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Example research essay topic: Federal Trade Commission Al 1988 - 1,378 words

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The Federal Trade Commission (FTC) was founded in 1914 after the enactment of the Federal Trade Commission Act. The Commission is headed by five Commissioners, nominated by the President and confirmed by the Senate, each serving a seven-year term. The President chooses one Commissioner to act as Chairman. No more than three Commissioners can be of the same political party.

The Federal Trade Commission enforces a variety of federal antitrust and consumer protection laws. The Commission seeks to ensure that the nation's markets function competitively, and are vigorous, efficient, and free of undue restrictions. The Commission also works to enhance the smooth operation of the marketplace by eliminating acts or practices that are unfair or deceptive (Federal Trade Commission, 1999). In general, the Commission's efforts are directed toward stopping actions that threaten consumers' opportunities to exercise informed choice (Federal Trade Commission, 1999). Finally, the Commission undertakes economic analysis to support its law enforcement efforts and to contribute to the policy deliberations of the Congress, the Executive Branch, other independent agencies, and state and local governments when requested (Federal Trade Commission, 1999). The primary responsibility of the FTC is to keep the United States economy free and fair.

Section 5 of the Federal Trade Commission Act empowers the FTC to prevent unfair methods of competition and unfair or deceptive acts or practices (Barnes, Bowers, Langvardt, Major, Phillips, 1988). The Federal Trade Commission Act also prohibits unfair or deceptive acts or practices in commercial settings. This enables the FTC to govern and regulate a broad range of activities that disadvantage customers. In regulating activities the FTC would need to prove an activity is deceptive or unfair. If the FTC decides to proceed against the alleged offender, they must enter a formal complaint. The case would then be heard in a public administrative hearing called an adjudicative proceeding.

A FTC judge would preside over this proceeding. If an appeal were desired the Ftc's five commissioners would hear the case. After this step would be the federal court of appeals and then the U. S. Supreme Court. The Federal Trade Commission reviews deceptive practices on a case-by-case basis (Barnes et al, 1988).

The court system often defers their judgments to the Commission's determinations. Actual or proven deception is not required; a practice likely to mislead a consumer is also deceptive under the FTC Act. The Commission may require sellers to substantiate their claims by showing a reasonable basis for making such claims (Barnes et al, 1988). The FTC may begin an investigation in different ways. Letters from consumers or businesses, Congressional inquiries, or articles on consumer or economic subjects may trigger FTC action (Federal Trade Commission, 1999). Investigations are either public or nonpublic.

Generally, FTC investigations are nonpublic in order to protect both the investigation and the company. If the FTC believes a violation of the law occurred, it might attempt to obtain voluntary compliance by entering into a consent order with the company (Federal Trade Commission, 1999). 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 (Federal Trade Commission, 1999). If a consent agreement cannot be reached, the FTC may issue an administrative complaint. If an administrative complaint is issued, a formal proceeding that is much like a court trial begins before an administrative law judge: evidence is submitted, testimony is heard, and witnesses are examined and cross-examined (Federal Trade Commission, 1999). Section 5 of the FTC Act also prohibits unfair acts or practices.

The FTC focuses on consumer injury violations. The injury must be substantial, must not be outweighed by any offsetting consumer or competitive benefits produced by the challenged practice, or must be one that consumers could not reasonably have avoided (Barnes et al, 1988). The person, partnership, or corporation so complained of shall have the right to appear at the place and time so fixed and show cause why an order should not be entered by the Commission requiring such person, partnership, or corporation to cease and desist from the violation of the law so charged in said complaint. (U. S. 15: 45).

The FTC can order a respondent to cease engaging in a deceptive or unfair act (Barnes et al, 1988). The FTC can also order a respondent to disclose information related to the deception or unfairness (Barnes et al, 1988). The final remedy the FTC can order is for a seller to do corrective advertising (Barnes et al, 1988). The seller would be asked to retract and republish the advertisement. The FTC can also take a seller to court seeking civil penalties or consumer redress (Barnes et al, 1988). The court shall have jurisdiction to grant such relief as the court finds necessary to redress injury to consumers or other persons, partnerships, and corporations resulting from the rule violation or the unfair or deceptive act or practice, as the case may be (U.

S. 15: 57 b). Such relief may include, but shall not be limited to, rescission or reformation of contracts, the refund of money or return of property, the payment of damages, and public notification respecting the rule violation or the unfair or deceptive act or practice, as the case may be (U. S. 15: 57 b). The Commission can also 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 will have opportunities to attend hearings and file written comments. The Commission will consider 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 (Federal Trade Commission, 1999). A FTC rule may be challenged in any of the U. S. Courts of Appeal.

When issued, these rules have the force of law. The cases we will review all have relevant violations of the FTC ACT section 5. The court will decide in individual cases if the material is skewed in any way, and if the consumer in an impartial circumstance is inclined to be mislead. Businesses have been identified as using false or misleading claims such as U. S. Marketing, Inc.

in the case FTC v. Mitchell D. Gold et, al (Thorleifson, 1998). In this case U. S. Marketing Inc.

has been operating since 1994 as professional fund-raisers. They contract with nonprofit organizations to solicit on their behalf. U. S. Marketing has been named for routinely misrepresenting to induce customers to donate. The counts which state the companies violations include count one, misrepresentation of caller identity, count two misrepresentation of local benefit, count three, misrepresentation of program benefit, count four, misrepresentation that most of donation supports particular programs, count five, misrepresentations about advertising, count six, means and instrumentalities, count seven, failure to substantiate claims, and injury to public interest.

It is not surprising that companies find deception easy to market a product when since the truth about a product is rarely persuasive. Too often businesses lose to deceitful advertising. Advertising has required regulation by the Federal Trade Commission due to corrupt practices. There are businesses that have found the truth about their product is not persuasive enough for the consumer, so they may embellish or imply something the product is not, to achieve success (Williams, 1998). The FTC has cases directly against individuals as in the FTC v. Kevin Trudeau (Damtoft, et, al 1998).

This case involves an individual who has been involved in several businesses where he has advertised erroneous statements. The FTC has determined the defendant has made unsubstantiated statements through radio and television broadcasting. He was the king of infomercials that contained false and misleading statements, which constitutes deceptive practices. In the case FTC v. Screen Test USA the FTC claims that the company violated the Cooling-Off Rule, 16 C. F.

R. Part 429. This rule pertains to unfair and deceptive acts in connection with door- to- door sales, due to the business being conducted outside the sellers business such as hotels. In accordance with door-to-door sales this defendant did not supply the buyer with the right to cancel the sale (Davidson, 1999).

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Research essay sample on Federal Trade Commission Al 1988

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