Federal Trade Commission

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Posted by r2d2 03/03/2009 @ 07:07

Tags : federal trade commission, consumer, us

News headlines
FTC Withdraws Remaining Case Vs Rambus; Shares Rally - Wall Street Journal
The Federal Trade Commission has dropped the rest of it case against Rambus Inc. (RMBS) in light of a recent agency loss before the US Supreme Court. Rambus' shares rose 10.4% to $11.90 in premarket trading. The stock often reacts strongly to legal...
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The Federal Trade Commission is close to filing lawsuits against companies believed to be behind a national wave of spam "robocalls" warning people that their car warranties are about to expire and they need to sign up for a new service plan....
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By Christopher Stern May 14 (Bloomberg) -- The combination of Fiat SpA and Chrysler LLC, two of the world's largest car companies, presents no antitrust issues and will get early clearance from the US Federal Trade Commission, an agency official said...
Group Targeting CVS Caremark 'Hopeful' After FTC Meeting - CNNMoney.com
A national group of independent pharmacists Wednesday called on the Federal Trade Commission to conduct an extensive investigation of alleged anticompetitive conduct by CVS Caremark Corp. (CVS) and to consider reopening the 2007 merger that formed the...
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But last year, both the Federal Trade Commission and New York attorney general launched separate investigations of Intel. AMD has filed a separate civil suit against Intel in Delaware that is expected to go to court next year. Neelie Kroes, head of the...
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Despite numerous decisions to the contrary in the courts, the FTC continues to vigorously prosecute generic and brand drug makers for entering into agreements settling patent infringement litigation in which the generic firm agrees to delay entry....
FTC Testifies on Efforts to Protect Consumers of Financial Services - 7thSpace Interactive (press release)
The Federal Trade Commission today told the US House Subcommittee on Commerce, Trade, and Consumer Protection of the Committee on Energy and Commerce that, in response to the current economic crisis, the FTC has substantially increased its law...
STOCKS NEWS US-Johnson Controls up on Wachovia upgrade - Reuters
O) shares jumped on Thursday after the Federal Trade Commission issued an order dismissing the remainder of its antitrust case against the memory chip designer. In the order, the FTC also indicated that it would not pursue further proceedings against...
The PM Roundup: Carlyle Settles With Cuomo, More - Wall Street Journal Blogs
FTC Drops Rambus Suit: The Federal Trade Commission dropped the rest of its antitrust case against Rambus Inc. in light of a recent agency loss before the US Supreme Court, ending the possibility of further litigation in the matter....

Federal Trade Commission

Official seal

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 harmfully "anti-competitive" business practices, such as coercive monopoly.

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 United States 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 no more than 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 appointed).

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 "anticompetitive" 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 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.

Traditionally an administrative complaint is heard in front of an independent administrative law judge(ALJ) with FTC staff acting as prosecutors. The case is reviewed de novo by the full FTC commission which then may be appealed to the U.S. Court of Appeals and finally to the Supreme Court. A summary of cases heard since 1996 indicates the FTC commission has never upheld an administrative law judges decision to dismiss a complaint. After adverse results in which the independent administrative law judges have ruled against the FTC (Schering Plough and Rambus) there has been a move towards FTC commissioners being appointed as ALJ (Commissioner Rosch in Inova Health).

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.

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).

On May 23, 2007, the House passed the Energy Price Gouging Prevention Act, H.R. 1252, which will provide immediate relief to consumers by giving the Federal Trade Commission the authority to investigate and punish those who artificially inflate the price of energy. It will ensure the federal government has the tools it needs to adequately respond to energy emergencies and prohibit price gouging – with a priority on refineries and big oil companies.

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Federal Trade Commission Act

Scale of justice 2.svg

The Federal Trade Commission Act of 1914 (15 U.S.C §§ 41-58, as amended) established the Federal Trade Commission (FTC), a bipartisan body of five members appointed by the President of the United States for seven year terms. This Commission was authorized to issue Cease and Desist orders to large corporations to curb unfair trade practices. This Act also gave more flexibility to the US congress for judicial matters.

The agency was created during the presidency of Woodrow Wilson and was part of the Progressive Era reforms.

Under this Act, the FTC is empowered, among other things, to (a) prevent unfair methods of competition, and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; (c) prescribe trade regulation rules defining with specificity acts or practices that are unfair or deceptive, and establishing requirements designed to prevent such acts or practices; (d) conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce; and (e) make reports and legislative recommendations to Congress.

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Federal Trade Commission v. Dean Foods Co.

FTC v. Dean Foods Co, 384 U.S. 597 (1966) is a 1966 decision of the U.S. Supreme Court holding that the Federal Trade Commission (FTC) may sue in federal court to obtain a preliminary injunction to maintain the status quo against the consummation of a merger that the agency persuasively contends violates the antitrust laws. More broadly, the Dean Foods' case stands for the proposition that a federal agency may, by invoking the “All Writs Act,” seek equitable relief in federal court against a person’s threatened action that will substantially interfere with the agency’s performance of its statutory duty and thus adversely affect the relevant court’s ability to review the agency’s ultimate order with respect to the threatened action.

