The Federal Trade Commission (FTC), established as an
independent government agency in 1915, enforces antitrust
laws and ensures that American businesses engage in fair
competition. The five-member commission focuses on the
prevention of interlocking directorates, monitors the
acquisition of capital stock, and deals with issues such as false
advertising. The FTC also enforces the Trust in Lending Act.
The only industries that the commission does not have
jurisdiction over are banks and common carriers.
An Act To create a Federal Trade Commission, to define its
powers and duties, and for other purposes.
Be it enacted by the Senate and the House of Representatives of the United States of America in Congress assembled, That a commission is hereby created and established, to
be known as the Federal Trade Commission (hereinafter
referred to as the commission), which shall be composed of
five commissioners, who shall be appointed by the President,
by and with the advice and consent of the Senate. Not more
than three of the commissioners shall be members of the
same political party. The first commissioners appointed shall
continue in office for terms of three, four, five, six, and seven
years, respectively, from the date of the taking effect of this
Act, the term of each to be designated by the President, but
their successors shall be appointed for terms of seven years,
except that any person chosen to fill a vacancy shall be
appointed only for the unexpired term of the commissioner
whom he will succeed. The commissioner shall choose a
chairman from its own membership. No commissioner shall
engage in any other business, vocation, or employment. Any
commissioner may be removed by the President for inefficiency, neglect of duty, or malfeasance in office. A vacancy in
the commission shall not impair the right of the remaining
commissioners to exercise all the powers of the commission.
The commission shall have an official seal, which shall be
judicially noticed.
Sec. 2. That each commissioner shall receive a salary of
$10,000 a year, payable in the same manner as the salaries of
the judges of the courts of the United States. The commission
shall appoint a secretary, who shall receive a salary of $5,000
a year, payable in like manner, and it shall have the authority
to employ and fix the compensation of such attorneys, special experts, examiners, clerks, and other employees as it may
from time to time find necessary for the proper performance
of its duties and as may be from time to time appropriated for
by Congress.
With the exception of the secretary, a clerk to each commissioner, the attorneys, and such special experts and examiners as the commission may from time to time find
necessary for the conduct of its work, all employees of the
commission shall be part of the classified civil service, and
shall enter the service under such rules and regulations as
may be prescribed by the Civil Service Commission.
All of the expenses of the commission, including all necessary expenses for transportation incurred by the commissioners or by employees under their orders, in making any
investigation, or upon official business in any other places
than in the city of Washington, shall be allowed and paid on
the presentation of itemized vouchers therefor approved by
the commission.
Until otherwise provided by law, the commission may rent
suitable offices for its use.
The Auditor for the State and other Departments shall
receive and examine all accounts of expenditures of the commission.
Sec. 3. That upon the organization of the commission and
election of its chairman, the Bureau of Corporations and the
offices of Commissioner and Deputy Commissioner of
Corporations shall cease to exist; and all pending investigations and proceedings of the Bureau of Corporations shall be
continued by the commission.
All clerks and employees of the said bureau shall be transferred to and become clerks and employees of the commission at their present grades and salaries. All records, papers,
and property of the said bureau shall become records, papers,
and property of the commission, and all unexpected funds
and appropriations for the use and maintenance of the said
bureau, including any allotment already made to it by the
Secretary of the Commerce from the contingent appropriation for the Department of Commerce for the fiscal year
nineteen hundred and fifteen, or from the departmental
printing fund for the fiscal year nineteen hundred and fifteen,
shall become funds and appropriations available to be
extended by the commission in the exercise of the powers,
authority, and duties conferred on it by this Act.
The principal office of the commission shall be in the city
of Washington, but it may meet and exercise all its powers at
any other place. The commission may, by one or more of its
members, or by such examiners as it may designate, prosecute any inquiry necessary to its duties in any part of the
United States.
Sec. 4. That the words defined in this section shall have the
following meaning when found in this Act, to wit:
“Commerce” means commerce among the several States or
with foreign nations, or in any Territory of the United States
or in the District of Columbia, or between any such Territory
and another, or between any such Territory and any State or
foreign nation, or between the District of Columbia and any
State or Territory or foreign nation.
“Corporation” means any company or association incorporated or unincorporated, which is organized to carry on
business for profit and has shares of capital or capital stock,
and any company or association, incorporated or unincorporated, without shares of capital or capital stock, except partnerships, which is organized to carry on business for its own
profit or that of its members.
“Documentary evidence” means all documents, papers,
and correspondence in existence at and after the passage of
this Act.
“Acts to regulate commerce” means the Act entitled “An
Act to regulate commerce,” approved February fourteenth,
eighteen hundred and eighty-seven, and all Acts amendatory
thereof and supplementary thereto.
