The Federal Trade Commission (FTC)

Paper Info
Page count 10
Word count 2794
Read time 13 min
Subject Economics
Type Essay
Language 🇺🇸 US

Abstract

The report offers the general idea and understanding of an administrative agency at the federal level. The Federal Trade Commission (FTC) has been used the case study. The report discusses the meaning and purpose of creating an administrative agency. The enabling Act that initiated the creation of the agency has been used to help in understanding the adjudication, enforcement and investigative duties of the agency.

Besides, report shows the historical context, which emulates the progress of the agency alongside the roles and functions that draw on the realization of its strategic aims. The report describes the organizational chart or structure by explaining the different positions held by different personnel in the FTC agency formation. The report shows FTC accomplishments and recommendations on how the agency can handle criticisms faced.

Introduction

The administrative law forms the basis of American law. It comprises of the decisions, commands, and regulations of the administrative agencies. An administrative agency is a local government, state, or centralized agency initiated to partake and implement certain roles. All the trade facets are virtually impacted by the set laws issued by different administrative agencies.

These aspects may encompass how the companies sell and produce their merchandise, the unions and workers relationships, the processes of dismissal and employment, as well as corporate financing and capital structure.

However, several decision-making agencies are found in the cabinet of any management branch of federal agencies (Brennan 78). For instance, the Drug and Food Administration falls within the unit of Human and Health Services of the United States. The agency head has the ability to appoint and fire officeholders given that the director is subjected to the presidential powers.

At the federal level, there is the Federal Communications Commission, the Securities and Exchange Commission, and Federal Trade Commission, which are autonomous regulatory agencies. The administrators of such self-governing groups can hardly be fired exclusive of the justified grounds and they get employment for a predetermined period.

This makes the authority of the President less enunciated. The administrative organizations also exist within the domestic and country lines. The formation of the State Pollution Agency as a state organization is parallel to that of the Environmental Protection Agency, which is a federal agency (Funk 20). Therefore, the rules of the federal agencies take precedence of the conflicting state regulation. The federal statutes take primacy over contradictory statutes of the state.

The focal point is thus laid on the national managerial bylaw given that there is variance in the regulations governing the domestic and national bureaus. This paper discusses the formation, accomplishments, criticisms, functions and roles of Federal Trade Commission as federal administrative agency.

The purpose of FTC

The purpose of the Federal Trade Commission revolves around its visions and missions. The FTC is determined to put a stop to the unjust, misleading, and anti-competitive practices affecting consumers in business dealing. Enhancing proper comprehension of the competition procedures by the public and improving the informed choices of customers is the aim of the FTC. Besides, the Federal Trade Commission intends to accomplish the above aims devoid of impeding the genuine activities in business dealings (Federal Trade Commission, 2013).

In its vision, the Federal Trade Commission wants the economy of the United States to be typified by dynamic competition amid customers and manufacturers. The FTC encourages effectiveness, novelty, and varied choices to the consumers and provides access to information. Apparently, the FTC is steered to accomplish and give way to the selling products of high quality at low costs (Pierce and Joshua 2011).

The enabling Act that formed FTC

The Congress is deemed to hand over the task of implementing laws to the agencies. However, this must be done particularly when the legislation entails technical issue like the pollution of water and air. As a matter fact, the Congress is incapable of overseeing the real execution of the enacted Acts. Through the enactment of enabling legislation, the Congress is capable of initiating the creation of administrative agencies.

That is, the Congress specifies the powers, purpose, composition, as well as the name of the administrative agencies. The creation of FTC came under the 1914 Act of the Federal Trade Commission that proscribed the misleading and unjust practices in most consumer trades (Udell and Phillip 81). The Federal Trade Commission Act provided for the courts judicial appraisal of the agency commands. This helped in transforming the organization or individuals who breached the Act through describing the processes that the agency ought to pursue.

The Commission of Federal Trade was created through bylaw that gave it the power to devise set of laws and policies. Thus, it is capable of recommending the new-fangled legislation, publishing the results of its investigation, and investigating the acts of infringement. The FTC was set to acquire reports from the inter-state conglomerates after conducting investigations regarding the unwanted practices in business.

The Federal Trade Commission was authorized by the Act to judicially determine particular types of disputes and embrace trial hearings involving its regulations (Cross 2007). The control specified how the Federal Trade Commission should integrate the associated functions of the judicial, executive, and legislative departments of the government. The FTC was hence created under the Federal Trade Commission Act to amalgamate adjudication, enforcement and investigation, as well as make laws in line with the administrative procedures and law (Rublee, 269).

