Civil Government Enforcement

AuthorAmerican Bar Association
Pages691-796
691
CHAPTER 8
CIVIL GOVERNMENT ENFORCEMENT
A. The Federal Trade Commission
1.
Introduction
The Federal Trade Commission (FTC) is an independent regulatory agency
established by Congress in 1914 to administer the Federal Trade Commission Act
(FTC Act),1 Section 5 of which declares “unfair methods of competition
. . . unlawful.”2 In 1938, the Wheeler-Lea Amendments expanded the agency’s
Section 5 jurisdiction to include “unfair or deceptive acts or practices.”3 Congress left
these phrases undefined, although a 1994 amendment added a new Section 5(n) that
imposed a framework on “unfair or deceptive acts or practices” that focused on the
extent of consumer harm.4 Congress did not address, however, the meaning of “unfair
methods of competition.”
1. 15 U.S.C. §§ 41-58. In addition to the FTC Act, the FTC enforces, at least in part, a variety of other
laws, including the Clayton Act, 15 U.S.C. §§ 12-27, 44, 29 U.S.C. §§ 52-53; Robinson-Patman Act,
15 U.S.C. §§ 13-13b, 21a; Webb-Pomerene Act, 15 U.S.C. §§ 61-65; Wool Products Labeling Act
of 1939, 15 U.S.C. §§ 68-68j; Fur Products Labeling Act, 15 U.S.C. §§ 69-69j; Textile Fiber
Products Identification Act, 15 U.S.C. §§ 70-70k; Federal Cigarette Labeling and Advertising Act,
15 U.S.C. §§ 1331-40; Fair Packaging and Labeling Act, 15 U.S.C. §§ 1451-61; Truth in Lending
Act, 15 U.S.C. §§ 1601-93r; Fair Credit Billing Act, 15 U.S.C. §§ 1666-66j; Consumer Leasing Act
of 1976, 15 U.S.C. §§ 1667-67e; Fair Credit Reporting Act, 15 U.S.C. §§ 1681-81t; Equal Credit
Opportunity Act, 15 U.S.C. §§ 1691-91f; Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-
92o; Electronic Fund Transfer Act, 15 U.S.C. §§ 1693-93r; Hobby Protection Act, 15 U.S.C.
§§ 2101-06; Magnuson-Moss Warranty FTC Improvement Act, 15 U.S.C. §§ 2301-12; Petroleum
Marketing Practices Act, 15 U.S.C. §§ 2821-24; Comprehensive Smokeless Tobacco Health
Education Act, 15 U.S.C. §§ 4401-08; Postal Reorganization Act, 39 U.S.C. § 3009; Telemarketing
and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101-08; Telephone Disclosure and
Dispute Resolution Act, 15 U.S.C. §§ 5711-24; Telecommunications Act of 1996, 47 U.S.C. § 5714;
Home Equity Loan Consumer Protection Act, 15 U.S.C. §§ 1637, 1647; Home Ownership and
Equity Protection Act, 15 U.S.C. § 1639; Credit Repair Organizations Act, 15 U.S.C. §§ 1679-79j;
Children’s Online Privacy Protection Act, 15 U.S.C. §§ 6501-06; Identity Theft Assumption and
Deterrence Act of 1998 18 U.S.C. § 1028; Gramm-Leach-Bliley Act, 15 U.S.C. §§ 6801-09; Energy
Policy and Conservation Act, 42 U.S.C. §§ 6272, 6294, 6363. The FTC summarizes these and other
statutes it enforces on its website. See What We Do, FED. TRADE COMMN (May 2021), available at
https://www.ftc.gov/about-ftc/what-we-do/enforcement-authority.
2. 15 U.S.C. § 45.
