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The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal)
antitrust law Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust ...
and the promotion of
consumer protection Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent business ...
. It shares jurisdiction over federal civil antitrust law enforcement with the Department of Justice Antitrust Division. The agency is headquartered in the Federal Trade Commission Building in
Washington, DC Washington, D.C., formally the District of Columbia and commonly known as Washington or D.C., is the capital city and Federal district of the United States, federal district of the United States. The city is on the Potomac River, across from ...
. The FTC was established in 1914 by the
Federal Trade Commission Act The Federal Trade Commission Act of 1914 is a United States federal law which established the Federal Trade Commission. The Act was signed into law by US President Woodrow Wilson in 1914 and outlaws unfair methods of competition and unfair acts ...
, which was passed in response to the 19th-century monopolistic trust crisis. Since its inception, the FTC has enforced the provisions of the
Clayton Act The Clayton Antitrust Act of 1914 (, codified at , ), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their incip ...
, a key U.S. antitrust statute, as well as the provisions of the FTC Act, et seq. Over time, the FTC has been delegated with 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 broad statutory authority granted to the FTC provides it with more surveillance and monitoring abilities than it actually uses. The FTC is composed of five commissioners who were nominated by the
President President most commonly refers to: *President (corporate title) * President (education), a leader of a college or university *President (government title) President may also refer to: Arts and entertainment Film and television *'' Præsident ...
and subject to
Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...
confirmation. Commissioners serve seven-year terms, and by law can only be fired for "inefficiency, neglect of duty, or malfeasance in office.". No more than three FTC members can be from the same
party A party is a gathering of people who have been invited by a Hospitality, host for the purposes of socializing, conversation, recreation, or as part of a festival or other commemoration or celebration of a special occasion. A party will oft ...
. One member of the body serves as FTC Chair at the President's pleasure, with Commissioner Andrew N. Ferguson having served as chair since January 2025. In March 2025, Trump fired two Democratic commissioners without cause, sparking a legal dispute.


History


Early history

In the aftermath of the
U.S. Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that turn on question ...
's landmark decision in ''
Standard Oil Co. of New Jersey v. United States ''Standard Oil Co. of New Jersey v. United States''(1911), was a landmark U.S. Supreme Court decision that ruled that John D. Rockefeller's petroleum conglomerate Standard Oil had illegally monopolized the American petroleum industry and order ...
'' in 1911, the first version of a bill to establish a commission to regulate interstate trade was introduced on January 25, 1912, by Oklahoma congressman
Dick Thompson Morgan Dick Thompson Morgan (December 6, 1853 – July 4, 1920) was an American educator, lawyer and politician who served six terms as a U.S. Representative from Oklahoma from 1909 to 1920. Early life and education Born at Prairie Creek, Indiana, ...
. He would make the first speech on the House floor advocating its creation on February 21, 1912. Though the initial bill did not pass, the questions of trusts and antitrust dominated the 1912 election.A Brief History of the Federal Trade Commission
Federal Trade Commission, 90th Anniversary Symposium.
Most political party platforms in 1912 endorsed the establishment of a federal trade commission with its regulatory powers placed in the hands of an administrative board, as an alternative to functions previously and necessarily exercised so slowly through the courts. With the 1912 presidential election decided in favor of the Democrats and
Woodrow Wilson Thomas Woodrow Wilson (December 28, 1856February 3, 1924) was the 28th president of the United States, serving from 1913 to 1921. He was the only History of the Democratic Party (United States), Democrat to serve as president during the Prog ...
, Morgan reintroduced a slightly amended version of his bill during the April 1913 special session. The national debate culminated in Wilson's signing of the FTC Act on September 26, 1914, with additional tightening of regulations in the
Clayton Antitrust Act The Clayton Antitrust Act of 1914 (, codified at , ), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their inci ...
three weeks later. The new FTC would absorb the staff and duties of
Bureau of Corporations The Bureau of Corporations, predecessor to the Federal Trade Commission, was created as an investigatory agency within the Department of Commerce and Labor in the United States. The Bureau and the Department were created by Congress on February 1 ...
, previously established under the
Department of Commerce and Labor The United States Department of Commerce and Labor was a short-lived United States Cabinet, Cabinet department of the United States Government of the United States, government, which was concerned with fostering and supervising big business. It ...
in 1903. The FTC could additionally challenge "unfair methods of competition" and enforce the Clayton Act's more specific prohibitions against certain price discrimination, vertical arrangements,
interlocking directorate Two or more corporations have interlocking directorates when they share members of their boards of directors or each shares directors with a third firm. A person that sits on multiple boards is known as a ''multiple director''.Scott, 1997p. 7/re ...
s, and stock acquisitions.


