How The FTC Brings An Action

Federal Trade Commission action

Congressional inquiries or articles on consumer or economic subjects may trigger FTC action. Generally, FTC investigations are non-public to protect both the investigation and the companies involved.

If the FTC believes that a person or company has violated the law or that a proposed merger may violate the law, the agency 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 or undertake certain obligations to resolve the anti competitive aspects of its proposed merger.

If a consent agreement cannot be reached, the FTC may issue an administrative complaint or seek injunctive relief in the federal courts. The FTC’s administrative complaints initiate a formal proceeding that is much like a federal court trial but 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 may be issued. Initial decisions by administrative law judges may be appealed to the full Commission.

Federal Trade Commission decisions

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. In the merger enforcement arena, the FTC may seek a preliminary injunction to block a proposed merger pending a full examination of the proposed transaction in an administrative proceeding. The injunction preserves the market’s competitive status quo. The FTC seeks federal court injunctions in consumer protection matters typically 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 also can 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 has opportunities to attend hearings and file written comments. The Commission considers 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.

 

Federal Trade Commission

 

 

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