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