Recent history

In 1984,FTC Announces Results of Compliance Testing of Over 300 Funeral Homes in the Second Year of the Funeral Rule Offenders Program
, Federal Trade Commission, February 25, 1998
the FTC began to regulate the
funeral home A funeral home, funeral parlor or mortuary is a business that provides burial, entombment and cremation services for the dead and their families. These services may include a prepared visitation and funeral, and the provision of a chapel for t ...
industry in order to protect consumers from deceptive practices. The FTC
Funeral Rule The Funeral Rule, enacted by the Federal Trade Commission on April 30, 1984, and amended effective 1994, is a U.S. federal regulation designed to protect consumers by requiring that they receive adequate information concerning the goods and servi ...
requires funeral homes to provide all customers (and potential customers) with a General Price List (GPL), specifically outlining goods and services in the funeral industry, as defined by the FTC, and a listing of their prices. By law, the GPL must be presented on request to all individuals, and no one is to be denied a written, retainable copy of the GPL. In 1996, the FTC instituted the Funeral Rule Offenders Program (FROP), under which "funeral homes make a voluntary payment to the U.S. Treasury or appropriate state fund for an amount less than what would likely be sought if the Commission authorized filing a lawsuit for civil penalties. In addition, the funeral homes participate in the NFDA compliance program, which includes a review of the price lists, on-site training of the staff, and follow-up testing and certification on compliance with the
Funeral Rule The Funeral Rule, enacted by the Federal Trade Commission on April 30, 1984, and amended effective 1994, is a U.S. federal regulation designed to protect consumers by requiring that they receive adequate information concerning the goods and servi ...
." 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. In the 2021
United States Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that turn on question ...
case, ''
AMG Capital Management, LLC v. FTC ''AMG Capital Management, LLC v. Federal Trade Commission'', 593 U.S. ___ (2021), was a U.S. Supreme Court case dealing with the ability of the Federal Trade Commission (FTC) to seek monetary relief for restitution or disgorgement from those tha ...
'', the Court found unanimously that the FTC did not have power under of the FTC Act, amended in 1973, to seek equitable relief in courts; it had the power to seek only injunctive relief. In 2023,
Project 2025 Project 2025 (also known as the 2025 Presidential Transition Project) is a political initiative to reshape the federal government of the United States and consolidate executive power in favor of right-wing policies. The plan was published in ...
suggested that an administration could abolish the FTC.


March 2025 attempted firings

On March 18, 2025, President Trump ordered the dismissal of Democratic Commissioners
Alvaro Bedoya Alvaro Martin Bedoya (born February 21, 1982) is an American attorney and government official who served on the Federal Trade Commission (FTC) from 2022 until 18 March 2025, when he was fired by President Donald Trump. Known for his focus on dig ...
and
Rebecca Kelly Slaughter Rebecca Kelly Slaughter (born c. 1983) is an American attorney who was a commissioner of the Federal Trade Commission (FTC). Slaughter was fired by President Trump on March 18, 2025. Slaughter was previously the acting chair of the Federal Trade ...
. Presidents do not have statutory authority to fire FTC commissioners for reasons other than inefficiency, neglect of duty, or malfeasance, none of which were cited in Trump's orders; these restrictions were upheld by the
Supreme Court In most legal jurisdictions, a supreme court, also known as a court of last resort, apex court, high (or final) court of appeal, and court of final appeal, is the highest court within the hierarchy of courts. Broadly speaking, the decisions of ...
in '' Humphrey's Executor v. United States''. Bedoya and Slaughter both stated the attempted firings were unlawful. Bedoya described it as "corruption plain and simple," while Slaughter stated it "violat dthe plain language of a statute and clear Supreme Court precedent." While both Bedoya and Slaughter maintain they remain commissioners, their names have been removed from the FTC website and they do not currently have access to FTC resources. Republicans, including FTC chair Andrew N. Ferguson, have argued that Humphrey's Executor was wrongly decided. Legal analysts expect the firings of Bedoya and Slaughter, along with the attempted firing of Democratic NLRB member Gwynne Wilcox, to serve as a
test case In software engineering, a test case is a specification of the inputs, execution conditions, testing procedure, and expected results that define a single test to be executed to achieve a particular software testing objective, such as to exercise ...
that will enable the Supreme Court to overrule Humphrey's Executor and grant the President unlimited authority to fire commissioners of independent agencies such as the FTC, NLRB, and the Federal Reserve.


Notable work since 2001


Bush administration


Gateway Learning case

In the 2004 case '' In re Gateway Learning Corp.'', the FTC alleged that Gateway committed unfair and deceptive trade practices by making retroactive changes to its privacy policy without informing customers and by violating its own privacy policy by selling customer information when it had said it would not. Gateway settled the complaint by entering into a consent decree with the FTC that required it to surrender some profits and placed restrictions upon Gateway for the following 20 years.


