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8000 - Miscellaneous Statutes and Regulations
{{2-29-08 p.8551}}
FEDERAL TRADE COMMISSION ACT
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 House of Representatives of
the United States of America in Congress assembled,
* * * * *
SEC. 5. (a)(1) Unfair methods of competition in or affecting
commerce, and unfair or deceptive acts or practices in or affecting
commerce, are hereby declared unlawful.
(2) The Commission is hereby empowered and directed to prevent
persons, partnerships, or corporations, except banks, savings and loan
institutions described in section 18 (f)(3), Federal credit unions
described in section 18(f)(4),
common carriers subject to the Acts to regulate commerce, air carriers
and foreign air carriers subject to the Federal Aviation Act of 1958,
and persons, partnerships, or corporations insofar as they are subject
to the Packers and Stockyards Act, 1921, as amended, except as provided
in section 406(b) of said Act, from using unfair methods of competition
in or affecting commerce and unfair or deceptive acts or practices in
or affecting commerce.
(3) This subsection shall not apply to unfair methods of
competition involving commerce with foreign nations (other than import
commerce) unless--
(A) such methods of competition have a direct, substantial, and
reasonably foreseeable effect--
(i) on commerce which is not commerce with foreign nations, or on
import commerce with foreign nations; or
(ii) on export commerce with foreign nations, of a person engaged
in such commerce in the United States; and
(B) such effect gives rise to a claim under the provisions of
this subsection, other than this paragraph.
If this subsection applies to such methods of competition only
because of the operation of subparagraph (A)(ii), this subsection shall
apply to such conduct only for injury to export business in the United
States.
(4)(A) For purposes of subsection (a), the term "unfair or
deceptive acts or practices" includes such acts or practices
involving foreign commerce that--
(i) cause or are likely to cause reasonably foreseeable injury
within the United States; or
(ii) involve material conduct occurring within the United States.
(B) All remedies available to the Commission with respect to
unfair and deceptive acts or practices shall be available for acts and
practices described in this paragraph, including restitution to
domestic or foreign victims.
(b) 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 or unfair or deceptive act or practice in
or affecting commerce, and if it shall appear to the Commission that a
proceeding by it in respect thereof would be to the 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 at 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 appear 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 by
counsel or in person. The testimony in any such proceeding shall be
reduced to writing and filed in the office of the Commission. If
upon
{{2-29-08 p.8552}}such hearing the
Commission shall be of the opinion that the method of competition or
the act or practice 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 or such act or practice. Until the expiration of the
time allowed for filing a petition for review, if no such petition has
been duly filed within such time, or, if a petition for review has been
filed within such time then until the record in the proceeding has been
filed in a 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.
After the expiration of the time allowed for filing a petition for
review, if no such petition has been duly filed within such time, the
Commission may at any time, after notice and opportunity for hearing,
reopen and alter, modify, or set aside, in whole or in part, any report
or order made or issued by it under this section, whenever in the
opinion of the Commission conditions of fact or of law have so changed
as to require such action or if the public interest shall so
require, except that (1) the said person, partnership, or corporation
may, within sixty days after service upon him or it of said report
or order entered after such a reopening, obtain a review thereof in the
appropriate circuit court of appeals of the United States, in the
manner provided in subsection (c) of this section; and (2) in the case
of an order, the Commission shall reopen any such order to consider
whether such order (including any affirmative relief provision
contained in such order) should be altered, modified, or set aside, in
whole or in part, if the person, partnership, or corporation involved
files a request with the Commission which makes a satisfactory showing
that changed conditions of law or fact require such order to be
altered, modified, or set aside, in whole or in part. The Commission
shall determine whether to alter, modify, or set aside any order of the
Commission in response to a request made by a person, partnership, or
corporation under paragraph (2) not later than 120 days after the date
of the filing of such request.
