and
Princeton University’s Woodrow Wilson
School.
Commissioner Orson
Swindle
A Republican, he was sworn
in as a Commissioner on December 18, 1997.
He has had a distinguished military career
and served in the Reagan Administration
from 1981 to 1989 directing financial assistance
programs to economically distressed rural
and municipal areas of the country. As Assistant
Secretary of Commerce for Development, he
managed the Department of Commerce’s
national economic development efforts, directing
seven offices across the country. He was
State Director of the Farmers' Home Administration
for the U.S. Department of Agriculture financing
rural housing, community infrastructure,
businesses, and farming.
Commissioner Thomas
B. Leary
A Republican, he was sworn
in on November 17,1999. From 1983 to 1999,
he had been a partner at Hogan and Hartson,
where he practiced principally in the areas
of antitrust and trade regulation. Before
becoming a partner at Hogan and Hartson,
he was the Assistant General Counsel of
General Motors, with overall responsibility
for antitrust, consumer protection and commercial
law matters. He also served as an Air Intelligence
Officer on active duty in the United States
Navy from 1952 to 1955.
Commissioner Pamela
Jones Harbour
An Independent, she was
sworn in as a Commissioner on August 4,
2003. She joined the FTC from Kaye Scholer,
where, as a partner in the litigation department,
she counseled clients on Internet privacy,
e-commerce, consumer protection, and a variety
of competition-related matters. Before joining
Kaye Scholer, she was New York State Deputy
Attorney General and Chief of the Office’s
150-attorney Public Advocacy Division. During
her 11-year term in the Attorney General’s
office, she handled a number of notable
antitrust cases, including State Oil v.
Khan, a landmark price-fixing case, and
States v. Primestar Partners, a consent
judgment that culminated a four-year multi-state
investigation of the cable TV industry.
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BUREAU
OF CONSUMER PROTECTION
Bureau of Consumer Protection’s
mandate is to protect consumers against
unfair, deceptive or fraudulent practices.
The Bureau enforces a variety of consumer
protection laws enacted by Congress, as
well as trade regulation rules issued by
the Commission. Its actions include individual
company and industry-wide investigations,
administrative and federal court litigation,
rulemaking proceedings, and consumer and
business education. In addition, the Bureau
contributes to the Commission’s on-going
efforts to inform Congress and other government
entities of the impact that proposed actions
could have on consumers.
The Bureau of Consumer
Protection is divided into six divisions
and programs, each with its own areas of
expertise.
The Division of Advertising
Practices
The Division of Advertising
Practices is the nation’s enforcer
of federal truth-in-advertising laws. Its
law enforcement activities focus on:
- Claims for foods, drugs, dietary supplements,
and other products promising health benefits.
- Health fraud on the Internet.
- Weight-loss advertising
- Advertising and marketing directed to
children.
- Performance claims for computers, ISPs
and other high-tech products and services.
- Tobacco and alcohol advertising, including
monitoring for unfair practices or deceptive
claims and reporting to Congress on cigarette
and smokeless tobacco labeling, advertising
and promotion.
- Protecting children’s privacy
online.
- Claims about product performance made
in national or regional newspapers and
magazines; in radio and TV commercials,
including infomercials; through direct
mail to consumers; or on the Internet.
The Division of Enforcement
The Division of Enforcement
conducts a wide variety of law enforcement
activities to protect consumers, including:
(1) ensuring compliance with administrative
and federal court orders entered in consumer
protection cases; (2) conducting investigations
and prosecuting civil actions to stop fraudulent,
unfair or deceptive marketing and advertising
practices; and (3) enforcing consumer protection
laws, rules and guidelines.
- Monitoring compliance with Commission
cease and desist orders and federal court
injunctive orders involves:
- Investigating compliance of parties
subject to agency and federal court
orders.
- Initiating federal court actions
for substantial civil penalties for
violation of agency orders.
- Enforcing federal court injunctive
orders through civil and criminal
contempt actions (Project Scofflaw).