Obama administration

During the Obama Administration,
Jon Leibowitz Jonathan David Leibowitz (born June 17, 1958) is an American attorney who served under President Barack Obama as Chair of the Federal Trade Commission (FTC) from 2009 to 2013. Leibowitz was appointed to the commission in 2004, and resigned in 20 ...
served as the Chair.


Sears Holdings case

In the 2009 case '' In the Matter of Sears Holdings Management Corp.'', the FTC alleged that a research software program provided by Sears was deceptive because it collected information about nearly all online behavior, a fact that was only disclosed in legalese, buried within the end user license agreement. The FTC secured a consent decree in the case.


Money Now Funding / Cash4Businesses case

In September 2013, a federal court closed an elusive
business opportunity A business opportunity refers to the process of selling or leasing product, service, equipment, etc., to help buyers or renters start a new business. It usually includes support or guidance to help someone begin a business, such as choosing a loc ...
scheme on the request of the FTC, namely "Money Now Funding"/"Cash4Businesses". The FTC alleged that the defendants misrepresented potential earnings, violated the National Do Not Call Register, and violated the FTC's Business Opportunity Rule in preventing a fair consumer evaluation of the business. This was one of the first definitive actions taken by any regulator against a company engaging in transaction laundering, where almost US$6 million were processed illicitly. In December 2018, two defendants, Nikolas Mihilli and Dynasty Merchants, LLC, settled with the FTC. They were banned from processing credit card transactions, though the initial monetary judgment of $5.8 million was suspended due to the defendant's inability to pay.


OMICS Publishing Group case

In 2016, the FTC launched action against the academic journal publisher
OMICS Publishing Group OMICS Publishing Group is a predatory publisher of open access academic journals. It started publishing its first journal in 2008. By 2015, it claimed over 700 journals, although about half of them were defunct. Its subsidiaries and brands in ...
for producing predatory journals and organizing predatory conferences. This action, partly in response to ongoing pressure from the academic community, is the first action taken by the FTC against an academic journal publisher. The complaint alleges that the defendants have been "deceiving academics and researchers about the nature of its publications and hiding publication fees ranging from hundreds to thousands of dollars". It additionally notes that "OMICS regularly advertises conferences featuring academic experts who were never scheduled to appear in order to attract registrants" and that attendees "spend hundreds or thousands of dollars on registration fees and travel costs to attend these scientific conferences." Manuscripts are also sometimes held hostage, with OMICS refusing to allow submissions to be withdrawn and thereby preventing resubmission to another journal for consideration. Library scientist
Jeffrey Beall Jeffrey Beall is an American librarian and library scientist who drew attention to "predatory open access publishing", a term he coined, and created Beall's list, a list of potentially predatory open-access publishers. He is a critic of the o ...
has described OMICS as among the most egregious of
predatory publisher Predatory publishing, also write-only publishing or deceptive publishing, is an exploitative academic publishing business model, where the journal or publisher prioritizes self-interest at the expense of scholarship. It is characterized by misle ...
s. In November 2017, a federal court in the Court for the District of Nevada granted a preliminary injunction that: In April 2019, the court imposed a fine of US$50.1 million on OMICS companies for unfair and deceptive business practices.


Activities in the healthcare industry

In addition to prospective analysis of the effects of mergers and acquisitions, the FTC has recently resorted to retrospective analysis and monitoring of consolidated hospitals. Thus, it also uses retroactive data to demonstrate that some hospital mergers and acquisitions are hurting consumers, particularly in terms of higher prices. Here are some recent examples of the FTC's success in blocking or unwinding of hospital consolidations or affiliations:


Phoebe Putney Memorial Hospital and Palmyra Medical Center in Georgia

In April 2011, the FTC successfully challenged in court the $195 million acquisition of Palmyra Medical Center by Phoebe Putney Memorial Hospital. The FTC alleged that the transaction would create a monopoly as it would "reduce competition significantly and allow the combined Phoebe/Palmyra to raise prices for general acute-care hospital services charged to commercial health plans, substantially harming patients and local employers and employees". The
Supreme Court In most legal jurisdictions, a supreme court, also known as a court of last resort, apex court, high (or final) court of appeal, and court of final appeal, is the highest court within the hierarchy of courts. Broadly speaking, the decisions of ...
on February 19, 2013, ruled in favor of the FTC.


ProMedica health system and St. Luke's hospital in Ohio

Similarly, court attempts by ProMedica health system in
Ohio Ohio ( ) is a U.S. state, state in the Midwestern United States, Midwestern region of the United States. It borders Lake Erie to the north, Pennsylvania to the east, West Virginia to the southeast, Kentucky to the southwest, Indiana to the ...
to overturn an order by the FTC to the company to unwind its 2010 acquisition of St. Luke's hospital were unsuccessful. The FTC claimed that the acquisition would hurt consumers through higher premiums because insurance companies would be required to pay more. In December 2011, an administrative judge upheld the FTC's decision, noting that the behavior of ProMedica health system and St. Luke's was indeed anticompetitive. The court ordered ProMedica to divest St. Luke's to a buyer that would be approved by the FTC within 180 days of the date of the order.


