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Federal Trade Commission Act

This essay is published for informational purposes only.  It is not legal advice, nor is it intended as a substitute for the advice of your attorney.

The Federal Trade Commission Act created the Federal Trade Commission.  The Act states that all unlawful methods of competition and unfair or deceptive acts or practices in commerce are unlawful. Its prohibitions include false advertising of foods, drugs, devices, and cosmetics, and any other practice that is designed to deceive the public. The Federal Trade Commission Act states that unfair methods of competition, as well as unfair or deceptive acts or practices in or affecting commerce, are unlawful.

Any practice which constitutes a violation of the Sherman Act, the Clayton Act, or the Robinson-Patman Act, or even if it falls short of a violation of such laws but is related to the type of practice which they prohibit may constitute an unfair method of competition in violation of the Federal Trade Commission Act. The ultimate aim of the Act is the protection of the public activities likely to result from the destruction of competition or the restriction of it in a substantial degree.

The Federal Trade Commission is divided into two bureaus. The Competition Bureau enforces that part of the law dealing with "unfair methods of competition." The Consumer Protection Bureau enforces that part of the law condemning "unfair or deceptive acts or practices." Each bureau has broad power to define the business practices that violate the statute.

Edited by Michael C. Dennis.  Mr. Dennis is a business consultant specializing in improving the quote to cash process.