The historical context surrounding the formation of FTC

The Federal Trade Commission was formed in the fiscal 1914 to prevent and thwart the unjust competition methods in trade. President Franklin Roosevelt laid the foundation stone for FTC. This happened in North-West of 600 Pennsylvania Boulevard. In the fiscal 1935, the triangle to house the Federal Trade Commission was built. In the year 1937, President Roosevelt dedicated the FTC building with the bid to apply the golden law in protecting companies and business enterprises in their connections with the diplomatic body (Breyer, et al, 2001).

After the completion of the Federal Trade Commission building in the fiscal 1938, the Congress outlawed deceptive and unfair business activities. The staffs and commissioners formally occupied the offices in the same year. The building serves the administrative, policy, executive, and adjudicative functions of the agency and remains the headquarters of FTC (Miller and Jentz, 2009).

The commission was entitled to administer numerous laws that protect consumers. These encompassed Equal Credit Opportunity Act, Pay-Per Cell Rule, and Telemarketing Sales Rule. The aluminum grilles casted by the General Bronze Company were placed at FTC building in the year 1938. Equally, ‘Man Controlling Trade’ a sculpture was established at the TFC, yet it was completed in 1942. The power of FTC to adopt the regulatory rules of the industry-wide trade was guaranteed by the Congress in the year 1975 (Funk, 2006).

The creation of the Bureau of Company in February 1903 resulted from the soughed legislation implemented by Theodore Roosevelt. Early September in the fiscal 2003, the FTC’s Bureau of Economics held a seminar to discuss the economy and money matter. This marked a century anniversary celebration since the advent of FTC. Until the fiscal 2010, the Federal Trade Commission has been fighting to protect the consumers from unfair, deceptive, or anticompetitive business practices (Goldman and Sigismond 2010).

The roles and functions of FTC

The roles and functions of Federal Trade Commission aims at encouraging enhanced performance, maintaining competition, and protecting the consumers. The Federal Trade Commission averts unwarranted commercial actions, sham, and swindle in order to guard the interest of the clients in souks. The agency aims at preventing various anti-competitive marketplace activities alongside anti-competitive mergers in the business arena (Miller and Cross, 2011).

Through supervision, private, and clerical merit, the Federal Trade Commission constantly progresses its production. The financially verves of all Americans are cared for by the Commission of Federal Trade. The function of the Bureau of Corporations passes through the FTC and it is aimed at getting the reports ready whenever the President or the Congress asks for them. FTC gathers information and conduct research on policy and industrial matters thus characterizing the Bureau of Economics (Pierce, 2011).

The Federal Trade Commission benefits individual businesses and consumers. The FTC incorporates a solitary federal agency having both the competitive jurisdiction and end user protection in the extensive segment of economy. The interest of clientele is highly developed by the Federal Trade Commission through allotting expertise to the intercontinental state agencies, United States, as well as state and federal legislature. Furthermore, the FTC pursues effective and vigorous enforcement of the law (Saltz 624).

Through hearings, the FTC builds up research and policy apparatus besides putting in order conferences and workshops. With technological changes around the world, the Federal Trade Commission generates simple verbal communication and realistic edifying programs to benefit the businesses and consumers in the global bazaars. All these functions and roles of the FTC are given support and performed by regional offices, Office of the General Counsel, Bureau of Economics, Bureau of Competition, and Consumer Protection Offices.

The TFC Organizational Chart

The chairperson also known as the President of the agency heads the Federal Trade Commission. The Chief of Staff flanks the FTC president. Four other commissioners currently having one vacant office follow the head office. The agency also has offices of the Congressional Relations, Public Affairs, Policy Planning, International Affairs, and Office of the Secretary. The other offices fall in the same line and include the Office of Administrative Law, Office of the Inspector General, and Office of Equal Opportunity and Employment (ISTE 2009).

The FTC agency equally has the Bureau of Economics, Bureau of Consumer Protection, Bureau of Competition, Office of the Executive Director, and Office of the General Counsel. However, at the Office of General Counsel, Office of Executive Director and the Bureau of Consumer Protection currently have acting officers (Federal Trade Commission, 2013). Finally, there are Regional Offices taken care of by the Bureau of Competition and the Bureau of Consumer Protection as elaborated in the chart below.