(c) Any person, partnership, or corporation required by an order of
the Commission to cease and desist from using any method of competition
or act or practice may obtain a review of such order in the circuit
court of appeals of the United States, within any circuit where the
method of competition or the act or practice in question was used or
where such person, partnership, or corporation resides or carries on
business, by filing in the court, within sixty days from the date of
the service of such order, a written petition praying that the order of
the Commission be set aside. A copy of such petition shall be forthwith
transmitted by the clerk of the court to the Commission, and thereupon
the Commission shall file in the court the record in the proceeding, as
provided in section 2112 of title 28, United States Code. Upon such
filing of the petition the court shall have jurisdiction of the
proceeding and of the question determined therein concurrently with the
Commission until the filing of the record and shall have power to make
and enter a decree affirming, modifying, or setting aside the order of
the Commission, and enforcing the same to the extent that such order is
affirmed and to issue such writs as are ancillary to its jurisdiction
or are necessary in its judgment to prevent injury to the public or to
competitors pendente lite. The findings of the Commission as to the
facts, if supported by evidence, shall be conclusive. To the extent
that the order of the Commission is affirmed, the court shall thereupon
issue its own order commanding obedience to the terms of such order of
the Commission. 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 were
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 to the
court may seem 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 evidence, 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
{{2-29-08 p.8553}}the court shall be
final, except that the same shall be subject to review by the Supreme
Court upon certiorari, as provided in section 240 of the Judicial Code.
(d) Upon the filing of the record with it the jurisdiction of the
court of appeals of the United States to affirm, enforce, modify, or
set aside orders of the Commission shall be exclusive.
(e) No order of the Commission or judgment of court to enforce the
same shall in anywise relieve or absolve any person, partnership, or
corporation from any liability under the Antitrust Acts.
(f) 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 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 residence or the
principal office or place of business of such person, partnership, or
corporation; or (c) by mailing a copy thereof by registered mail or by
certified mail addressed to such person, partnership, or corporation at
his or its residence or 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 mailed by registered mail or by certified mail
as aforesaid shall be proof of the service of the same.
(g) An order of the Commission to cease and desist shall become
final--
(1) Upon the expiration of the time allowed for filing a petition
for review, if no such petition has been duly filed within such time;
but the Commission may thereafter modify or set aside its order to the
extent provided in the last sentence of subsection (b).
(2) Except as to any order provision subject to paragraph (4),
upon the sixtieth day after such order is served, if a petition for
review has been duly filed; except that any such order may be stayed,
in whole or in part and subject to such conditions as may be
appropriate, by--
(A) the Commission,
(B) an appropriate court of appeals of the United States, if (i)
a petition for review of such order is pending in such court, and (ii)
an application for such a stay was previously submitted to the
Commission and the Commission, within the 30-day period beginning on
the date the application was received by the Commission, either denied
the application or did not grant or deny the application; or--
(C) the Supreme Court, if an applicable petition for certiorari
is pending.
(3) For purposes of subsection (m)(1)(B) and of section 19(a)(2),
if a petition for review of the order of the Commission has been
filed--
(A) upon the expiration of the time allowed for filing a petition
for certiorari, if the order of the Commission has been affirmed or the
petition for review has been dismissed by the court of appeals and no
petition for certiorari has been duly filed;
(B) upon the denial of a petition for certiorari, if the order of
the Commission has been affirmed or the petition for review has been
dismissed by the court of appeals; or
(C) upon the expiration of 30 days from the date of issuance of a
mandate of the Supreme Court directing that the order of the Commission
be affirmed or the petition for review be dismissed.
(4) In the case of an order provision requiring a person,
partnership, or corporation to divest itself of stock, other share
capital, or assets, if a petition for review of such order of the
Commission has been filed--
(A) upon the expiration of the time allowed for filing a petition
for certiorari, if the order of the Commission has been affirmed or the
petition for review has been dismissed by the court of appeals and no
petition for certiorari has been duly filed;
(B) upon the denial of a petition for certiorari, if the order of
the Commission has been affirmed or the petition for review has been
dismissed by the court of appeals; or
(C) upon the expiration of 30 days from the date of issuance of a
mandate of the Supreme Court directing that the order of the Commission
be affirmed or the petition for review be dismissed.
