Federal Trade Commission

Unfair compliance methods have always been a prominent threat to businesses. Fraudulent individuals and imposters always bring in new ways to conduct financial crimes. Nevertheless, regulatory bodies come into place with the intention of combating all such deceitful challenges. Likewise, the Federal Trade Commission (FTC) was created in 1914 as an independent agency in the US. Read more about the FTC and its best practices to limit counterfeit acts.

Background of Federal Trade Commission

During the trust-building efforts of Wilston’s administration, the Federal Trade Commission Act brought the FTC into existence and enforced the Clayton Act while restricting monopolistic practices. Before the establishment of the Federal Trade Commission, the Bureau of Corporations was created in 1903 during the Roosevelt administration. As an integral component of the Department of Commerce and Labor, the goal behind the Bureau of Corporations was to ensure business transparency in the best public interest. 

Primary Function of The Federal Trade Commission

The core activities of the FTC are to investigate fraudulent movements of customers, businesses, and media. Nevertheless, the Federal Trade Commission holds the potential to scrutinize a company or even the whole industry. If unlawful activities of companies get unveiled during the investigation process, they can pursue voluntary adherence via consent order, start a federal lawsuit, or file an executive objection. Conventionally, an administrative law judge hears the complaint and can appeal to the US Court and even the Supreme Court. Furthermore, the Federal Trade Commission also deals with grievances of illegal business practices, such as fraud or fake advertising. 

Bureaus of The Federal Trade Commission

The Bureau of Competition

It seeks to control market-distorting consolidations and other anticompetitive industry practices. In fact, the Bureau enforces antitrust laws to promote competition and protects customer autonomy to choose interests and services in the marketplace at a cost and quality that fits their requirements.

The Bureau of Customer Protection

The mandate of this bureau is to guard customers against dishonest, untrustworthy, or fraudulent approaches. The Bureau implements a number of customer security regulations passed by Congress, as well as business regulation rules published by the Commission. Its actions possess particular company and industry-wide examinations, organizational and federal court proceedings, rulemaking litigation, and customer and business education. Additionally, the Bureau led to the Commission’s continuous efforts to notify Congress and other state entities of the impact that suggested actions could have on clients.

Suggested Read: Customer Due Diligence

The Bureau of Economics

The Bureau of Economics helps the Federal Trade Commission in evaluating the economic impact of its activities. For this purpose, the Bureau delivers an in-depth economic breakdown and subsidizes antitrust and customer protection investigations and benchmarking. It also investigates the effect of government law on competition and customers and delivers to Congress, the Executive Branch, and the public a monetary analysis of market operations related to antitrust, client safety, and law.

Real-Time Examples of Federal Trade Commission

FTC Funeral Rule

In 1984, the Federal Trade Commission cracked down on misleading prices in the funeral house industry, enforcing the FTC Funeral Rule. This regulation requires funeral homes to propose a written General Price List (GPL) describing all costs for assistance in the industry to anyone who invites one.

Telemarking Scams

During the 1990s, the Federal Trade Commission also completed several examinations into telemarketing fraud, starting with Project Telesweep in 1995, which smashed down on at least 100 fictitious enterprise opportunity deceptions.

Hefty Fine to Amazon

The massive online retailer Amazon has been ordered by the Federal Trade Commission (FTC) to pay over $61 million in settlement for failing to pay all of the gratuities that Amazon Flex drivers received from Amazon customers in 2021. According to the accusations made against it, Amazon guaranteed its Flex drivers that they would get 100% of the gratuities from consumers while they delivered goods, and the customers were told as much. It kept some of the gratuities that customers gave to its Flex drivers withheld for over two years.

Suggested Read: Digital Markets Act