The TFC Organizational Chart

The FTC accomplishments

The Federal Trade Commission has thrived to be at par with its bid of advancing performance, maintaining competition, and protecting the consumers. Initially, FTC aimed at protecting customers from unwanted telemarketing practices. FTC has initiated a nationwide one-stop do-not-call registry to authorize consumers to decide whether they require telemarketing calls. Rather than regulating the collection of gel that might upshot the telemarketing sales lists, the toll free call is somewhat advantageous to the consumers.

The Federal Trade Commission has protected the consumers from the pre-obtained credit card numbers (Miller, Cross, and Jentz 2010). In fact, the TFC amended rules that prevent telemarketers from swapping the pre-acquired account information and credit card numbers to avoid the disclosure of individual and financial information of the consumers.

On the other hand, FTC has emphasized on the attacking spam that might be deceptive to the consumers. For FTC to curb the tragedy where the consumers receive unwanted spam, the agency has established a special e-mail address. The Federal Trade Commission has put on trial the information brokers who trick banks and reveal confidential or sensitive consumer information (Miller and Jentz, 2010).

In fact, this is part of the TFC’s fresh seclusion schedule for pinning down brokers masquerading as customers to commit this unfair business practice. FTC has augmented the enforcement of Fair Trade Reporting Act (FTRA). The initiative protects the consumers’ information in order to avoid the future credit reports that might disallow them from getting housing benefits, employment, and credit insurance (Comer, 1113). The Federal Trade Commission has succeeded in controlling the theft of personal identity by awarding jail term to the offenders.

From its reports, FTC has managed to enforce the Online Privacy Protection Act of children. The continued education and enforcement endeavors have enabled the impediment of assembling individually identifiable gene from kids without their parents’ permission. FTC has implemented and kept its confidentiality pledges via making certain that corporations kowtow to the guidelines on discretion.

The consumers have been safeguarded and have advantage in business owing to the implementation of the privacy notice. The agency has ensured the security of customer information by enacting the Gramm-Leach-Bliley Act. The Act requires the financial institutions to preserve and ascertain the safety programs that shelter the information they gather from consumers (Knight 133).

The FTC has accomplished its mandate by making the privacy legislation and notices cut across various states. Generally, the FTC has prevented several practices in business dealings that prove to be unfair, deceptive, and anti-competitive to the consumers.

The FTC common criticisms

The Federal Trade Commission just like any other commission has faced criticism in its undertakings. Various studies by different scholars regarding FTC stipulate that the criticism of FTC materializes to be fascinating. An alteration in the critical focus from the agency antitrust to FTC customer protection practices turned out to be discernible when ascertaining the 1960 resurgence of consumer progress (Stevens 625). The studies assert that FTC is an incompetent and inefficient agency.

As such, the agency is politicized, possessed with trivia, inadequately structured and administered, as well as rudderless. Besides, the Federal Trade Commission has faced criticism over the deliberate antitrust concord with the Google Inc.

Personal critique of FTC’s efficiency and the future success recommendations

The agency has propelled out various consumer protection measures to put its objectives in place. The Federal Trade Commission law enforcement and other associated programs prove that the agency is excellent in accomplishing its mandates. Despite the agency’s effectiveness and accomplishments, there are recommendations that may boost its future success. FTC should initiate workshop discussions that analyze the comments regarding the unwanted telemarketing practices to help the agency decide on the rule making schemes (Emery, 2012).

The agency should sue the individuals faking compliance and violating the FTC Act to help eradicate the deceptive and unwanted spam. An extended appraisal to impose those who solicit and promote information broking activities would be important. In order to manage the identification robbery, the agency should find level of compliance and establish educational programs to increase the enforcement of the children Online Privacy Protection and Fair Credit Reporting Acts (Henderson, 1916).

Lastly, it is recommended that this federal agency should implement fresh responsibilities like administrative, report writing, and law making duties to redirect resources to the law enforcement.

Conclusion

There are various administrative agencies. However, the Federal Trade Commission falls under the federal agency. This agency has strived to protect consumers from illegal trade dealings. The reality of exceptional business growth defies the classical supposition that trade effectiveness were well matched with political liberty, fair distribution, opportunity, and competition. The FTC does all the best to secure this through the adjudication of non-discriminatory antitrust.

Additionally, FTC secures the above through customer prevention to unfair, deceptive, or anticompetitive activities in business. The agency issues commands in order to make the unjust competition techniques illegal. This is anchored on the fact that the FTC’s legislative consent was generally enhanced by the defined law infringement power. Hence, the agency employs informal authority to work and educate the commercial fraternity to facilitate compliance with the law.