OSF healthcare system and Rockford Health System in Illinois

In November 2011, the FTC filed a lawsuit alleging that the proposed acquisition of Rockford by OSF would drive up prices for general acute-care inpatient services as OSF would face only one competitor (SwedishAmerican health system) in the Rockford area and would have a market share of 64%. Later in 2012, OSF announced that it had abandoned its plans to acquire Rockford Health System.


First Trump administration


Meta antitrust acquisitions case

In December 2020, the FTC sued Meta (formally known as Facebook) for anticompetitive conduct under Section 2 of the
Sherman Act The Sherman Antitrust Act of 1890 (, ) is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce and consequently prohibits unfair monopolies. It was passed by Congress and is named for ...
, which prohibits improper monopolization of a market. The FTC accused Meta of buying up its competitors to stifle competition which reduced the range of services available to consumers and by creating fewer social media platforms for advertisers to target.


Biden administration

The FTC was chaired by
Lina Khan Lina Maliha Khan (born March 3, 1989) is an American legal scholar who served from 2021 to 2025 as chair of the Federal Trade Commission (FTC). She is also a professor at Columbia Law School. While a student at Yale Law School, she became known ...
during the Biden Administration.


Google

In November 2024, U.S. District Judge Amit Mehta agreed with Assistant Attorney General
Jonathan Kanter Jonathan Seth Kanter (born July 30, 1973) is an American lawyer who served as United States Assistant Attorney General, Assistant Attorney General for the United States Department of Justice Antitrust Division, Antitrust Division of the United St ...
and FTC Chair Khan, ruling the company a monopoly, and ordering Google to sell its Chrome web browser.


Banning non-compete clauses

The FTC ruled to ban virtually all non-competes nationwide in April 2024. The agency estimates 30 million workers are bound by these clauses and only excludes senior executives from the ban on enforcing non-competes. The agency believes that this will allow workers to find better working conditions and pay, since switching companies, on average, provides the biggest pay raises. It also allows workers to leave abusive work environments and can prevent some doctors from having to leave medicine once they leave a practice. The ban was put on hold by U.S. District Judge Ada Brown on July 3, 2024, but then upheld on appeal by U.S. District Judge Kelley B. Hodge on July 23, 2024. On August 20, 2024, a federal court in Texas overturned the FTC's ban on non-compete agreements, which was originally scheduled to take effect on September 4, 2024. U.S. District Judge Ada Brown said the FTC did not have the authority to issue the ban, which she said was "unreasonably overbroad without a reasonable explanation." Victoria Graham, an FTC spokeswoman responded to the ruling by stating "We are seriously considering a potential appeal..."


Chip manufacturers

The FTC successfully blocked
Nvidia Nvidia Corporation ( ) is an American multinational corporation and technology company headquartered in Santa Clara, California, and incorporated in Delaware. Founded in 1993 by Jensen Huang (president and CEO), Chris Malachowsky, and Curti ...
from purchasing
Arm Holdings Arm Holdings plc (formerly an acronym for Advanced RISC Machines and originally Acorn RISC Machine) is a British semiconductor and software design company based in Cambridge, England, whose primary business is the design of central processing ...
in 2022.


Pharmaceutical drug prices

The FTC has pursued lawsuits against companies to lower drug prices, including for insulin and for inhalers. The FTC launched its investigation into
pharmacy benefit managers In the United States, a pharmacy benefit manager (PBM) is a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, ...
(PBMs) in 2022. In July 2024, it released an interim report on its 2-year investigation into
pharmacy benefit managers In the United States, a pharmacy benefit manager (PBM) is a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, ...
, the agency requested documents from the six largest PBMs as part of its investigation. The three largest – UnitedHealth Group's OptumRx, Cigna's Express Scripts and CVS Health's Caremark – manage about 80% of U.S. prescriptions. The top three PBMs share a parent company with a large medical insurance company. The FTC accused these companies of raising drug prices through
conflicts of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations in whi ...
,
vertical integration In microeconomics, management and international political economy, vertical integration, also referred to as vertical consolidation, is an arrangement in which the supply chain of a company is integrated and owned by that company. Usually each ...
, concentration, and exclusivity provisions; the agency also alleged that the companies created a rebate system that prioritized high rebates from drug manufacturers, among other factors. The agency stated that several PBMs failed to provide documents in a timely manner and warned that it could take the companies to court to force them to comply, during the announcment in the preliminary findings. In September 2024, the FTC sued the three largest pharmacy benefit managers (PBMs) for allegedly engaging in anti-competitive practices that increased their profits while artificially inflating the list price of insulin. The agency is seeking to prohibit the PBMs from favoring medicines because certain pharaceuticals make them more money.