“Antitrust acts” means the Act entitled “An Act to protect
trade and commerce against unlawful restraints and monopolies,” approved July second, eighteen hundred and ninety;
also the sections seventy-three to seventy-seven, inclusive, of
an Act entitled “An Act to reduce taxation, to provide revenue
for the Government, and for other purposes,” approved
August twenty-seventh, eighteen hundred and ninety-four;
and also the Act entitled “An Act to amend sections seventythree and seventy-six of the Act of August twenty-seventh,
eighteen hundred and ninety-four, entitled ‘An Act to reduce
taxation, to provide revenue for the Government, and for
other purposes,’” approved February twelfth, nineteen hundred and thirteen.
Sec. 5. That unfair methods of competition in commerce
are hereby declared unlawful. The commission is hereby
empowered and directed to prevent persons, partnerships, or
corporations, except banks, and common carriers subject to
the Acts to regulate commerce, from using unfair methods of
competition in commerce.
Whenever the commission shall have reason to believe
that any such person, partnership, or corporation has been
or is using any unfair method of competition in commerce,
and if it shall appear to the commission that a proceeding by
it in respect thereof would be to the best interest of the public, it shall issue and serve upon such person, partnership, or
corporation a complaint stating its charges in that respect,
and containing a notice of a hearing upon a day and a place
therein fixed at least thirty days after the service of said complaint. The person, partnership, or corporation so complained of shall have the right to answer at the place and time
so fixed and show cause why an order should not be entered
by the commission requiring such person, partnership, or
corporation to cease and desist from the violation of the law
so charged in said complaint. Any person, partnership, or
corporation may make application, and upon good cause
shown may be allowed by the commission, to intervene and
appear in said proceeding shall be reduced to writing and
filed in the office of the commission. If upon such hearing
the commission shall be of the opinion that the method of
competition in question is prohibited by this Act, it shall
make a report in writing in which it shall state its findings as
to the facts, and shall issue and cause to be served on such
person, partnership, or corporation an order requiring such
person, partnership, or corporation to cease and desist from
using such method of competition. Until a transcript of the
record in such hearing shall have been filed in a circuit court
of appeals of the United States, as hereinafter provided, the
commission may at any time, upon such notice and in such
manner as it shall deem proper, modify or set aside, in whole
or in part, any report or any order made or issued by it under
this section.
If such person, partnership, or corporation fails or neglects to obey such order of the commission while the same is
in effect, the commission may apply to the circuit court of
appeals of the United States, within any circuit where the
method of competition in question was used or where such
person, partnership, or corporation resides or carries on
business, for the enforcement of its order, and shall certify
and file with its application a transcript of the entire record
in the proceeding, including all the testimony taken and the
report and order of the commission. Upon such filing of the
application and transcript the court shall cause notice
thereof to be served upon such person, partnership, or corporation and thereupon shall have jurisdiction of the proceeding and of the question determined therein, and shall
have the power to make and enter upon the pleadings, testimony, and proceedings set forth in such transcript a decree
affirming, modifying, or setting aside the order of the commission. The findings of the commission as to the facts, if
supported by testimony, shall be inclusive. If either party
shall apply to the court for leave to adduce additional evidence, and shall show to the satisfaction of the court that
such additional evidence is material and that there is reasonable grounds for the failure to adduce such evidence in the
proceeding before the commission, the court may order such
additional evidence to be taken before the commission and
to be adduced upon the hearing in such manner and upon
such terms and conditions as the court may deem proper.
The commission may modify its findings as to the facts, or
make new findings, by reason of the additional evidence so
taken, and it shall file such modified or new findings, which,
if supported by testimony, shall be conclusive, and its recommendation, if any, for the modification or setting aside of
its original order, with the return of such additional evidence. The judgment and decree of the court shall be final,
except that the same shall be subject to review by the
Supreme Court upon certiorari as provided in section two
hundred and forty of the Judicial Code.
Any party required by such order of the commission to
cease and desist from using such method of competition may
obtain a review of such order in said circuit court of appeals
by filing in the court a written petition praying that the order
of the commission be set aside. A copy of such petition shall
be forthwith served upon the commission, and thereupon the
commission forthwith shall certify and file in the court a
transcript of the record as hereinbefore provided. Upon the
filing of the transcript the court shall have the same jurisdiction to affirm, set aside, or modify the order of the commission as in the case of an application by the commission for
the enforcement of its order, and the findings of the commission as to the facts, if supported by testimony, shall in like
manner be conclusive.
The jurisdiction of the circuit court of appeals of the
United States to enforce, set aside, or modify orders of the
commission shall be exclusive.
Such proceedings in the circuit court of appeals shall be
given precedence over other cases pending therein, and shall
be in every way expedited. No order of the commission or
judgment of the court to enforce the same shall in any wise
relieve or absolve any person, partnership, or corporation
from any liability under the antitrust acts.