3. Id. § 45(a)(1).
4. Section 5(n) provides that an “unfair” act or practice over which the FTC has authority is one that
“causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by
consumers themselves and not outweighed by countervailing benefits to consumers or to
competition.” FTC Act Amendments of 1994, 15 U.S.C. § 45(n). See genera lly FTC v. Sperry &
692 ANTITRUST LAW DEVELOPMENTS (NINTH)
The FTC is composed of five Commissioners appointed for staggered seven-year
terms by the President with the advice and consent of the Senate.5 No more than three
Commissioners may be from the same political party.6 The President designates one
Commissioner as the Chair.7 The Chair has wide-ranging powers to implement the
executive and administrative functions of the FTC, including personnel and budgetary
matters.8 The FTC acts by a majority vote of at least a quorum of the Commission,9
with a quorum defined as a majority of those sitting and not recused in a matter.10
The FTC has three bureaus: the Bureau of Competition, the Bureau of Consumer
Protection, and the Bureau of Economics. The Bureau of Competition is headed by a
bureau director. Reporting to the director are deputy directors and assistant directors
in charge of divisions that handle areas such as mergers, health care, technology
enforcement, anticompetitive practices, compliance, operations, policy and
coordination, and premerger notification.11 The Bureau of Consumer Protection has a
bureau director, as well as deputy directors and assistant directors in charge of
divisions responsible for marketing practices, advertising practices, financial practices,
privacy and identity protection, planning and information, enforcement (compliance),
and consumer and business education. The Bureau of Economics is headed by a bureau
director and deputy directors for antitrust, consumer protection, and research and
management.
The Commission’s other principal units are the Office of the Secretary, Office of
the General Counsel, the Office of International Affairs, and the Office of Policy
Planning. The Office of the Secretary oversees the processing of all matters presented
to the Commission. The office also responds to correspondence and serves as legal
custodian of the Commission’s official record. The General Counsel is the
Commission’s chief legal officer and adviser. The office represents the Commission
in court and counsels the Commission on compliance with a variety of federal statutes,
including the Administrative Procedure Act and the Sunshine Act. The Office of
International Affairs coordinates the FTC’s work with foreign competition and
Hutchinson Co., 405 U.S. 233, 239-44 (1972); FTC v. R.F. Keppel & Bro., 291 U.S. 304, 310-12
(1934).
5. 15 U.S.C. § 41.
6. Id.
7. Id.
8. Reorganization Plan No. 8 of 1950, 5 U.S.C. § 1(a).
9. See FTC v. Flotill Prods., 389 U.S. 179, 183-84 (1967) (majority of quorum sufficient for FTC to
act).
11. FED. TRADE COMMN, ORGANIZATION CHART, available a t
https://www.ftc.gov/system/files/attachments/about-ftc/ftc_org_chart.pdf; FED. TRADE COMMN,
BUREAU OF COMPETITION ORGANIZATION CHART (Sept. 7, 2021), available at
https://www.ftc.gov/system/files/attachments/bureau-competition-organization-
chart/org_chart_v_2021_09_07.pdf; FED. TRADE COMMN, BUREAU OF CONSUMER PROTECTION
ORGANIZATION CHART (July 7, 2021), available a t
https://www.ftc.gov/system/files/attachments/bureau-consumer-protection-organization-chart/bcp-
org-chart.pdf; FED. TRADE COMMN, BUREAU OF ECON., ORGANIZATION CHART (Sept. 9, 2021),
available at https://www.ftc.gov/system/files/attachments/bureau-economics-organization-chart/be-
org-chart.pdf. The Technology Enforcement Division of the FTC was launched in February 2019.
See FED. TRADE COMMN, TECHNOLOGY ENFORCEMENT DIVISION, a vailable at
https://www.ftc.gov/about-ftc/bureaus-offices/bureau-competition/inside-bureau-
competition/technology-enforcement-division.
