Federal Trade Commission (Ftc)

Published Oct 25, 2023

Definition of the Federal Trade Commission (FTC)

The Federal Trade Commission (FTC) is an independent agency of the United States government. It was established in 1914 with the goal of preventing anti-competitive business practices and protecting consumers from unfair or deceptive practices. The FTC is responsible for enforcing various federal consumer protection and antitrust laws, including the Sherman Act and the Federal Trade Commission Act.

Example

To illustrate the role of the FTC, let’s consider a hypothetical case. Imagine a large tech company that dominates the market for smartphones. This company has been accused of engaging in anti-competitive behavior by using its market power to crush potential competitors and stifle innovation. The FTC would investigate these allegations, gathering evidence and conducting hearings.

If the FTC finds that the company has indeed violated antitrust laws, it can take legal action. This may involve imposing fines, requiring the company to change its business practices, or even seeking a court order to break up the company. The ultimate goal is to promote fair competition and protect consumers from monopolistic behavior.

Why the FTC Matters

The FTC plays a crucial role in ensuring a competitive marketplace and safeguarding consumer interests. By preventing anti-competitive practices, such as monopolies, price-fixing, and deceptive advertising, the FTC helps maintain a level playing field for businesses and promotes consumer welfare. Its actions contribute to the overall economic health of the country and promote fair and ethical business practices.