- Investigations of violations of consumer
protection laws and litigation before
the Commission’s administrative
law judges or the U.S. District Courts
involve:
- E-Commerce and the Internet, including
online shopping and unfulfilled holiday
delivery promises.
- Employment opportunities fraud,
such as false promises about the availability
of jobs with the U.S. Postal Service,
federal government or modeling agencies.
- Scholarship scams, targeting services
that falsely guarantee scholarships
or claim to have information that
is unavailable elsewhere.
- Office supply fraud, including “toner-phoner”
scams where small businesses are billed
for unordered copier and printer toner.
- Enforcement of trade laws, rules and
guides through administrative or federal
court proceedings includes:
- The Mail or Telephone Order Merchandise
Rule, which requires “brick
and mortar” and online companies
to ship purchases when promised (or
within 30 days if no time is specified)
or to give consumers the option to
cancel their order for a refund.
- Textile, Wool, Fur and Care Labeling
Rules, which require proper origin
and fiber content labeling of textile,
wool and fur products, and care label
instructions attached to clothing
and fabrics.
- Energy Rules, which require the
disclosure of energy costs of home
appliances (the Appliance Labeling
Rule), octane ratings of gasoline
(the Fuel Rating Rule), and the efficiency
rating of home insulation (the R-Value
Rule).
- Green Guides, which govern claims
that consumer products are environmentally
safe, recycled, recyclable, ozone-friendly,
or biodegradable.
The Division of Financial
Practices
The Division of Financial
Practices is responsible for developing
policy and enforcing laws related to financial
and lending practices affecting consumers.
It also is responsible for most of the agency’s
consumer privacy program. Among its specific
areas of responsibility are:
- Financial privacy, including enforcement
of the Fair Credit Reporting Act (FCRA)
and the Gramm-Leach-Bliley Act (GLBA).
- The FCRA ensures the accuracy and
privacy of information kept by credit
bureaus and other consumer reporting
agencies, and gives consumers the
right to know what information these
entities are distributing about them
to creditors, insurance companies
and employers.
- The GLBA requires financial institutions
to provide notice to consumers about
their information practices, and to
give consumers an opportunity to direct
that their personal information not
be shared with non-affiliated third
parties.
- Subprime lending, including enforcement
of laws targeting deceptive, unfair and
abusive practices in the subprime market,
such as the Federal Trade Commission Act,
the Home Ownership and Equity Protection
Act, and the Equal Credit Opportunity
Act.
- Enforcement of many of the nation’s
other consumer credit statutes, including:
- The Truth in Lending Act, which
requires creditors to disclose in
writing certain cost information,
such as the annual percentage rate
(APR), before consumers enter into
credit transactions.
- The Consumer Leasing Act, which
requires lessors to give consumers
information on lease costs and terms.
- The Fair Debt Collection Practices
Act, which prohibits debt collectors
from engaging in unfair, deceptive
or abusive practices, including over-charging,
harassment and disclosing consumers’
debt to third parties.
The Division of Marketing
Practices
The Division of Marketing
Practices responds quickly and decisively
to the rapidly changing world of fraudulent
marketing practices. It enforces federal
consumer protection laws by filing actions
in federal district court on behalf of the
Commission to stop scams, prevent scam artists
from repeating their fraudulent schemes
in the future, freeze assets, and obtain
compensation for scam victims. The Division
also files administrative cases with the
Commission to stop these scams.
The Division’s enforcement
priorities include:
- Shutting down high-tech Internet and
telephone scams that bilk consumers out
of hundreds of millions of dollars annually;
- Halting deceptive telemarketing or
direct mail marketing schemes that use
false and misleading information to take
consumers’ money; and
- Stopping pyramid schemes and other
fraudulent investment scams.
The Division also is responsible
for the issuance, revision and enforcement
of many of the Commission’s rules,
including:
- The Telemarketing Sales Rule, which
prohibits deceptive sales pitches and
protects consumers from abusive, unwanted,
and late-night sales calls.
- The 900 Number Rule, which requires
sellers of pay-per-call (“900 number”)
services to clearly disclose the price
of their services, prohibits the targeting
of most of those services to children,
and forbids unfair billing practices.
