FEDERAL TRADE COMMISSION

The Federal Trade Commission (ftc), established in 1914 as part of President Woodrow Wilson's effort to combat trusts, is an independent regulatory agency charged with ensuring free and fair competition among the nation's businesses (except for banks and common carriers, which are supervised by other agencies). Its five members are appointed to seven-year terms by the president, but a Supreme Court ruling in 1935 established that, once appointed, they cannot be dismissed by the president. The ftc was initially intended to carry out its regulatory functions primarily through economic planning, serving as a clearinghouse of information, publicizing examples of unfair competition, and advising the president and Congress on needed legislation. (These functions are similar to those of the earlier Bureau of Corporations, which it absorbed, but the ftc was given considerably more power than the bureau to do its work, including unprecedented access to corporate records and the right to issue cease-and-desist orders.)

In the years since its creation, however, an increasing portion of ftc work has come to involve enforcement rather than planning; dozens of statutes have made the commission an enforcing agent, giving it responsibility for monitoring gas utilities, preventing unfair price discrimination, reviewing corporate mergers, and maintaining standards for advertising, packaging, and labeling. Because of staff constraints and because court decisions have somewhat reduced its investigatory powers, the ftc does much of its enforcement by working out voluntary industrywide agreements, but it has also brought numerous court suits for unfair business practices. In 1982, complaints to Congress about the ftc from businesses and the medical profession led to a defeat of the agency's usual three-year authorization. Since that time, its funding has been on a year-to-year basis.

See also Antitrust Movement.