Fake online reviews

In August 2024, the FTC announced it would finalize rules to ban fake reviews online.


Food prices

In February 2024, the FTC challenged the Kroger-Albertsons merger, arguing it would drive up grocery and pharmacy prices, worsen service, and lower wages and working conditions. On December 10, 2024, U.S. District Judge Adrienne Nelson agreed with the FTC, that the merger would risk reducing competition at the expense of both consumers and workers. Judge Nelson halted Kroger’s $24.6 billion acquisition of Albertsons with a preliminary injunction. In March 2024, the FTC released a report that found higher profit margins as a driver of inflation for grocery prices. In August 2024, it announced it would be probing grocery prices to look for anti-competitive behavior and
price gouging Price gouging is the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair by some. This commonly applies to price increases of basic necessities after natural disaste ...
at chain supermarkets.


Junk fees, high prices, and the "click to cancel" subscription rule

In October 2023, the FTC proposed a new rule that would ensure that the cancellation process of subscription services is as easy as the process of signing up. On October 16, 2024, the FTC announced the new rule, dubbed "click to cancel", requiring companies to make subscription services "as easy for consumers to cancel their enrollment as it was to sign up." Khan said in an interview that the new rule is designed so that if consumers signed up online, they must also be able to cancel on the same website in the same number of steps. The rule’s final provisions will go into effect 180 days after it is published in the
Federal Register The ''Federal Register'' (FR or sometimes Fed. Reg.) is the government gazette, official journal of the federal government of the United States that contains government agency rules, proposed rules, and public notices. It is published every wee ...
. On May 9, 2025 the FTC voted to delay enforcing compliance on the "Click to cancel" provision until July 14, 2025. It also targeted airlines and credit card companies over junk fees and high prices. The rule for junk fees which covers, businesses selling live-event tickets and short-term lodging, requires disclosing total price upfront, and no misrepresentations about fees and charges, went into effect on May 12, 2025.


Microsoft merger

In October 2023, the FTC authorized an administrative complaint against the merger between
Microsoft Microsoft Corporation is an American multinational corporation and technology company, technology conglomerate headquartered in Redmond, Washington. Founded in 1975, the company became influential in the History of personal computers#The ear ...
and
Activision Blizzard Activision Blizzard, Inc. is an American video game holding company based in Santa Monica, California. Activision Blizzard currently includes three operating units: Activision, Blizzard Entertainment and King (company), King. Founded in July 2 ...
, Inc. The FTC alleged the deal would suppress competitors from accessing future content/games developed by Activision once the deal goes through. The FTC dropped its lawsuit on July 20, 2023. Microsoft had to restructure its deal to appease UK regulators. Microsoft reneged on promises it made in court filings by laying off 1900 employees in January 2024, signaling that it did not plan to let Activision Blizzard remain as independent as it had promised and leading the FTC to continue to appeal the decision.


Right to repair

In July 2021, the FTC voted unanimously to enforce the right to repair as policy and to look to take action against companies that limit the type of repair work that can be done at independent repair shops. In October 2024, following a comment by the FTC to the US Copyright Office, an exemption was granted allowing for repair of retail-level food preparation equipment, such as McDonald's ice cream machines.


AI

In July 2023, the FTC issued a civil investigative demand to
OpenAI OpenAI, Inc. is an American artificial intelligence (AI) organization founded in December 2015 and headquartered in San Francisco, California. It aims to develop "safe and beneficial" artificial general intelligence (AGI), which it defines ...
to investigate whether the company's
data security Data security or data protection means protecting digital data, such as those in a database, from destructive forces and from the unwanted actions of unauthorized users, such as a cyberattack or a data breach. Technologies Disk encryption ...
and
privacy Privacy (, ) is the ability of an individual or group to seclude themselves or information about themselves, and thereby express themselves selectively. The domain of privacy partially overlaps with security, which can include the concepts of a ...
practices to develop
ChatGPT ChatGPT is a generative artificial intelligence chatbot developed by OpenAI and released on November 30, 2022. It uses large language models (LLMs) such as GPT-4o as well as other Multimodal learning, multimodal models to create human-like re ...
were unfair or harmed consumers (including by reputational harm) in violation of Section 5 of the
Federal Trade Commission Act of 1914 The Federal Trade Commission Act of 1914 is a United States federal law which established the Federal Trade Commission. The Act was signed into law by US President Woodrow Wilson in 1914 and Trade regulation, outlaws unfair methods of Competitio ...
. In July 2023, the FTC launched an investigation into OpenAI, the creator of ChatGPT, over allegations that the company scraped public data and published false and defamatory information. The FTC asked OpenAI for comprehensive information about its technology and privacy safeguards, as well as any steps taken to prevent the recurrence of situations in which its chatbot generated false and derogatory content about people. The agency also reported concern with the Microsoft-Open AI partnership. In particular the circular spending in which Microsoft gives OpenAI credit to
Microsoft Azure Microsoft Azure, or just Azure ( /ˈæʒər, ˈeɪʒər/ ''AZH-ər, AY-zhər'', UK also /ˈæzjʊər, ˈeɪzjʊər/ ''AZ-ure, AY-zure''), is the cloud computing platform developed by Microsoft. It has management, access and development of ...
and the companies provide each other access to engineering talent may have negative impact on the public. In August 2024, the FTC voted unanimously to ban marketers from using fake user reviews created by generative AI chatbots and
influencers A social media influencer, or simply influencer (also known as an online influencer), is a person who builds a grassroots online presence through engaging content such as photos, videos, and updates. This is done by using direct audience intera ...
paying for
bots The British Overseas Territories (BOTs) or alternatively referred to as the United Kingdom Overseas Territories (UKOTs) are the fourteen dependent territory, territories with a constitutional and historical link with the United Kingdom that, ...
to increase follower counts.