- The Franchise and Business Opportunity
Rule, which requires sellers of franchises
and business opportunities to give prospective
buyers a disclosure containing specific
information about the business and any
earnings claims that are made, to help
them evaluate the value of the franchise.
- The Funeral Rule, which requires funeral
directors to disclose price and other
information about their services to consumers.
- The Magnuson-Moss Act, which requires
merchants to make warranty information
available to consumers before they make
a purchase.
The Division is on the
cutting edge of investigating and addressing
the ever-evolving use of the Internet and
other emerging technologies to defraud consumers.
The Division has taken the lead in developing
new strategies and techniques to combat
the latest high-tech scams and in sharing
those strategies and techniques with federal,
state, local, and international law enforcement
agencies through its training programs.
Its initiatives in this area include:
- Developing and presenting Internet Investigation
Training to federal, state, local, and
international law enforcement agencies.
- Sponsoring and conducting symposia
on legal issues arising from cutting-edge
technologies.
- Prosecuting civil enforcement actions
to keep fraud artists from operating on
the Internet and in other high-tech areas.
The Division of Planning
and Information
The Division of Planning
and Information helps consumers get the
information they need to protect themselves,
and gives FTC attorneys and other consumer
protection law enforcers the information
and support they need to take action. The
Division pursues this mission in several
ways:
- Consumer Response Center, which houses
counselors who respond to consumer complaints
and requests for information (1-877-FTC-HELP
[1-877-382-4357] or
www.ftc.gov).
- Identity Theft Data Clearinghouse,
which houses counselors who tell consumers
how to protect themselves from identity
theft and what to do if their identity
has been stolen (1-877-IDTHEFT1 3[1-877-438-4338];
TDD: 1-866-653-4261; or www.consumer.gov/idtheft).
- Consumer Sentinel. The FTC enters Internet,
telemarketing, identity theft, and other
fraud-related complaints into Consumer
Sentinel, a secure, online database and
cyber tool available to hundreds of civil
and criminal law enforcement agencies
in the U.S. and abroad (www.consumer.gov/sentinel).
- Operations. The Division also administers
the core financial, administrative and
litigation support activities of the Bureau,
and manages the agency’s consumer
redress program.
The Consumer and Business
Education Program
The Consumer and Business
Education Program plans, develops and implements
creative, practical, plain-language mission-related
campaigns aimed at both broad and segmented
consumer and industry audiences. These efforts
encourage informed consumer choice and competitive
business practices in the marketplace, and
are viewed by the Commission as a cost-effective
way to help minimize consumer injury and
obtain compliance with the law. To leverage
expertise and limited resources, the program
businesses, trade associations, consumer
groups and other government agencies when
appropriate, exhibits at national conferences
and conventions, and produces public service
announcements for radio, print and web.
A consumer and/or business education component
is included in each major consumer protection
law enforcement initiative.
In addition to producing
award-winning publications and websites,
the program maintains www.consumer.gov.
The Program launched this “one stop”
site for federal consumer information with
four partner agencies (Food and Drug Administration,
Consumer Product Safety Commission, National
Highway Traffic Safety Administration and
the Securities and Exchange Commission)
in December1997. Today, the site links to
consumer information, arranged in 10 broad
topic areas, from more than 170 federal
agencies. It also has become the consumer
information portal for FirstGov.gov,
a public-private partnership, led by a cross-agency
board and administered by the Office of
FirstGov in the General Services Administration’s
Office of Government-wide Policy.
The International Division
of Consumer Protection
The International Division of Consumer Protection
seeks to promote consumer confidence in
the international marketplace through cross-border
cooperation and information-sharing. It
does this by:
- Negotiating and implementing bilateral
consumer protection cooperation agreements.
- Representing the FTC in the International
Consumer Protection and Enforcement Network,
an organization of consumer protection
law enforcers in more than two dozen countries.
- Coordinating and managing econsumer.gov,
a website where consumers can file cross-border
e-commerce complaints. The information
is then entered into a secure database
that law enforcement agencies in many
countries use to identify and investigate
fraud.
