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The FTC: An Overview for Business Owners

October 23, 2017

 

 

 The Federal Trade Commission (the “FTC”) is a federal agency with two missions:

 

1) to protect consumers

 

2) to promote competition

 

 

Consumer Protection

 

How does the FTC protect consumers? The FTC is the governmental body that investigates and sues companies and people that act unfairly, deceptively, and act fraudulently in the marketplace. To accomplish this, the FTC collects complaints regarding a broad variety of issues from deceptive advertising to identity theft and data security.

 

The Promotion of Competition

 

The United States, like many countries, believes that competition is imperative for a healthy marketplace. Competition keeps prices low and creates a need for high quality goods and services. As a result, our nation has implemented a number of antitrust laws designed to prevent anticompetitive practices. These anticompetitive practices range from price fixing, mergers that result in too much market power being concentrated in too few companies or individuals, and other practices that are harmful to consumers. The FTC enforces our antitrust laws by challenging anticompetitive business practices and anticompetitive mergers.

 

 

What does the FTC mean for business owners?

 

As a business owner, it is important that you are aware of the rules and regulations that apply to your industry. Here is a broad overview of the types of industries and behavior that create concerns - 

 

Marketing and Advertising -

 

The FTC not only requires that claims made in advertising be truthful and evidence-based, they also have very strict guideline how how you can market to children, utilize endorsements, make health claims and claims about environmental impacts of your goods and services, telemarked, and claim that your product is “Made in USA.” The FTC is also very stringent about how companies can make use of online marketing, and has set forth many requirements regarding the disclosures, policies, and internal procedures you must have in place to use a website for commercial purposes.

 

Credit and Finance - 

 

Applicable to most business owners today, the FTC enforces the steps that a business must take to ensure that customer credit and debit cards, as well as other accounts, are properly authorized. The FTC also enforces laws that govern a company’s ability to collect debt, help consumers with their debts, and extend credit to consumers.

 

Privacy and Security - 

 

The FTC plays a large role in ensuring the privacy and security of consumer information. As a result, business owners must take care to abide by applicable laws to properly handle the information provided to them - whether it be contact information, financial information, or otherwise. This duty of care extends to the collection of personal information online, and has created the necessity for every company with a website that collects even the most basic user information to have a properly-drafted privacy policy posted and clearly visible to users.

 

Other Industry-Specific Rules and Regulations-

 

Some industries are more tightly governed than others. In addition to the broad enforcement of the practices above, he FTC enforces laws that are specific to the following industries:

  • Alcohol

  • Appliances

  • Automobiles

  • Clothing and Textiles

  • Finance

  • Franchises, Business Opportunities, and Investments

  • Funerals

  • Human Resources

  • Jewelry

  • Non-Profits

  • Real Estate and Mortgages

  • Tobacco

 

To you business owners out there, we ask that you please familiarize yourself with the resources on the FTC website. The rules and regulations enforced by the FTC are often dense and complex. If you have any questions or need any assistance, we are always happy to help.

 About the Author: 

 

David "Tyler" Bennett is a business and intellectual property attorney, and he is a partner at Verhagen | Bennett LLP.  To learn more about David, please click here.

 

For questions or comments about this post, please email David directly at: David@VerhagenBennett.com

 

To make suggestions about future posts, please email: Info@VerhagenBennett.com

 

 

 

 

 

© 2017 David T. Bennett — This article is for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.