The Federal Trade Commission Act of 1914 created the Federal Trade Commission (FTC).
The FTC enforces the Clayton and Federal Trade Commission Acts as well as other competition statues and federal consumer protection laws. The FTC is also competent to make rulings under its rulemaking authority interpreting the competition laws. In the event of breach or contravention of the laws, the FTC is empowered to institute civil proceedings in a federal district court for injunctive relief as well as civil damages.
Due to the cumbersome and time consuming nature of the court processes, before the setting up of the FTC, often many years rolled by from the initial filing of a complaint to a final adjudication. The FTC, in contrast, being an administrative agency is not bound by the strict rules of evidence and does not have to use juries. Moreover, jury trials may produce mutually contradictory results in different courts. Accordingly, in urgent circumstances the commissioners of the FTC themselves can issue "cease and desist" order directing parties that certain practice must be stopped. Moreover, instead of a hierarchy of courts, a single commission like the FTC can clarify and give advance rulings interpreting different aspects of the law of unfair practices leading to certainty in the state of the law.
A merger is the taking over of one company by another. The FTC has set norms that disapprove mergers reducing competition. Any restraint of trade or competition due to merger is illegal.
The FTC and the Department of Justice invokes the provisions of the Clayton Act against anticompetitive mergers more or less on the same parameters or yardsticks. When a merger either creates a monopoly or makes it more likely that the new combined corporation will engage in price-fixing or oligopoly behavior, action under the anti merger laws are triggered off.
The Magnuson-Moss Warranty Act was enacted by Congress in response to the widespread breach of warranties and promises on consumer products. The function of the Federal Trade Commission is to enforce such warranties and promises on consumer products in terms of the Magnuson-Moss Warranty Act.
By virtue of the provisions of the FTC Act, FTC prescribes trade regulation rules as to what constitutes unfair methods of competition and deceptive practices, establishes requirements to prevent such practices and conducts investigations into such practices.