- Providing litigation support for enforcement
actions with an international component.
- Assisting developing countries in building
consumer protection frameworks.
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BUREAU
OF COMPETITION
The FTC’s antitrust
arm, the Bureau of Competition seeks to
prevent anticompetitive mergers and other
anticompetitive business practices in the
marketplace. By protecting competition,
the Bureau promotes consumers’ freedom
to choose goods and services in an open
marketplace at a price and quality that
fit their needs – and fosters opportunity
for businesses by ensuring a level playing
field among competitors.
The Bureau fulfills this
role by reviewing proposed mergers and other
business practices for possible anticompetive
effects, and, when appropriate, recommending
that the Commission take formal law enforcement
action to protect consumers. The Bureau
also serves as a research and policy resource
on competition topics and provides guidance
to business on complying with the antitrust
laws.
The FTC is careful to
attend to segments of the economy that will
have the greatest impact on behalf of consumers,
such as:
- Energy for homes, manufacturing or transportation–
electricity, oil and gas;
- Prescription drugs and health care;
- Food – consumer products and grocery
retailing; and
- High-tech industries such as computers,
broadband Internet access, and cable TV
distribution and programming.
The Antitrust Laws
The Bureau protects competition
through enforcement of the antitrust laws.
These laws include:
- Section 5 of the Federal Trade Commission
Act, which prohibits “unfair methods
of competition.”
- Section 1 of the Sherman Act, which
outlaws “every contract, combination...,
or conspiracy, in restraint of trade.”
- Section 2 of the Sherman Act, which
makes it unlawful for a company to “monopolize,
or attempt to monopolize,” trade
or commerce.
- Section 7 of the Clayton Act, which
prohibits mergers and acquisitions the
effect of which “may be substantially
to lessen competition, or to tend to create
a monopoly.”
- Section 7A of the Clayton Act (added
in 1976 by the Hart-Scott-Rodino Antitrust
Improvements Act), which requires companies
to notify antitrust agencies before certain
planned mergers.
- Other provisions of the Clayton Act,
including the Robinson-Patman Act, which
prohibits certain forms of price discrimination
that are found to be anticompetitive;
Section 3 of the Clayton Act, which proscribes
certain types of tying and exclusive dealing
arrangements; and Section 8 of the Clayton
Act, which proscribes interlocking directorates
and officers.
Merger Enforcement
Most mergers actually
benefit competition and consumers by allowing
firms to operate more efficiently. In a
competitive market, firms pass on these
lower costs to consumers. But some mergers,
by reducing competition, can cost consumers
many millions of dollars every year in the
form of higher prices and reduced product
quality, consumer choice and innovation.
The Bureau of Competition
reviews mergers to determine which ones
have the potential to harm consumers; thoroughly
investigates those that may be troublesome;
and recommends enforcement action to the
Commission when necessary to protect competition
and consumers. While the FTC challenges
only a small percentage of mergers, its
merger enforcement actions typically save
consumers hundreds of millions of dollars
each year.
The Commission’s
merger enforcement activity focuses primarily
on mergers between direct competitors (“horizontal”
mergers), because these maybe most likely
to harm consumers. The Commission also examines
mergers involving firms at different levels
of the same industry (“vertical”
mergers) and those involving firms that
exert a procompetitive influence because
of the possibility of their entering a market
(“potential competition” mergers).
- In a horizontal merger, a direct
competitor maybe eliminated, allowing
the acquiring firm latitude to raise prices
without losing sales.
- A vertical merger, such as
a manufacturer acquiring a supplier of
component products, or a manufacturer
merging with a distributor of its products,
is less likely to be anticompetitive,
because the parties do not compete with
each other. A vertical merger may harm
competition, however, by making it difficult
for competitors to gain access to an important
component product or to an important channel
of distribution, such as cable TV networks
for providers of television programming.