Organization


Current members of the FTC

The commission is headed by five commissioners, who each serve seven-year terms. Commissioners are nominated by the
president President most commonly refers to: *President (corporate title) * President (education), a leader of a college or university *President (government title) President may also refer to: Arts and entertainment Film and television *'' Præsident ...
and confirmed by the
Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...
. No more than three commissioners can be of the same
political party A political party is an organization that coordinates candidates to compete in a particular area's elections. It is common for the members of a party to hold similar ideas about politics, and parties may promote specific political ideology, ...
. In practice, this means that two commissioners are of the opposition party. However, three members of the FTC throughout its history have been without party affiliation, with the most recent independent, Pamela Jones Harbour, serving from 2003 to 2009. Notes * The FTC Act allows commissioners to remain in their position after their term expires until a replacement has been appointed.


Backgrounds of commissioners

As of 2021, there have been: * Three
African-Americans African Americans, also known as Black Americans and formerly also called Afro-Americans, are an American racial and ethnic group that consists of Americans who have total or partial ancestry from any of the Black racial groups of Africa. ...
to serve on the FTC: A. Leon Higginbotham Jr. (served from 1962 to 1964), Mozelle W. Thompson (served from 1997 to 2004), Pamela Jones Harbour (served from 2003 to 2009) * Three
Asian-Americans Asian Americans are Americans with ancestry from the continent of Asia (including naturalized Americans who are immigrants from specific regions in Asia and descendants of those immigrants). Although this term had historically been used for ...
to serve on the FTC:
Dennis Yao Dennis Alden Yao (born August 29, 1953) is an American academic who served as a member of the Federal Trade Commission (FTC) from 1991 to 1994. A member of the Democratic Party (United States), Democratic Party, Yao was the first Asian Americans, ...
(served from 1991 to 1994),
Rohit Chopra Rohit Chopra (born January 30, 1982) is an American who was the third director of the Consumer Financial Protection Bureau (CFPB) and previous member of the Federal Trade Commission (FTC). Prior to this, Chopra served as assistant director of the ...
(served from 2018 to 2021), and
Lina Khan Lina Maliha Khan (born March 3, 1989) is an American legal scholar who served from 2021 to 2025 as chair of the Federal Trade Commission (FTC). She is also a professor at Columbia Law School. While a student at Yale Law School, she became known ...
(served since 2021); Khan is the first Asian-American to serve as FTC Chair * Three independents to serve on the FTC: Philip Elman (served from 1961 to 1970), Mary Azcuenaga (served from 1984 to 1998), and Pamela Jones Harbour (served from 2003 to 2009)


Bureaus

The FTC has three main bureaus: the Bureau of Competition, the Bureau of Consumer Protection, and the Bureau of Economics.


Bureau of Competition

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 Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
laws, review of proposed
merger Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorpt ...
s, 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 A justice ministry, ministry of justice, or department of justice, is a ministry or other government agency in charge of the administration of justice. The ministry or department is often headed by a minister of justice (minister for justice in a ...
. 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.


Bureau of Consumer Protection

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 and 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 Telemarketing fraud is fraudulent selling conducted over the telephone. The term is also used for telephone fraud ''not'' involving selling. Telemarketing fraud is one of the most persuasive deceptions identified by the Federal Trade Commission ...
, privacy and identity protection, etc. The bureau also is responsible for the
United States National Do Not Call Registry National Do Not Call Registry is a database maintained by the United States federal government, listing the telephone numbers of individuals and families who have requested that telemarketers not contact them. Certain callers are required by fed ...
. 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 United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the U.S. government that oversees the domestic enforcement of federal laws and the administration of justice. It is equi ...
.


Bureau of Economics

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.