Complaints, orders, and other processes of the commission under this section may be served by anyone duly authorized by the commission, either (a) by delivering a copy
thereof to the person to be served, or to a member of the
partnership to be served, or to the president, secretary, or
other executive officer or a director of the corporation to be
served; or (b) by leaving a copy thereof at the principal office
or place of business of such person, partnership, or corporation; or (c) by registering and mailing a copy thereof
addressed to such person, partnership, or corporation at his
or its principal office or place of business. The verified return
by the person so serving said complaint, order, or other
process setting forth the manner of said service shall be proof
of the same, and the return post-office receipt for said complaint, order, or other process registered and mailed as aforesaid shall be proof of the service of the same.
Sec. 6. That the commission shall also have the power—
(a) To gather and compile information concerning, and to
investigate from time to time the organization, business, conduct, practices, and management of any corporation engaged
in commerce, excepting banks and common carriers subject
to the Act to regulate commerce, and its relation to other corporations and to individuals, associations, and partnerships.
(b) To require, by general or special orders, corporations
engaged in commerce, excepting banks, and common carriers subject to the Act to regulate commerce, or any class of
them, or any of them, respectively, to file with the commission in such form as the commission may prescribe annual or
special, or both annual and special, reports or answers in
writing to specific questions, furnishing to the commission
such information as it may require as to the organization,
business, conduct, practices, management, and relation to
other corporations, partnerships, and individuals of the
respective corporations filing such reports or answers in writing. Such reports and answers shall be made under oath, or
otherwise, as the commission may prescribe, and shall be
filed with the commission within such reasonable period as
the commission may prescribe, unless additional time be
granted in any case by the commission.
(c) Whenever a final decree has been entered against any
defendant corporation in any suit brought by the United
States to prevent and restrain any violation of the antitrust
Acts, to make investigation, upon its own initiative, of the
manner in which the decree has been or is being carried out,
and upon the application of the Attorney General it shall be
his duty to make such investigation. It shall transmit to the
Attorney General a report embodying its findings and recommendations as result of any such investigation, and the report
shall be made public in the discretion of the commission.
(d) Upon the direction of the President or either House of
Congress to investigate and report the facts relating to any
alleged violations of the antitrust Acts by any corporation.
(e) Upon the application of the Attorney General to investigate and make recommendations for the readjustment of
the business of any corporation alleged to be violating the
antitrust Acts in order that the corporation may thereafter
maintain its organization, management, and conduct of
business in accordance with law.
(f) To make public from time to time such portions of the
information obtained by it hereunder, except trade secrets
and names of customers, as it shall deem expedient in the
public interest; and to make annual and special reports to the
Congress and to submit therewith recommendations for
additional legislation; and to provide for the publication of
its reports and decisions in such form and manner as may be
best adapted for public information and use.
(g) From time to time to classify corporations and to make
rules and regulations for the purpose of carrying out the provisions of this Act.
(h) To investigate, from time to time, trade conditions in
and with foreign countries where associations, combinations,
or practices of manufacturers, merchants, or traders, or other
conditions, may affect the foreign trade of the United States,
and to report to Congress thereon, with such recommendations as it deems advisable.
Sec. 7. That in any suit in equity brought by or under the
direction of the Attorney General as provided in the
antitrust Acts, the court may, upon the conclusion of the testimony therein, if it shall be then of opinion that the complainant is entitled to relief, refer said suit to the
commission, as a master in chancery, to ascertain and report
an appropriate form of decree therein. The commission shall
proceed upon such notice to the parties and under such
rules of procedure as the court may prescribe, and upon the
coming in of such report such exceptions may be filed and
such proceedings had in relation thereto as upon the report
of a master in other equity causes, but the court may adopt
or reject such report, in whole or in part, and enter such
decree as the nature of the case may in its judgment require.
Sec. 8. That the several departments and bureaus of the
Government when directed by the President shall furnish
with the commission, upon its request, all records, papers,
and information in their possession relating to any corporation subject to any of the provisions of this Act, and shall
detail from time to time such officials and employees to the
commission as he may direct.
Sec. 9. That for the purposes of this Act the commission,
or its duly authorized agent or agents, shall at all reasonable
times have access to, for the purpose of examination, and the
right to copy any documentary evidence of any corporation
being investigated or proceeded against; and the commission
shall have the power to require by subpoena the attendance
and testimony of witnesses and the production of all such
documentary evidence relating to any matter under investigation. Any member of the commission may sign subpoenas,
and members and examiners of the commission may administer oaths and affirmations, examine witnesses, and receive
evidence.
