The
FTC may begin an investigation in different ways. Letters from
consumers or businesses, Congressional inquiries, or articles
on consumer or economic subjects may trigger FTC action.
Investigations are either public or nonpublic.
Generally, FTC investigations are nonpublic in order to protect
both the investigation and the company.
If the FTC believes a violation of the law
occurred, it 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.
If a consent agreement cannot be reached,
the FTC may issue an administrative complaint. If an
administrative complaint is issued, a formal proceeding that
is much like a court trial begins 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 or other appropriate
relief may be issued. Initial decisions by administrative
law judges may be appealed to the full Commisson.
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. This usually happens 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 can also 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 will have opportunities to attend hearings
and file written comments. The Commission will consider 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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