Federal Trade Commission (FTC)
Definition
The Federal Trade Commission (FTC) is a government agency established in 1915 under the Federal Trade Commission Act of 1914. The FTC’s primary role is to safeguard the free enterprise system and maintain effective competition to foster a robust economy. As per Section 5 of the Act, the FTC is mandated to promote free and fair competition in interstate commerce for the benefit of the public by preventing practices such as price-fixing, boycotts, combinations in restraint of trade, and unfair or deceptive acts and practices.
Examples
- Price-Fixing Prevention: The FTC investigates and takes action against companies that collude to set prices, ensuring that competition remains fair and prices remain competitive.
- Consumer Protection: The FTC enforces laws that protect consumers from fraudulent, deceptive, and unfair business practices. This includes actions against false advertising and scams.
- Merger Review: The FTC reviews proposed mergers and acquisitions to prevent monopolies and ensure that these activities do not significantly reduce competition within the market.
Frequently Asked Questions (FAQs)
What is the primary purpose of the FTC?
The primary purpose of the FTC is to promote free and fair competition in interstate commerce, which includes preventing unfair methods of competition, deceptive acts, and other practices that could harm the economy or consumers.
When was the FTC established?
The FTC was established in 1915 under the Federal Trade Commission Act of 1914.
How does the FTC protect consumers?
The FTC protects consumers by enforcing laws against deceptive, unfair, and fraudulent practices. They investigate complaints and take legal action against businesses that violate consumer protection laws.
What kind of business practices does the FTC regulate?
The FTC regulates practices including but not limited to price-fixing, deceptive advertising, data security breaches, and unfair methods of competition.
How can consumers report a complaint to the FTC?
Consumers can report complaints to the FTC through their website (www.ftc.gov). The FTC provides a means for filing online complaints regarding a range of consumer issues.
Related Terms
- Price Fixing: An agreement between business competitors to sell the same product or service at the same price.
- Monopoly: The control of a supply or trade in a commodity or service by a single company.
- Deceptive Practices: Acts or practices by businesses that mislead or deceive consumers.
- Antitrust Laws: Laws that promote fair competition for the benefit of consumers by regulating anti-competitive conduct by companies.
- Consumer Protection Laws: Regulations that protect the interests of consumers and ensure they are not exploited by businesses.
Online References
- Federal Trade Commission Official Website
- FTC Consumer Information
- United States Department of Justice - Antitrust Division
Suggested Books for Further Studies
- “The Antitrust Paradox” by Robert H. Bork: This book provides a critical view of antitrust law and discusses the purposes and impacts of policies.
- “Competition Law in the European Union” by Van Bael & Bellis: This book adopts a comparative approach to understanding antitrust laws, offering insights into another significant legal framework.
- “Free to Choose” by Milton & Rose Friedman: This book emphasizes the importance of free-market policies and touches upon the role of governmental institutions like the FTC.
Fundamentals of the Federal Trade Commission (FTC): Business Law and Consumer Protection Basics Quiz
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