The FTC coalesce the informal authority with formal powers to prosecute and investigate consumer issues to accomplish its objective. Actually, while the Federal Trade Commission strives to acclimatize and tackle the fast changing global needs, these powers provide a position for success.

FTC gets it easy to nature its wide-ranging purpose to be excellent in service delivery. In general, the Federal Trade Commission has gone far in accomplishing its main purpose of preventing business activities that sound unfair, deceptive, and anticompetitive to the consumers.

Works Cited

Brennan, Malone. “Academic Impact at the Federal Trade Commission.” IEEE Security and Privacy, 10.6(2012): 78–82. Print.

Breyer, Stephen et al. Administrative Law & Regulatory Policy. London, UK: Aspen Publishers, 2001. Print.

Comer, John. “The Federal Trade Commission.” The American Political Science Review, 26.6(1932): 1112 – 1113. Print.

Cross, Frank. West’s Legal Environment of Business: Text and Cases: Ethical, Regulatory, International, and E-commerce Issues. Boston, MA: Cengage Learning, 2007. Print.

Emery, James. A Handbook of the Federal Trade Commission Act: A Review of Its Legislative History and of the Powers, Duties and Procedure of the Commission. Memphis, Tennessee: General Books Publishers, 2012. Print.

Federal Trade Commission 2013, Protecting America’s Consumers. Web.

Funk, William. Administrative Law: Examples and Explanations. London, UK: Aspen Publishers, 2006. Print.

Funk, William. Administrative Procedure and Practice: Problems and Cases. New York, NY: Thomson West, 2006. Print.

Goldman, Arnold and W. Sigismond. Business Law: Principles and Practice. Boston, MA: Cengage Learning, 2010. Print.

Henderson, George. “Federal Trade Commission Manual.” Harvard Law Review, 29.8 (1916): 890 – 891. Print.

ISTE. “Federal Trade Commission: What’s New?” Learning & Leading with Technology, 36.7 (2009): 44- 45. Print.

Knight, Frank. “The Federal Trade Commission.” The American Journal of Sociology, 39.1(1933): 133-134. Print.

Miller, Roger and G. Jentz. Business Law Today: The Essentials. Boston, MA: Cengage Learning, 2010. Print.

Miller, Roger and G. Jentz. Fundamentals of Business Law: Excerpted Cases. Boston, MA: Cengage Learning, 2009. Print.

Miller, Roger, and F. Cross. The Legal Environment Today: Business in Its Ethical, Regulatory, E-commerce, and International Setting. Boston, MA: Cengage Learning, 2011. Print.

Miller, Roger, Frank Cross, and Gaylord Jentz. Essentials of the Legal Environment. Boston, MA: Cengage Learning, 2010. Print.

Pierce Richard and Joshua Weiss. “An Empirical Study of Agency Interpretations of Agency Rules.” Administrative Law Review, 2011. Print.

Pierce, Richard. “What Do the Studies of Judicial Review of Agency Actions Mean?” Administrative Law Review, 2011. Print.

Rublee, George. “The Federal Trade Commission.” Harvard Law Review, 38.2 (1924): 269 – 271. Print.

Saltz, Rodgers. “Federal Trade Commission.” Choice, 49.6 (2012): 1111-1112. Print.

Stevens, Ware. “Federal Trade Commission.” American Economic Review, 15.3(1925): 624-625. Print.

Udell, Gerald and Phillip Fischer. “The FTC Improvement Act”. Journal of Marketing, 41.2(1977): 80-81. Print.

