Federal Trade Commission

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Federal Trade Commission

Seal of the Federal Trade Commission

Flag of the Federal Trade Commission

Agency overview

Formed

September 26, 1914

Preceding agency

Bureau of Corporations

Jurisdiction

Magistrate Adrian Ionescu

Headquarters

Washington, D.C.

Employees

1,131 (December 2011)[1]

Agency executive
Edith Ramirez, Chairman
Website

www.ftc.gov
Footnotes
[2][3]

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 protectionand the elimination and prevention of anticompetitive
business practices, such as coercive monopoly. The Federal Trade Commission Act was one
of President Woodrow Wilson's major acts against trusts. Trusts andtrust-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 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).
Contents
[hide]

1Legislative development

2Current membership
o

2.1List of former commissioners

3Bureaus

3.1Bureau of Consumer Protection

3.2Bureau of Competition

3.3Bureau of Economics

4Activities of the FTC

5Unfair or deceptive practices affecting consumers

o

5.1Deception practices

5.2Unfair practices

5.3FTC activities in the healthcare industry

6See also

7References

8Further reading

9External links

Legislative development[edit]

Apex Building, built in 1938 (FTC headquarters) in Washington, D.C.

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.[4] 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. [5]
With the election decided in favor of the Democrats and 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.[4]

Current membership[edit]
The following table lists commissioners as of January 2016.
Member

Political party

Sworn in

Term expiration

Edith Ramirez
(Chair)

Democratic

April 5, 2010

September 25, 2015

Maureen K. Ohlhausen

Republican

April 4, 2012

September 25, 2018

Terrell McSweeny

Democratic

April 28, 2014

September 25, 2017

List of former commissioners[edit]

Recent former commissioners were:[6]

Commissioner

Years

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

Bureaus[edit]

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How to File a Complaint with the Federal Trade Commission, from the FTC

Bureau of Consumer Protection[edit]

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[edit]
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[edit]
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[edit]

Competition law
Basic concepts

History of competition law

Monopoly

Coercive monopoly

Natural monopoly

Barriers to entry

HerfindahlHirschman Index

Market concentration

Market power

SSNIP test

Relevant market

Merger control

Anti-competitive practices

Monopolization

Collusion

Formation of cartels

Price fixing

Bid rigging

Product bundling and tying

Refusal to deal

Group boycott

Essential facilities
Exclusive dealing

Dividing territories

Conscious parallelism

Predatory pricing

Misuse of patents andcopyrights

Enforcement authorities and organizations

International Competition Network

List of competition regulators

This box:

view

talk

edit

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.
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 wasProject Telesweep[7] in July 1995 which cracked
down on 100 business opportunity scams.
In 1984,[8] 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.
[9]
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."[8]
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 ofbehavioral targeting.
In 2013, the FTC issued a comprehensive revision of its Green guides, which set forth
standards for environmental marketing.[10]
The FTC imposes civil penalties against companies that breach filing requirements, whether
intentionally or not. Warren Buffett's Berkshire Hathaway agreed to a $856,000 civil penalty in
August 2014 after failing to report in advance a December 2013 conversion of convertible
notes. The FTC, in a statement referred to the matter as an "inadvertent error."

Unfair or deceptive practices affecting consumers[edit]

Endorsement Guides from the FTC

Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45 grants the FTC power to
investigate and prevent deceptive trade practices. The statute declares that "unfair methods of
competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting
commerce, are hereby declared unlawful."[11] 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.[12]

Deception practices[edit]
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."[13]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.
[13]
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 onethat is one that would have changed consumer behavior.[13]

In its Dot Com Disclosures guide,[14] 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."[14] 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.[14]

However, the "key is the overall net impression."[14]

In F.T.C. v. Cyberspace.com[15] 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.[15]
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.[16] 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.[17]
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.[18]

Unfair practices[edit]
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. [12]

FTC activities in the healthcare industry[edit]

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. [19] Thus, it
also uses retroactive data to demonstrate that some hospital mergers and acquisitions are
hurting consumers, particularly in terms of higher prices.[19] 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.[19][20] 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".[20] The Supreme Court on February 19, 2013 ruled in favor
of the FTC.[20]
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. [19][21] The FTC
claimed that the acquisition would hurt consumers through higher premiums because
insurance companies would be required to pay more. [21] 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.[19][21]
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%.[22] Later in 2012, OSF announced that it had abandoned its plans
to acquire Rockford Health System.[22]