Other offices

* The FTC maintains an Office of Technology Research and Investigation to assist it in technology-related enforcement actions. * The FTC generally selects its Chief Technologist from among computer science academics and noted practitioners. The role has previously been filled by Steven K. Bellovin,
Lorrie Cranor Lorrie Faith Cranor is an American academic who is the FORE Systems Professor of Computer Science and Engineering and Public Policy at Carnegie Mellon University, Director and Bosch Distinguished Professor in Security and Privacy Technologies of ...
, Edward Felten, Ashkan Soltani, and
Latanya Sweeney Latanya Arvette Sweeney is an American computer scientist. She is the Daniel Paul Professor of the Practice of Government and Technology at the Harvard Kennedy School and in the Harvard Faculty of Arts and Sciences at Harvard University. She is th ...
. * The FTC also maintains an academic in residence program, inviting leading legal scholars to join the FTC for a year as a Senior Policy Advisor. The role has been held by
Tim Wu Timothy Shiou-Ming Wu (born 1971 or 1972) is a Taiwanese-American legal scholar who served as Special Assistant to the President for Technology and Competition Policy at the United States from 2021 to 2023. He is also a professor of law at Colum ...
in 2011, Paul Ohm in 2012, and Andrea M. Matwyshyn in 2014.


Activities

The FTC investigates issues raised by reports from consumers and businesses, pre-merger notification filings, congressional inquiries, or reports in the
media Media may refer to: Communication * Means of communication, tools and channels used to deliver information or data ** Advertising media, various media, content, buying and placement for advertising ** Interactive media, media that is inter ...
. These issues include, for instance,
false advertising False advertising is the act of publishing, transmitting, distributing or otherwise publicly circulating an advertisement containing a false claim, or statement, made intentionally, or recklessly, to promote the sale of property, goods or servi ...
and other forms of
fraud In law, fraud is intent (law), intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrato ...
. 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 A consent decree is an agreement or settlement that resolves a dispute between two parties without admission of guilt (in a criminal case) or liability (in a civil case). Most often it is such a type of settlement in the United States. The pl ...
, file an administrative complaint, or initiate federal litigation. During the course of regulatory activities, the FTC is authorized to collect records, but not on-site inspections. 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. Under the FTC Act, the federal courts retain their traditional authority to issue
equitable relief Equitable remedies are judicial remedies developed by courts of equity from about the time of Henry VIII to provide more flexible responses to changing social conditions than was possible in precedent-based common law. Equitable remedies were gr ...
, 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 In administrative law, rulemaking is the process that executive and independent agencies use to create, or ''promulgate'', regulations. In general, legislatures first set broad policy mandates by passing statutes, then agencies create more de ...
power to address concerns regarding industry-wide practices. Rules promulgated under this authority are known as ''Trade Rules''. One of the Federal Trade Commission's other major focuses is
identity theft Identity theft, identity piracy or identity infringement occurs when someone uses another's personal identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes. ...
. 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). The FTC has been involved in the oversight of the online advertising industry and its practice of
behavioral targeting Targeted advertising or data-driven marketing is a form of advertising, including online advertising, that is directed towards an audience with certain traits, based on the product or person the advertiser is promoting. These traits can either ...
for some time. In 2011 the FTC proposed a "
Do Not Track Do Not Track (DNT) is a deprecated non-standard HTTP header field designed to allow internet users to opt out of tracking by websites—which includes the collection of data regarding a user's activity across multiple distinct contexts, and the ...
" mechanism to allow Internet users to
opt-out The term opt-out refers to several methods by which individuals can avoid receiving unsolicited product or service information. This option is usually associated with direct marketing campaigns such as e-mail marketing or direct mail. A list of th ...
of
behavioral targeting Targeted advertising or data-driven marketing is a form of advertising, including online advertising, that is directed towards an audience with certain traits, based on the product or person the advertiser is promoting. These traits can either ...
. The FTC, along with the
Environmental Protection Agency Environmental Protection Agency may refer to the following government organizations: * Environmental Protection Agency (Queensland), Australia * Environmental Protection Agency (Ghana) * Environmental Protection Agency (Ireland) * Environmenta ...
and Department of Justice also empowers third-party enforcer-firms to engage in some regulatory oversight, e.g. the FTC requires other energy companies to audit offshore oil platform operators. In 2013, the FTC issued a comprehensive revision of its Green guides, which set forth standards for environmental marketing.


Unfair or deceptive practices affecting consumers

Section 5 of the Federal Trade Commission Act, grants the FTC power to investigate and prevent ''deceptive'' trade practices. The statute declares that "unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful." Unfairness and deception towards consumers represent two distinct areas of FTC enforcement and authority. The FTC also has authority over unfair methods of competition between businesses.