(h) If the Supreme Court directs that the order of the Commission
be modified or set aside, the order of the Commission rendered in
accordance with the mandate of the Supreme Court shall become final
upon the expiration of thirty days from the time it was
{{2-29-08 p.8554}}rendered, unless
within such thirty days either party has instituted proceedings to have
such order corrected to accord with the mandate, in which event the
order of the Commission shall become final when so corrected.
(i) If the order of the Commission is modified or set aside by the
circuit court of appeals, and if (1) the time allowed for filing a
petition for certiorari has expired and no such petition has been duly
filed, or (2) the petition for certiorari has been denied, or (3) the
decision of the court has been affirmed by the Supreme Court, then the
order of the Commission rendered in accordance with the mandate of the
circuit court of appeals shall become final on the expiration of thirty
days from the time such order of the Commission was rendered, unless
within such thirty days either party has instituted proceedings to have
such order corrected so that it will accord with the mandate, in which
event the order of the Commission shall become final when so corrected.
(j) If the Supreme Court orders a rehearing; or if the case is
remanded by the circuit court of appeals to the Commission for a
rehearing, and if (1) the time allowed for filing a petition for
certiorari has expired, and no such petition has been duly filed, or
(2) the petition for certiorari has been denied, or (3) the decision of
the court has been affirmed by the Supreme Court, then the order of the
Commission rendered upon such rehearing shall become final in the same
manner as though no prior order of the Commission had been rendered.
(k) As used in this section the term "mandate", in case a
mandate has been recalled prior to the expiration of thirty days from
the date of issuance thereof, means the final mandate.
(l) Any person, partnership, or
corporation who violates an order of the Commission after it has become
final, and while such order is in effect, shall forfeit and pay to the
United States a civil penalty of not more than $10,000 for each
violation, which shall accrue to the United States and may be recovered
in a civil action brought by the Attorney General of the United States.
Each separate violation of such an order shall be a separate offense,
except that in the case of a violation through continuing failure to
obey or neglect to obey a final order of the Commission, each day of
continuance of such failure or neglect shall be deemed a separate
offense. In such actions, the United States district courts are
empowered to grant mandatory injunctions and such other and further
equitable relief as they deem appropriate in the enforcement of such
final orders of the Commission.
(m)(1)(A) The Commission may commence a civil action to recover a
civil penalty in a district court of the United States against any
person, partnership, or corporation which violates any rule under this
Act respecting unfair or deceptive acts or practices (other than an
interpretive rule or a rule violation of which the Commission has
provided is not an unfair or deceptive act or practice in violation of
subsection (a)(1) with actual knowledge or knowledge fairly implied on
the basis of objective circumstances that such act is unfair or
deceptive and is prohibited by such rule. In such action, such person,
partnership, or corporation shall be liable for a civil penalty of not
more than $10,000 for each violation.
(B) If the Commission determines in a proceeding under subsection
(b) that any act or practice is unfair or deceptive, and issues a final
cease and desist order with respect to such act or practice, then the
Commission may commence a civil action to obtain a civil penalty in a
district court of the United States against any person, partnership, or
corporation which engages in such act or practice--
(1) after such cease and desist order, other than a consent
order, becomes final (whether or not such person, partnership, or
corporation was subject to such cease and desist order), and
(2) with actual knowledge that such act or practice is unfair or
deceptive and is unlawful under subsection (a)(1) of this section.
In such action, such person, partnership, or corporation shall be
liable for a civil penalty of not more than $10,000 for each violation.
(C) In the case of a violation through continuing failure to
comply with a rule or with section 5(a)(1), each day of continuance of
such failure shall be treated as a separate violation, for purposes of
subparagraphs (A) and (B). In determining the amount of such a civil
penalty, the court shall take into account the degree of culpability,
any history of prior such conduct, ability to pay, effect on ability to
continue to do business, and such other matters as justice may
require.