Endnotes

  1. The FTC has broad law enforcement responsibilities under the Federal Trade Commission Act, 15 U.S.C. § 41 et seq. With certain exceptions, the statute provides the agency with jurisdiction over nearly every sector of the economy. Certain entities, such as depository institutions and common carriers, as well as at the business of insurance, are wholly or partially exempt from FTC jurisdiction. In addition to the FTC Act, the FTC has enforcement responsibilities under more than 40 additional statutes and more than 30 rules governing specific industries and practices.
  2. Remarks of Timothy J. Muris, Protecting Consumers’ Privacy: 2002 and Beyond (2001). Web.
  3. That concern has been expressed in a number of public opinion polls. See e.g., Alan F. Westin/Harris Interactive, Privacy On and Off the Internet: What Consumers Want (2001); IBM/Harris Interactive, Multi-National Consumer Privacy Survey (1999); Lorrie Faith Cranor et al., Beyond Concern: Understanding Net Users’ Attitudes about Online Privacy, AT&T Labs-Research Technical Report TR 99.4.1 (1999).
  4. Proposed amendments to Telemarketing Sales Rule, 67 Fed. Reg. 4491 (2002). Web.
  5. FTC v. Ira Smolev, No. 01-8922 CIV ZLOCH (S.D. Fla. 2001); Techno Brands, Inc., and Charles J. Anton. Docket No. C-4041; FTC v. Techno brands, Inc., No. 3:02-CV-86 (E.D. Va. filed 2002).
  6. Cited by Ellen Goodman, Whamming the Spammers, Boston Globe. 2002. Web.
  7. FTC v. BTV Industries, No. CV-S-02-0437-LRH (PAL) (D. Nev. 2002).
  8. See Subtitle B of the Gramm-Leach-Bliley Act, 15 U.S.C. § § 6821-27. The statute provides for civil remedies to be enforced by the FTC, and for criminal penalties enforced by the Department of Justice in cases where the pretexter knowingly or intentionally violated or attempted to violate the law. Id. § § 6822-23. The statute contains certain exceptions, including for state-licensed private investigators to the extent their activities were (1) “reasonably necessary to collect child support from a person adjudged to be delinquent… by a Federal or State court,” and (2) were authorized by court order. Id. 13. FTC v. Information Search, Inc., No. AMD-01-1121 (D. Md. Mar. 15, 2002); FTC v. Guzzetta, No. CV-01-2335 (E.D.N.Y. 2002); FTC v. Garrett, No. H 01-1225 (S.D. Tex. final order pending).
  9. 18 U.S.C. § 1028. This Act makes the FTC a central clearinghouse for identity theft complaints. Under the Act, the FTC is required to log and acknowledge such complaints, provide victims with relevant information, and refer their complaints to appropriate entities (e.g., the major national consumer reporting agencies and other law enforcement agencies).
  10. FTC Children’s Online Privacy Protection Rule, 16 C.F.R. § 312 (2002).
  11. Id. At the same time, the survey shows that many sites are not fully complying with all the requirements of the Rule. For example, only about half of the sites complied with COPPA-specific notice requirements, such as informing parents of their right to review information collected from their child, to have it deleted, and to refuse to allow further collection of information.
  12. You, Your Privacy Policy and COPPA. Web.
  13. The settlement required Lilly to establish a program to protect consumers’ personal information against threats to its security and confidentiality. Importantly, it applied to both online and offline practices.
  14. FTC Privacy of Consumer Financial Information Rule, 16 C.F.R. § 313 (2002).
  15. This is a quote famously ascribed to former FTC Commissioner Mayo Thompson (D. 1973- 1975), in characterizing the utility of an FTC staff proposal to initiate a rulemaking requiring care labels for plants sold to consumers.
  16. Fair Credit Reporting Act, 15 U.S.C. § 1681; Health Insurance Portability and Accountability Act, 42 U.S.C. § 1320; Children’s Online Privacy Protection Act, 15 U.S.C. § 6501; Identity Theft Assumption and Deterrence Act, 18 U.S.C. § 1028; GLB Act, 15 U.S.C. § 6801. Moreover, since 1996, the FTC has been applying its own statute to protect privacy.

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EduRaven. (2022, April 9). The Federal Trade Commission (FTC). Retrieved from https://eduraven.com/the-federal-trade-commission-ftc/

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EduRaven. (2022, April 9). The Federal Trade Commission (FTC). https://eduraven.com/the-federal-trade-commission-ftc/

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"The Federal Trade Commission (FTC)." EduRaven, 9 Apr. 2022, eduraven.com/the-federal-trade-commission-ftc/.

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EduRaven. (2022) 'The Federal Trade Commission (FTC)'. 9 April.

References

EduRaven. 2022. "The Federal Trade Commission (FTC)." April 9, 2022. https://eduraven.com/the-federal-trade-commission-ftc/.

1. EduRaven. "The Federal Trade Commission (FTC)." April 9, 2022. https://eduraven.com/the-federal-trade-commission-ftc/.


Bibliography


EduRaven. "The Federal Trade Commission (FTC)." April 9, 2022. https://eduraven.com/the-federal-trade-commission-ftc/.

References

EduRaven. 2022. "The Federal Trade Commission (FTC)." April 9, 2022. https://eduraven.com/the-federal-trade-commission-ftc/.

1. EduRaven. "The Federal Trade Commission (FTC)." April 9, 2022. https://eduraven.com/the-federal-trade-commission-ftc/.


Bibliography


EduRaven. "The Federal Trade Commission (FTC)." April 9, 2022. https://eduraven.com/the-federal-trade-commission-ftc/.