Such attendance of witnesses, and the production of such
documentary evidence, may be required from any place in
the United States, at any designated place of hearing. And in
case of disobedience to a subpoena the commission may
invoke the aid of any court of the United States in requiring
the attendance and testimony of witnesses and the production of documentary evidence.
Any of the district courts of the United States within the
jurisdiction of which such inquiry is carried on may, in case
of contumacy or refusal to obey a subpoena issued to any
corporation or other person, issue an order requiring such
corporation or other person to appear before the commission, or to produce the documentary evidence if so ordered,
or to give evidence touching the matter in question; and any
failure to obey such order of the court may be punished by
such court as a contempt thereof.
Upon the application of the Attorney General of the
United States, at the request of the commission, the district
courts of the United States shall have the jurisdiction to issue
writs of mandamus commanding any person or corporation
to comply with the provisions of this Act or any order of the
commission made in pursuance thereof.
The commission may order testimony to be taken by deposition in any proceeding or investigation pending under this
Act at any stage of such proceeding or investigation. Such
depositions may be taken before any person designated by
the commission and having power to administer oaths. Such
testimony shall be reduced to writing by the person taking
the deposition, or under his direction, and shall then be subscribed by the deponent. Any person may be compelled to
appear and depose and to produce documentary evidence in
the same manner as witnesses may be compelled to appear
and testify and produce documentary evidence before the
commission as herein provided.
Witnesses summoned before the commission shall be paid
the same fees and mileage that are paid witnesses in the
courts of the United States, and witnesses whose depositions
are taken and the persons taking the same shall severally be
entitled to the same fees as are paid for like services in the
courts of the United States.
No person shall be excused from attending and testifying
or from producing documentary evidence before the commission or in obedience to the subpoena of the commission
on the ground or for the reason that the testimony or evidence, documentary or otherwise, required of him may tend
to criminate him or subject him to a penalty or forfeiture.
But no natural person shall be prosecuted or subjected to
any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he may testify, or
produce evidence, documentary or otherwise, before the
commission in obedience to a subpoena issued by it:
Provided, That no natural person so testifying shall be
exempt from prosecution and punishment for perjury committed in so testifying.
Sec. 10. That any person who shall neglect or refuse to
attend and testify, or to answer any lawful inquiry, or to produce documentary evidence, if in his power to do so, in obedience to the subpoena or lawful requirement of the
commission, shall be guilty of an offense and upon conviction thereof by a court of competent jurisdiction shall be
punished by a fine of not less than $1,000 nor more than
$5,000, or by imprisonment for not more than one year, or by
both such fine and imprisonment.
Any person who shall willfully make, or cause to be made,
any false entry or statement of fact in any report required to
be made under this Act, or who shall willfully make, or cause
to be made, any false entry in any account, record, or memorandum kept by any corporation subject to this Act, or who
shall willfully neglect or fail to make, or to cause to be made,
full, true, and correct entries in such accounts, records, or
memoranda of all facts and transactions appertaining to the
business of such corporation, or who shall willfully remove
out of the jurisdiction of the United States, or willfully mutilate, alter, or by other means falsify any documentary evidence of such corporation, or who shall willfully refuse to
submit to the commission or to any of its authorized agents,
for the purpose of inspection and taking copies, any documentary evidence of such corporation in his possession or
within his control, shall be deemed guilty of an offense
against the United States, and shall be subject, upon conviction in any court of the United States of competent jurisdiction, to a fine of not less than $1,000 nor more than $5,000,
or to imprisonment for a term not more than three years, or
to both such fine and imprisonment.
If any corporation required by this Act to file any annual
or special report shall fail to do so within the time fixed by the
commission for filing the same, and such failure shall continue for thirty days after notice of such default, the corporation shall forfeit to the United States the sum of $100 for each
and every day of the continuance of such failure, which forfeiture shall be payable into the Treasury of the United States,
and shall be recoverable in a civil suit in the name of the
United States brought in the district where the corporation
has its principal office or in any district in which it shall do
business. It shall be the duty of the various district attorneys,
under the direction of the Attorney General of the United
States, to prosecute for the recovery of forfeitures. The costs
and expenses of such prosecution shall be paid out of the
appropriation for the expenses of the courts of the United
States.
Any officer or employee of the commission who shall
make public any information obtained by the commission
without its authority, unless directed by a court, shall be
deemed guilty of a misdemeanor, and, upon conviction
thereof, shall be punished by a fine not exceeding $5,000, or
by imprisonment not exceeding one year, or by fine and
imprisonment, in the discretion of the court.
Sec. 11. Nothing contained in this Act shall be construed
to prevent or interfere with the enforcement of the provisions
of the antitrust Acts or the Acts to regulate commerce, nor
shall anything contained in this Act be construed to alter,
modify, or repeal the said antitrust Act or the Acts to regulate
commerce or any part or parts thereof.
Approved, September 26, 1914.