Various remedies may be
suitable for transactions that pose antitrust
concerns. These include settlement, litigation
or abandonment of the transaction by the
parties:
- It often is possible to correct the
antitrust problems raised by a merger
through the divestiture of assets used
in the affected markets. Divestiture is
the most common but not the only remedy
employed. Mergers of large companies usually
involve many different markets, and a
divestiture of a part of the company to
another firm may protect competition while
allowing the beneficial aspects of the
merger to go forward.
- In some cases, however, a divestiture
remedy is insufficient, or the parties
cannot agree on the scope of needed divestitures.
Then, the Commission may seek to prevent
the entire transaction by asking a federal
court to block the merger from proceeding.
Nonmerger Enforcement
The Bureau receives numerous
inquiries and complaints from customers
and competitors throughout the country about
possible antitrust law violations that do
not involve mergers. The staff carefully
evaluates each inquiry or complaint, and
where appropriate, opens a formal investigation.
In addition, the Bureau’s staff monitors
industry activities through trade publications,
industrial reports and company press releases.
The Commission’s
nonmerger enforcement efforts focus on business
activities that significantly threaten competition
and harm consumers. These involve direct
competitors (“horizontal” arrangements),
suppliers and customers (“vertical”
arrangements), or single firms.
The Bureau focuses significant
attention on horizontal restraints, or agreements
between or among direct competitors, because
these pose the greatest risk of harm to
competition. Under the antitrust laws, companies
may not agree to limit competition in ways
that hurt consumers.
Horizontal restraints
may take many different forms:
- An explicit agreement among competitors
on price– price fixing – is
illegal per se. Competitors must
establish prices and terms independently.
- The legality of many other types of
agreements is not as clear-cut. These
cases often are complex and require a
detailed and painstaking examination of
the facts to determine whether the agreement
violates antitrust laws. For example,
an agreement among manufacturers to adopt
specifications requiring fire-resistant
materials for certain products may have
a beneficial effect on public safety that
far outweighs any impact on competition.
- A group boycott –
an agreement among competitors not
to deal with another person or business–
may hurt consumers by preventing the
establishment of a new competitor.
For example, the FTC has challenged
boycotts by groups of physicians to
prevent the establishment of competing
health care facilities.
- Agreements among competitors to
divide sales territories or allocate
customers are generally illegal because
they are essentially agreements not
to compete. For example, an agreement
between cable TV companies not to
enter each other’s territory
would prevent the head-to-head competition
that helps consumers.
- Restrictions on advertising can
be illegal if they deprive consumers
of important information. For example,
if a group of auto dealers agrees
to restrict comparative and discount
advertising, consumers would have
less information to comparison shop.
- A professional code of ethics may
be unlawful if it unreasonably restricts
the ways professionals may compete.
For example, a code of ethics provision
that restricts a group of professionals
from engaging in alternative forms
of delivery of services could deny
consumers the benefits (including
lower costs) of these methods.
Restrictions agreed to
by firms at different levels within an industry,
known as vertical restraints, also can be
harmful to consumers, although these restraints
tend to be more beneficial than not.
- The sale of one product on condition
that a customer purchase a second product,
which the customer may not want or can
buy elsewhere at a lower price, is a “tie-in.”
Requirements like these are illegal if
they harm competition.
- Manufacturers and dealers often enter
into agreements related to resale price
or on matters not related to price, such
as limitations on dealers’ territories
or customer service obligations. Restrictions
such as these generally are not illegal.
Practices of single firms
may violate the antitrust laws’ prohibition
on monopolization or attempted monopolization.
Although it is not illegal to have a monopoly,
a single company cannot monopolize or try
to monopolize an industry through unfair
practices –tactics that either unreasonably
exclude firms from the market or significantly
impair their ability to compete. For example,
it would likely be illegal for a company
with a monopoly in one market to attempt
to use its power in that market to interfere
with competition in another market.
Research and Policy
Studies
Congress created the FTC
as a source of expertise and information
on the economy. Consistent with this role,
the Bureau regularly analyzes important
competition-related topics:
- It organizes public workshops to examine
emerging issues, such as the advent of
software systems that allow multiple buyers
and sellers to carry out sales and procurement
activities over the Internet, known as
business-to-business (B2B) electronic
marketplaces.