The FTC argued that injunctive relief was needed because otherwise Dean would eliminate Bowman as a competitive entity by selling off its milk routes and its plants and equipment. This would prevent restoration of Dean as an effective competitor, in the event that the merger was found unlawful. The FTC maintained that such preemptive action by Dean would effectively deprive the court of appeals of its appellate jurisdiction to review the FTC’s final order, because any order would be meaningless as a practical matter. The Seventh Circuit dismissed the petition on the ground that the FTC lacked authority to seek such relief, since Congress had no passed any statute giving the FTC authority to seek a preliminary injunction. At that point Dean began closing Bowman down and eliminating it as a business.

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Consumer protection

Consumer protection laws often mandate the posting of notices, such as this one which appears in all automotive repair shops in California

Consumer protection is a form of government regulation which protects the interests of consumers. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue, such as food. Consumer protection is linked to the idea of consumer rights (that consumers have various rights as consumers), and to the formation of consumer organizations which help consumers make better choices in the marketplace.

Consumer interests can also be protected by promoting competition in the markets which directly and indirectly serve consumers, consistent with economic efficiency, but this topic is treated in Competition law.

Consumer protection can also be asserted via non-government organizations and individuals as consumer activism.

Consumer protection law or consumer law is considered an area of public law that regulates private law relationships between individual consumers and the businesses that sell those goods and services. Consumer protection covers a wide range of topics, including but not necessarily limited to product liability, privacy rights, unfair business practices, fraud, misrepresentation, and other consumer/business interactions.

Such laws deal with credit repair, debt repair, product safety, service contracts, bill collector regulation, pricing, utility turnoffs, consolidation, personal loans that may lead to bankruptcy and much more.

In the United States a variety of laws at both the federal or state levels regulate consumer affairs. Among them are the federal Fair Debt Collection Practices Act, the Fair Credit Reporting Act, Truth in Lending Act, Fair Credit Billing Act, and the Gramm-Leach-Bliley Act. Federal consumer protection laws are mainly enforced by the Federal Trade Commission and the U.S. Department of Justice.

At the state level, many states have a Department of Consumer Affairs devoted to regulating certain industries and protecting consumers who use goods and services from those industries.

For example, in the U.S. state of California, the California Department of Consumer Affairs regulates about 2.3 million professionals in over 230 different professions, through its forty regulatory entities.

In addition, California encourages its consumers to act as private attorneys general through the liberal provisions of its Consumers Legal Remedies Act, Cal. Civil Code § 1750 et seq.

California has the nation's strongest consumer protection laws, partly because of rigorous advocacy and lobbying by groups such as Utility Consumers' Action Network, Consumer Federation of California and Privacy Rights Clearinghouse.

The European Union has been very active in the field of consumer protection, producing a considerable volume of Directives which require member states to regulate consumer protection to a particular standard (which may or may not allow a higher standard of regulation).

A very important innovation has been the Unfair Commercial Practices Directive. Also Directives on Unfair Contract Terms (93/13/EC) and Electronic Commerce (2000/13/EC). There exists a European Commissioner for Consumer Protection, a post currently held by the Bulgarian Meglena Kuneva.

The Federal Republic of Germany is a member state of the European Union and is bound by the consumer protection directives of the European Union. Thus a large part of German consumer protection law has been enacted pursuant to European Directives (e.g. the directives on door-to-door sales, consumer credits, distance selling, package tours, product liability etc.). In 2002, a large part of this legislation was integrated into the German Civil Code ("Bürgerliches Gesetzbuch").

A minister of the federal cabinet is responsible for consumer rights and protection (Verbraucherschutzminister). In the current cabinet of Angela Merkel, this is Horst Seehofer.

When issuing public warnings about products and services, the issuing authority has to take into account that this affects the supplier's constitutionally protected economic liberty (article 12 Basic Law, see Bundesverwaltungsgericht (Federal Administrative Court)Case 3 C 34.84, 71 BVerwGE 183.

The United Kingdom is a member state of the European Union and so is bound by the consumer protection directives of the European Union. Domestic (UK) laws originated within the ambit of contract and tort but, with the influence of EU law, it is emerging as an independent area of law. In many circumstances, where domestic law is in question, the matter judicially treated as tort, contract, restitution or even criminal law.

Consumer Protection issues are dealt with when complaints are made to the Director-General of Fair Trade. The Office of Fair Trading will then investigate, impose an injunction or take the matter to litigation.

The Office of Fair Trading also acts as the UK's official consumer and competition watchdog, with a remit to make markets work well for consumers, and at a local, municipal level by Trading Standards departments. General consumer advice can be obtained from Consumer Direct or via a local branch of the Citizen's Advice Bureau.

In Australia the corresponding agency is the Australian Competition and Consumer Commission or the individual State Consumer Affairs agencies. In New Zealand, the corresponding agency is the Ministry of Consumer Affairs and the New Zealand Commerce Commission .

Consumer Protection Law in Taiwan is the national special law specifically protects the interest and safety of end-user using the products or services provided by business operators. Consumer Protection Commission of Executive Yuan serves as an ombudsman supervising, coordinating, reporting any unsafe products/services and periodically reviewing the legislations.

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Source : Wikipedia