Business, Legal & Accounting Glossary
FTC. Federal agency whose purpose is to encourage free enterprise and prevent restraint of trade and monopolies. Many mergers and acquisitions will go through the Federal Trade Commission if there is a concern that the merged company would be too much of a monopolistic force. The agency also protects consumers against deceptive practices such as false advertising or identity theft. The Federal Trade Commission was created in 1914 by the Federal Trade Commission Act.
A federal government agency established to regulate business practices and enforce antitrust laws.
The FTC often shows up in the news when big businesses merge, but it also plays a role in protecting consumers from unfair business practices, including actions by collection agencies and credit bureaus.
While the FTC generally does not have authority to intervene in individual consumer disputes, the FTC can take action against a company about which it has received numerous consumer complaints.
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 what regulators perceive to be “anti-competitive” business practices.
The Federal Trade Commission Act was one of President 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 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).
The Federal Trade Commission is headed by five Commissioners who are nominated by the President and confirmed by the 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 at most 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 named).
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 as well as 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.
The Bureau of Competition is the division of the FTC charged with elimination and prevention of “anti-competitive” 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.
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.
The FTC carries out (parties) 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. 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 in July 1995 which cracked down on 100 business opportunity scams.
In 1984, the FTC began to regulate the funeral service 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. 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 other large 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 Federal Trade Commission had regulated the industry and provided the groundwork for success by promoting positive business practices for all.
You should try to make sure that you know all of the rules set forth by the Federal Trade Commission and not break them.
At the request of the Federal Trade Commission, a U.S. district court has prohibited a New York-based company from calling elderly consumers and tricking them into paying for medical products they did not order.
Federal Trade Commission Act Of 1914
commission
divestment
Fair Debt Collection Practices Act
advertising substantiation
triggering term
FTC. Federal agency whose purpose is to encourage free enterprise and prevent restraint of trade and monopolies. Many mergers and acquisitions will go through the Federal Trade Commission if there is a concern that the merged company would be too much of a monopolistic force. The agency also protects consumers against deceptive practices such as false advertising or identity theft. The Federal Trade Commission was created in 1914 by the Federal Trade Commission Act.
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This glossary post was last updated: 22nd November, 2021 | 0 Views.