- It reports to Congress and the public
on topics of significant public interest,
such as pricing of gasoline and other
refined petroleum products.
- It contributes to FTC analysis of the
competitive implications of important
policy proposals, such as those relating
to the deregulation of electricity.
- Bureau managers often testify before
Congress on subjects of current public
interest.
The Bureau also works
to inform the business community about antitrust
enforcement policies to facilitate compliance
with the law.
- Often in conjunction with the Department
of Justice, the Bureau develops enforcement
guidelines on such topics as mergers or
collaborations among competitors. These
guidelines help companies and their legal
advisors understand how the agencies analyze
possible violations.
- Bureau managers regularly give speeches
on current enforcement policies and priorities
before legal and business groups.
- The Bureau prepares advisory opinions
to help businesses evaluate the legality
of proposed ventures or course of action.
- Information on the Bureau’s activities
and policies is widely available to the
public through the dissemination of frequent
press releases and publication of materials
on the FTC website.
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BUREAU
OF ECONOMICS
The Bureau of Economics
helps the FTC evaluate the economic impact
of its actions. To do so, the Bureau provides
economic analysis and support to antitrust
and consumer protection investigations and
rulemakings. It also analyzes the impact
of government regulation on competition
and consumers and provides Congress, the
Executive Branch and the public with economic
analysis of market processes as they relate
to antitrust, consumer protection, and regulation.
Provides Economic Advice
for Enforcement
The Bureau provides guidance
and support to the agency’s antitrust
and consumer protection enforcement activities.
In the antitrust area, the Bureau participates
in the investigation of alleged anticompetitive
acts or practices and provides advice on
the economic merits of alternative antitrust
actions. If an enforcement action is initiated,
the Bureau integrates economic analysis
into the proceeding (sometimes providing
the expert witness at trial) and works with
the Bureau of Competition to devise appropriate
remedies.
In the consumer protection
area, the Bureau provides economic support
and analysis of potential Commission actions
in both cases and rulemakings handled by
the Bureau of Consumer Protection. Bureau
economists also provide analysis of appropriate
penalty levels to deter activity that harms
consumers.
Studies Effects of
Legislative Options and Regulations
The Bureau participates
in the FTC’s advocacy activities.
The Commission’s three bureaus present
comments, upon request, to other agencies
and entities concerning the effects of regulation
on competition and consumers. At the request
of lawmakers or agency officials, comments
or testimony often are provided to assist
legislatures’ consideration of pending
bills or to assist agency rulemaking proceedings.
Similarly, a micus curiae briefs may be
presented to federal or state courts. These
submissions advocate policies that will
enhance both competition and consumer choice.
Analyzes Market Processes
The Bureau also conducts
economic analysis of various markets and
industries. This work focuses on the economic
effects of regulation and on issues important
to antitrust and consumer protection policy.
Many of these analysis are published as
staff reports.
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HOW
THE FTC BRINGS AN ACTION
Letters from consumers
or businesses, premerger notification filings,
Congressional inquiries or articles on consumer
or economic subjects may trigger FTC action.
Generally, FTC investigations are non-public
to protect both the investigation and the
companies involved.
If the FTC believes that
a person or company has violated the law
or that a proposed merger may violate the
law, the agency may attempt to obtain voluntary
compliance by entering into a consent order
with the company. A company that signs a
consent order need not admit that it violated
the law, but it must agree to stop the disputed
practices outlined in an accompanying complaint
or undertake certain obligations to resolve
the anticompetitive aspects of its proposed
merger.
If a consent agreement
cannot be reached, the FTC may issue an
administrative complaint or seek injunctive
relief in the federal courts. The FTC’s
administrative complaints initiate a formal
proceeding that is much like a federal court
trial but before an administrative law judge:
Evidence is submitted, testimony is heard,
and witnesses are examined and cross-examined.
If a law violation is found, a cease and
desist order may be issued. Initial decisions
by administrative law judges may be appealed
to the full Commission.
