Business Law - The Federal Trade Commission

Hey there, thanks for joining me for this video. We're going to be exploring the Federal Trade Commission, commonly referred to as the FTC. Now the FTC is a pivotal regulatory body that's dedicated to safeguarding consumers as well as maintaining fair competition. So in this video, we're going to explore how the FTC was created, its overarching purpose, and the overall process it follows when bringing in action.

Now the Federal Trade Commission, or FTC, came into existence actually in 1914 with the passage of the Federal Trade Commission Act. Now this particular piece of legislation addressed concerns about unfair business practices and anti-competitive behavior that was pretty common during the late 1800s and early 1900s and ultimately established the FTC as an independent agency with the authority to enforce antitrust laws and also promote fair competition. Now the overarching purpose of the FTC is ultimately to protect consumers and shore fair and competitive business practices. So through its regulatory actions, law enforcement, and educational initiatives, the FTC works to prevent and address deceptive practices and anti-competitive conduct in the marketplace.

Now that we know a little about the FTC, let's talk a little about how they actually go through the investigative process and ultimately bring an action against a particular company. Now when the FTC identifies a potential violation, it initiates an investigation involving collecting evidence, interviewing witnesses, as well as record analysis. And if a violation is confirmed, the FTC has several courses of action. So one of the first things that the FTC might do is initiate what we call a consent order.

So in certain cases, the FTC may opt for this consent order, which essentially is an agreement between the FTC and the alleged violator, outlining specific actions the company has to take to remedy the situation. So the consent order often involves committing to change business practices, undergoing maybe some sort of regular compliance audit, and maybe even paying restitution to affect consumers. Now, of course, the alleged violator has the ability to accept that or not, which can of course take us down the road to the FTC filing for a cease and desist order. Now a cease and desist order basically mandates that the business halts the identified unfair practice.

This is something that is approved by a judge. Then obviously the alleged violator has no choice but to follow along or face penalties that can be particularly costly, not only in terms of reputation, but also in terms of monetary penalties for the company or the alleged violator. The FTC continues to be actively involved in shaping and regulating fair and competitive practices in the United States today. Thank you for joining me for this lecture on the Federal Trade Commission.

I hope you enjoyed it and we'll see you next time.