The Federal Trade Commission

• The Federal Trade Commission Act of 1914 (known as the “FTC Act”) created the body called the Federal Trade Commission (known as the “FTC”).
• Its mission is focused on protecting the public from unfair and deceptive business practices and stopping unfair competition.
• That includes two key kinds of work:
  • consumer protection (for instance going after scammers and businesses that rip people off)
  • antitrust enforcement

FTC – commission structure 1/2

• The FTC is set up as a commission. It has five commissioners, appointed by the president with the advice and consent of the Senate.
• They have staggered terms of seven years.
• By statute, not more than three of the commissioners can be members of the same political party.

FTC – commission structure 2/2

• The FTC was created by Congress as an independent agency – non-partisan and able to exercise judgment without political control.
• By statute, the president could fire FTC commissioners only for things like malfeasance or neglect of duty – not because of policy disagreements.
• In this way, the FTC’s independent status was intended to be unlike executive agencies whose heads serve at the pleasure of the president.
• The constitutionality of the structure was upheld in Humphrey's Executor v. U.S. (U.S. 1935), where President Franklin D. Roosevelt sought to fire an FTC commissioner over policy disagreements.
• But Humphrey’s Executor was overruled by Trump v. Slaughter (U.S. 2026), in which President Trump sought to fire an FTC commissioner over policy disagreements. SCOTUS held the president has the power to fire FTC commissioners at will.

FTC – the agency

• The commission is assisted by a workforce, which in recent years has been over 1,000 employees.
• The FTC has regional offices in Chicago, Cleveland, Dallas, Atlanta, New York, Los Angeles, Seattle, and San Francisco.
• The FTC’s headquarters is the Apex Building in Washington DC.

FTC has three important kinds of authority:

• rule-making authority
• investigatory authority
• enforcement authority

FTC Rulemaking Authority

• The Commission may use rulemaking to address unfair or deceptive practices or unfair methods of competition that occur commonly, in lieu of relying solely on actions against individual respondents.
• The Commission’s rulemaking authority comes from FTC Act §6(g) and §18.
• FTC Act §6(g) authorizes rules concerning unfair methods of competition.
• FTC Act §18 concerns rules addressing unfair or deceptive acts or practices and authorizes the FTC to prescribe “rules which define with specificity acts or practices which are unfair or deceptive acts or practices in or affecting commerce” within the meaning of Section 5(a)(1) of the Act. These rules are known as “trade regulation rules.”

• The statute requires that Commission rulemaking proceedings provide an opportunity for informal hearings at which interested parties are accorded limited rights of cross-examination.
• Before commencing a rulemaking proceeding, the Commission must have reason to believe that the practices to be addressed by the rulemaking are “prevalent.” 15 U.S.C. §57a(b)(3).
• All FTC rules are published in Title 16 of the C.F.R. (Code of Federal Regulations).

FTC Enforcement of its Rules

• Once the Commission has promulgated a trade regulation rule, anyone who violates the rule “with actual knowledge or knowledge fairly implied on the basis of objective circumstances that such act is unfair or deceptive and is prohibited by such rule” is liable for civil penalties for each violation.
• The Commission obtains such penalties by filing a suit in federal district court under FTC Act §5(m)(1)(A).
• In addition, any person who violates a rule (irrespective of the state of knowledge) is liable for injury caused to consumers by the rule violation, which the Commission can recover in a suit for consumer redress under FTC Act §19.

FTC Rules Examples

• requiring gas stations to put octane labels on gasoline pumps
  • upheld in Nat’l Petroleum Refiners Ass’n v. FTC, 482 F.2d 672, 693 (D.C. Cir. 1973), cert. denied, 415 U.S. 951 (1974) (Commission has authority)
• requiring care labels with clothes – e.g., "dry clean only," "wash with like colors," “tumble dry low” and requiring instructions to be visible at purchase
  • so consumers won't be surprised with “dry clean only” or “spot clean only” after purchase
  • 16 C.F.R. Part 423
• eye doctors must supply your lens prescription, allowing consumers to shop around for eyeglasses and contacts
  • so that consumers aren't compelled to purchase glasses and contacts from the eye doctor's affiliate
  • 16 C.F.R. Part 456 (eyeglasses); 16 C.F.R. Part 315 (contact lenses)

FTC Investigative Authority

• The Commission may “prosecute any inquiry necessary to its duties in any part of the United States,” FTC Act §3, and is authorized “to gather and compile information concerning, and to investigate from time to time the organization, business, conduct, practices, and management of any person, partnership, or corporation engaged in or whose business affects commerce [excepting banks, common carriers, etc.]”
• Pre-complaint investigations are generally non-public.
• FTC can issue subpoenas requiring witness testimony and documents. FTC Act §9.
• FTC can require entities to file “annual or special . . . reports or answers in writing to specific questions” with information about the entity’s “organization, business, conduct, practices, management, and relation to other corporations, partnerships, and individuals.” FTC Act §6.

FTC Receipt of Statutorily Required Notices

• Pre-merger Notifications: Under Clayton Act §7A (15 U.S.C. §18a), which was added by the Hart-Scott-Rodino Act of 1976, parties to certain mergers or acquisitions must notify the FTC and DOJ before consummating the deal. FTC (or DOJ) can elect to require information and documents before the deal can be closed. FTC (or DOJ) can then elect to challenge the merger in court.
• Pharma Agreements Notifications: The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires that brand-name drug manufacturers and generic drug applicants file certain agreements with the FTC and DOJ within 10 business days of execution. This allows a window into settlements of patent infringement litigation that may serve as a vehicle for brand-name and generic drug companies to collude to delay the introduction of generic drugs, thus keeping drug prices high.

FTC Enforcement Authority

• The FTC can file complaints against private parties that are adjudicated before an administrative law judge (“ALJ”) in a trial-type proceeding.
• The FTC can file civil lawsuits in federal court to get powerful injunctive relief.
• The FTC does not do any criminal prosecution, but it can refer matters to DOJ for prosecution.

Jay L. Levine, Porter Wright Morris & Arthur LLP, firm blog post, July 22, 2026:

• “The FTC’s substantive statutory authority remains intact, but the likelihood of sharp changes in policy direction may increase.”
• “For businesses, the result may be increased volatility in regulatory policy and a closer connection between antitrust enforcement and presidential priorities.”
• “Potential effects on business planning[:] ... the biggest takeaway is not necessarily more or less enforcement—it is greater uncertainty and faster policy change. Businesses planning transactions, compliance programs, or regulatory strategies may need to place greater weight on: Election outcomes [and] Shifts in agency enforcement priorities”