Final decisions issued
by the Commission may be appealed to the
U.S. Court of Appeals and, ultimately, to
the U.S. Supreme Court. If the Commission’s
position is upheld, the FTC, in certain
circumstances, may then seek consumer redress
in court. If the company ever violates the
order, the Commission also may seek civil
penalties or an injunction.
In some circumstances,
the FTC can go directly to court to obtain
an injunction, civil penalties or consumer
redress. In the merger enforcement arena,
the FTC may seek a preliminary injunction
to block a proposed merger pending a full
examination of the proposed transaction
in an administrative proceeding. The injunction
preserves the market’s competitive
status quo. The FTC seeks federal court
injunctions in consumer protection matters
typically in cases of ongoing consumer fraud.
By going directly to court, the FTC can
stop the fraud before too many consumers
are injured.
The Commission also can
issue Trade Regulation Rules. If the FTC
staff finds evidence of unfair or deceptive
practices in an entire industry, it can
recommend that the Commission begin a rulemaking
proceeding. Throughout the rulemaking proceeding,
the public has opportunities to attend hearings
and file written comments. The Commission
considers these comments along with the
entire rulemaking record – the hearing
testimony, the staff reports, and the Presiding
Officer’s report – before making
a final decision on the proposed rule. An
FTC rule may be challenged in any of the
U.S. Courts of Appeal. When issued, these
rules have the force of law.
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FTC
OFFICES YOU SHOULD KNOW ABOUT
The FTC’s Regional
Offices cover seven geographic areas. The
regional offices work with the Bureaus of
Competition and Consumer Protection to conduct
investigations and litigation; provide advice
to state and local officials on the competitive
implications of proposed actions; recommend
cases; provide local outreach services to
consumers and businesspersons; and coordinate
activities with local, state, and regional
authorities. FTC regional offices frequently
sponsor conferences for small businesses,
local authorities, and consumer groups.
The General Counsel is
the FTC’s chief legal officer and
adviser. The Office’s major functions
are representing the Commission in court
and providing legal counsel to the Commission,
bureaus and other offices.
The Office of Congressional
Relations works closely with members of
Congress and their staffs. The Office informs
Commissioners and FTC staff of Capitol Hill
issues and policies, and helps provide information
on legislation of interest to the Commission.
It also coordinates the preparation of both
Congressional testimony and responses to
Congressional inquiries concerning FTC policies
and programs.
The Office of Public Affairs
provides information to the public through
the media. It issues news releases on all
significant Commission actions; responds
to reporters’ inquiries; and arranges
television, radio and print interviews for
FTC officials. The Office issues a weekly
calendar of Commission events and a weekly
summary of press releases.
The Secretary is the Commission’s
“court clerk,” responsible for
implementing the Commission’s voting
procedures, creating official records of
its decisions, receiving and serving Commission
orders and other official documents, and
coordinating the preparation of responses
to congressional constituent inquiries.
The Executive Director
is the FTC’s chief operating officer
and manager, responsible for such matters
as administrative services, financial management,
procurement, human resources management,
information and technology management, as
well as overall FTC program and policy execution.
The Executive Director directs the agency’s
reauthorization and appropriations efforts,
and works closely with the bureaus on strategic
planning and assessing the management and
resource implications of any proposed action.
The Office of Inspector
General acts as the “agency cop”
and as such, is responsible for the detection
and prevention of waste, fraud and abuse
in agency programs. The Inspector General
conducts audits and investigates allegations
of wrongdoing within the agency. Persons
aware of any staff misconduct are encouraged
to call the Office of Inspector General
at 202-326-2800.
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FOR
MORE INFORMATION
Contact the Public Reference
Line, 202-326-2222;TDD: 1-866-653-4261,
for FTC reports, speeches or testimony,
trade regulation rules, and other general
information, or visit
www.ftc.gov.
Reporters may call the
Office of Public Affairs at 202-326-2180
for assistance.
Contact the Library, 202-326-2395,
to use the volumes on legal, economic and
business subjects; periodicals; and interlibrary
loan service.
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