{{2-29-08 p.8554.01}}
(2) If the cease and desist order establishing that the act or
practice is unfair or deceptive was not issued against the defendant in
a civil penalty action under paragraph (1)(B) the issues of fact in
such action against such defendant shall be tried de novo.
Upon request of any party to such an action against such defendant,
the court shall also review the determination of law made by the
Commission in the proceeding under subsection (b) that the act or
practice which was the subject of such proceeding constituted an unfair
or deceptive act or practice in violation of subsection (a).
(3) The Commission may compromise or settle any action for a
civil penalty if such compromise or settlement is accompanied by a
public statement of its reasons and is approved by the court.
(n) The Commission shall have no authority under this section or
section 18 to declare unlawful an act or practice on the grounds that
such act or practice is unfair unless the act or practice causes or is
likely to cause substantial injury to consumers which is not reasonably
avoidable by consumers themselves and not outweighed by countervailing
benefits to consumers or to competition. In determining whether an act
or practice is unfair, the Commission may consider established public
policies as evidence to be considered with all other evidence. Such
public policy considerations may not serve as a primary basis for such
determination.
[Codified to 15 U.S.C. 45]
[Source: Section 5 of the Act of September 25, 1914 (Pub. L. No.
203; 38 Stat. 719), effective September 25, 1914; section 3 of the Act
of March 21, 1938 (Pub. L. No. 447; 52 Stat. 111), effective March 21,
1938; section 4(c) of the Act of March 16, 1950 (Pub. L. No. 459; 64
Stat. 21), effective July 1, 1950; section 2 of the Act of July 14,
1952 (Pub. L. No. 542; 66 Stat. 631), effective July 14, 1952; section
1411 of title XIV of the Act of August 23, 1958 (Pub. L. No. 85-726; 72
Stat. 809), effective December 30, 1958; section 3 of the Act of August
28, 1958 (Pub. L. No. 85-791; 72 Stat. 942), effective August 28, 1958;
section 4 of the Act of September 2, 1958 (Pub. L. No. 85-909; 72 Stat.
1750), effective September 2, 1958; section 1(13) of the Act of June
11, 1960 (Pub. L. No. 86-507; 74 Stat. 200), effective June 11, 1960;
section 408(c) and (d) of the Act of November 16, 1973 (Pub. L. No.
93-153; 87 Stat. 591), effective November 16, 1973; sections 201(a),
204(b), and 205(a) of title II of the Act of January 4, 1975 (Pub. L.
No. 93-637; 88 Stat. 2193, 2200), effective January 4, 1975; section 3
of the Act of December 12, 1975 (Pub L. No. 94-145; 89 Stat. 801),
effective March 10, 1976; the Act of July 23, 1979 (Pub. L. No. 96-37;
93 Stat. 95), effective July 23, 1979; section 2 of the Act of May 28,
1980 (Pub. L. No. 96-252; 94 Stat. 374), effective May 28, 1980;
section 402 of title IV of the Act of November 11, 1984 (Pub. L. No.
98-620; 98 Stat. 3358), effective November 8, 1984; section 403 of
title V of the Act of October 8, 1982 (Pub. L. No. 97--290; 96 Stat.
1246); section 715(a) of title VII of the Act of August 10, 1987 (Pub.
L. No. 100-86; 101 Stat. 655), effective August 10, 1987; sections
4(a), 4(b), 6(a), 6(b), 6(c), and 6(d) of the Act of August 26, 1994
(Pub. L. No. 103--312; 108 Stat. 1691, 1692, 1693, and 1695,
respectively), effective August 26, 1994; section 3 of the Act of
December 22, 2006 (Pub. L. No. 109--455; 120 Stat. 3372), effective
December 22, 2006]
NOTES
Effective date of section 5(m). Section 205(b) of title II of
the Act of January 4, 1975 (Pub. L. No. 93-637; 88 Stat. 2201), states
that section 5(m) of the Federal Trade Commission Act shall not apply
to any violation, act, or practice to the extent that such violation,
act, or practice occurred before the date of enactment of this Act
[January 4, 1975].
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