Figure 12.3
The Federal Trade Commission prevents monopolies, like that of U.S. Steel in the early 20th
century. (Credit: Bruce McAllister/ wikimedia/ License: Public Domain)
The perceived unfairness and fears caused by the consolidation of businesses created strong anti-business
sentiment and increasing cries for price controls to be considered as a remedy for heavily concentrated
industries. These organizations posed economic and social problems that became a large social concern. In
response, the Federal Trade Commission (FTC) was created with broad powers to investigate and propose
formal recommendations to companies about their competitive practices. The FTC did not formally have a
consumer protection mission until the passage of the Wheeler-Lea Act in 1938. This act gave the FTC the power
to combat false advertising for any foods, drugs, medical devices, or cosmetics.
In addition to the Wheeler-Lea Act, subsequent amendments to the FTC Act, as well as judicial respect toward
the agency, broadened the power and jurisdiction of the FTC.
Today, in addition to its original antitrust roots, the FTC enforces consumer protection laws.
Bureaus of the FTC
Several bureaus now stand in support of the FTC’s efforts.
Bureau of Consumer Protection
The Bureau of Consumer Protection protects consumers against unfair trade practices. Bureau attorneys
enforce consumer protection laws issued by the FTC. In addition to enforcement actions, the Bureau’s
functions include investigations and consumer and business training. Unfair trade practices in advertising and
marketing are a main focus, as well as privacy, financial products and practices, and identity protection. The
Bureau also manages the United States National Do Not Call Registry and investigates telemarketing fraud.
Chapter 12 Unfair Trade Practices and the Federal Trade Commission
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