Definitions of unfairness

Courts have identified three main factors that must be considered in consumer unfairness cases: (1) whether the practice injures consumers; (2) whether the practice violates established public policy; and (3) whether it is unethical or unscrupulous.


Definitions of deception

In a letter to the Chairman of the House Committee on Energy and Commerce, the FTC defined the elements of
deception Deception is the act of convincing of one or many recipients of untrue information. The person creating the deception knows it to be false while the receiver of the information does not. It is often done for personal gain or advantage. Tort of ...
cases. First, "there must be a representation, omission or practice that is likely to mislead the consumer." In the case of omissions, the Commission considers the implied representations understood by the consumer. A misleading omission occurs when information is not disclosed to correct reasonable consumer expectations. Second, the Commission examines the practice from the perspective of a reasonable consumer being targeted by the practice. Finally the representation or omission must be a material onethat is one that would have changed consumer behavior.


= Dot Com Disclosures guide

= In its Dot Com Disclosures guide, the FTC said that "disclosures that are required to prevent deception or to provide consumers material information about a transaction must be presented clearly and conspicuously." The FTC suggested a number of different factors that would help determine whether the information was "clear and conspicuous" including but not limited to: *the placement of the disclosure in an advertisement and its proximity to the claim it is qualifying, *the prominence of the disclosure, *whether items in other parts of the advertisement distract attention from the disclosure, *whether the advertisement is so lengthy that the disclosure needs to be repeated, *whether disclosures in audio messages are presented in an adequate volume and cadence and visual disclosures appear for a sufficient duration, and *whether the language of the disclosure is understandable to the intended audience. However, the "key is the overall net impression."


See also

*
Children's Online Privacy Protection Act The Children's Online Privacy Protection Act of 1998 (COPPA) is a United States federal law The law of the United States comprises many levels of Codification (law), codified and uncodified forms of law, of which the supreme law is ...
*
Competition policy Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust ...
*
Competition regulator A competition regulator is the institution that oversees the functioning of markets. It identifies and corrects practices causing market impediments and distortions through competition law (also known as antitrust law). In general it is a governm ...
*
Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is an independent agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, Payday lo ...
*
Consumer Product Safety Commission The United States Consumer Product Safety Commission (USCPSC, CPSC, or commission) is an independent agency of the United States government. The CPSC seeks to promote the safety of consumer products by addressing "unreasonable risks" of injury ...
*
Fair Debt Collection Practices Act The Fair Debt Collection Practices Act (FDCPA), Pub. L. 95-109; 91 Stat. 874, codified as –1692p, approved on September 20, 1977 (and as subsequently amended), is a consumer protection amendment, establishing legal protection from abusive d ...
*
Franchising Franchising is based on a marketing concept which can be adopted by an organization as a strategy for business expansion. Where implemented, a franchisor licenses some or all of its know-how, procedures, intellectual property, use of its busines ...
* FTC Fair Information Practices * FTC regulation of behavioral advertising *
Gramm–Leach–Bliley Act The Gramm–Leach–Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, () is an act of the 106th United States Congress (1999–2001). It repealed part of the Glass–Steagall Act of 1933, removing barriers in ...
*'' Humphrey's Executor v. United States'' *
Information broker A data broker is an individual or company that specializes in collecting personal data (such as income, ethnicity, political beliefs, or Geolocation and surveillance, geolocation data) or data about people, mostly from public records but sometime ...
*
Sweepstakes In the United States, a sweepstake is a type of contest where a prize or prizes may be awarded to a winner or winners. Sweepstakes began as a form of lottery that were tied to products sold. In response, the FCC and FTC refined U.S. broadcast ...
*'' United States v. Google Inc.''


References


Further reading

* * * *


External links

*
Report fraud website
of the FTC
Federal Trade Commission
in the
Federal Register The ''Federal Register'' (FR or sometimes Fed. Reg.) is the government gazette, official journal of the federal government of the United States that contains government agency rules, proposed rules, and public notices. It is published every wee ...

Federal Trade Commission
in the
Code of Federal Regulations In the law of the United States, the ''Code of Federal Regulations'' (''CFR'') is the codification of the general and permanent regulatory law, regulations promulgated by the executive departments and agencies of the federal government of the ...

FTC Decisions
volumes 1-128 archive from
HathiTrust HathiTrust Digital Library is a large-scale collaborative repository of digital content from research libraries. Its holdings include content digitized via Google Books and the Internet Archive digitization initiatives, as well as content digit ...

Federal Trade Commission
on
USAspending.gov USAspending.gov is a database of spending by the United States federal government. History Around the time of the Federal Funding Accountability and Transparency Act of 2006's passage, OMB Watch, a government watchdog group, was developing a ...
{{Authority control Corporate crime Competition regulators Consumer rights agencies Government agencies established in 1914 Independent agencies of the United States government Organizations based in Washington, D.C. Articles containing video clips