The Federal Trade Commission (FTC) is an agency of the United States government that focuses on promoting a competitive market and protecting consumers from false advertising and unfair business practices. The agency establishes trade rules that the relevant industries must abide by, and can bring suit in Federal court against offenders who violate trade rules or Federal law. The primary focus of the FTC is regulating interstate commerce. The agency, founded in 1915, is headed by five commissioners and headquartered in Washington, D.C. Although the agency cannot punish offenders directly, it can issue orders of compliance and ultimately sue businesses that continue to flout trade rules.
Numerous measures are undertaken to ensure a fair and free market. The FTC reviews potential major business mergers, for example, to make sure that the merger will not form a monopoly or dominate the market for that particular product or service. It also regulates advertising, and heavily prosecutes businesses that engage in false advertising, as this can be harmful to the running of an unobstructed market. In addition, the FTC monitors certain industries that are prone to repeat offenses, such as the telemarketing and funeral industries. As part of its anti-trust mission, the agency cracks down on price fixing schemes, monopolies, and other questionable business practices.
In addition to promoting a healthy market, the FTC also protects consumers. A section of the staff handles consumer complaints about faulty advertising and handles issues with franchising and business opportunities. The agency oversees the enforcement of the Fair Credit Reporting Act, and also regulates e-commerce. In addition, the FTC has an education mission, aimed at empowering consumers so that they can make informed choices about purchases while also protecting their identities and security. It also oversees issues such as product labeling, including claims about the content and efficacy of products other than drugs, which are regulated by the Food and Drug Administration (FDA).
Many small businesses are also protected tangentially by the FTC. For example, it has trade rules for franchise businesses that force the parent company to fully disclose all information pertaining to the business. The agency's activities in the e-commerce sector have also been beneficial for small businesses. Consumers who feel that they are victims of false advertising or have been otherwise violated should file a claim with the FTC, as should businesses which suspect other companies of potentially harmful business practices.
