Civil Government Enforcement

• Author: Ronan P. Harty
• Pages: 691-796

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 COMM’N (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).

10. See 16 C.F.R. § 4.14(b).

11. FED. TRADE COMM’N, ORGANIZATION CHART, available a t

https://www.ftc.gov/system/files/attachments/about-ftc/ftc_org_chart.pdf; FED. TRADE COMM’N,

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 COMM’N, 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 COMM’N, 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 COMM’N, 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 COMM’N, 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

COMM’N, 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 COMM’N, 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 COMM’N, 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