CIVIL GOVERNMENT ENFORCEMENT 693
consumer protection agencies, and multilateral competition and consumer protection
organizations such as the International Competition Network. The Office of Policy
Planning assists the Commission in formulating competition and consumer protection
policy initiatives, coordinating the Commission’s competition advocacy work, and
organizing public workshops.12
The FTC maintains eight regional offices that have responsibility for
investigational, trial, compliance, and consumer education activities, with oversight by
Bureau management; three of the offices handle competition matters, and all of them
handle consumer protection matters.13 In addition, the FTC often cooperates with other
federal agencies and state attorneys general in implementing its enforcement mandate
and increasingly has coordinated its efforts with foreign governments.14
12. FED. TRADE COMMN, OFFICE OF THE SECRETARY ORGANIZATION CHART (Sept. 2020), available
at https://www.ftc.gov/system/files/attachments/organization-chart/os_org_chart.pdf; FED. TRADE
COMMN, OFFICE OF THE GENERAL COUNSEL ORGANIZATION CHART (Jan. 28, 2021), a vailable a t
https://www.ftc.gov/system/files/attachments/office-general-counsel-organization-
chart/ogc_org_chart_2021-01-28.pdf; FED. TRADE COMMN, OFFICE OF INTERNATIONAL AFFAIRS
ORGANIZATION CHART (2020), available at https://www.ftc.gov/sites/default/files/attachments/
office-international-affairs-organizational-chart/oia-org-chart.pdf; FED. TRADE COMMN, OFFICE
OF POLICY PLANNING ORGANIZATION CHART (Jan. 2021), available at
https://www.ftc.gov/system/files/attachments/organization-chart/opp_org_chart_2020-1-28.pdf.
The other principal units of the agency are the Office of Administrative Law Judges, the Office of
the Executive Director, and the Office of the Inspector General.
13. 16 C.F.R. § 0.19. The regions are as follows (with notations for the three that handle competition as
well as consumer protection matters): Northeast Region (located in New York City and including
Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island,
Vermont, the U.S. Virgin Islands, and Puerto Rico) (competition); Southeast Region (located in
Atlanta and including Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and
Tennessee); East Central Region (located in Cleveland and including Delaware, the District of
Columbia, Maryland, Michigan, Ohio, Pennsylvania, Virginia, and West Virginia); Midwest Region
(located in Chicago and including Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri,
Nebraska, North Dakota, South Dakota, and Wisconsin); Southwest Region (located in Dallas and
including Arkansas, Louisiana, New Mexico, Oklahoma, and Texas); Western Region Los Angeles
(located in Los Angeles and including Southern California, Southern Nevada, Arizona, Hawaii,
Guam, American Samoa, and Northern Mariana Islands) (consumer protection); Western Region
San Francisco (located in San Francisco and including Northern California, Northern Nevada, Utah,
and Colorado) (competition); and Northwest Region (located in Seattle and including Alaska, Idaho,
Montana, Oregon, Washington, and Wyoming) (competition).
14. See, e.g., Press Release, Fed. Trade Comm’n, FTC Chairman Joseph J. Simons Signs Antitrust
Cooperation Framework with Australia, Canada, New Zealand, and United Kingdom (Sep. 2, 2020),
available at https://www.ftc.gov/news-events/press-releases/2020/09/ftc-chairman-simons-signs-
antitrust-cooperation-framework (The Cooperation Framework provides the basis for a series of
agreements that would allow for the sharing of confidential information and the use of compulsory
processes to aid each nation’s antitrust investigations); Press Release, Fed. Trade Comm’n, FTC
Signs Memorandum of Understanding with United Kingdom’s Competition and Markets Authority
to Strengthen Consumer Protection Enforcement Cooperation (Mar. 25, 2019), availa ble at
https://www.ftc.gov/news-events/press-releases/2019/03/ftc-signs-memorandum-understanding-
united-kingdoms-competition (FTC and UK Competition and Markets Authority agree to enhanced
cooperation, including streamlining the sharing of investigative information and providing data
safeguards); Press Release, Fed. Trade Comm’n, FTC and FCC Sign Memorandum of
Understanding for Continued Cooperation on Consumer Protection Issues (Nov. 16, 2015), available
at https://www.ftc.gov/news-events/press-releases/2015/11/ftc-fcc-sign-memorandum-
understanding-continued-cooperation (FTC and FCC formalize the existing cooperation between the
agencies and outline how they will coordinate consumer protection efforts); Press Release, Fed.
Trade Comm’n, FTC and Florida Halt Internet ‘Yellow Pages’ Scammers (July 17, 2014), available

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