FTC's Claim of Substantive Rule-Making Power: A Study in Opposition
![handle is hein.journals/gwlr41 and id is 342 raw text is: THE FTC'S CLAIM OF SUBSTANTIVE RULE-MAKING
POWER: A STUDY IN OPPOSITION
The Federal Trade Commission (FTC) was established in 1914 by the
Federal Trade Commission Act (FTCA),1 for the purpose of promot-
ing competition and discouraging the growth of business monopo-
lies. Section 5(a) of the FTCA declares generally that all unfair
methods of competition in commerce, and unfair or deceptive acts or
practices in commerce, are unlawful, and empowers the FTC to pre-
vent persons, partnerships, or corporations .. from using .. unfair
or deceptive acts .... .2 Section 5(b) delineates a quasi-judicial3
method of enforcement, which authorizes the FTC to issue and serve
a complaint upon any person, partnership, or corporation whenever
the Commission shall have reason to believe that the recipient of the
complaint has been using unfair or deceptive methods of competition
or unfair or deceptive acts in commerce. In addition, this section
provides for notice of a hearing and the right of the person served to
appear and show cause why a cease and desist order should not be
issued. If the Commission finds a violation of the FTCA, it must is-
sue the order.4 To complement these enforcement provisions, section
1. 15 U.S.C. § 41 (1970).
2. Id. § 45 (a) (1). The provisions read in pertinent part:
(a) (1) Unfair methods of competition in commerce, and unfair or
deceptive acts or practices in commerce, are declared unlawful..
(6) The Commission is empowered and directed to prevent persons,
partnerships, or corporations, except banks, 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, partner-
ships, 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 commerce
and unfair or deceptive acts or practices in commerce.
Id. § 45 (a) (1), (6).
3. See note 42 infra.
4. 15 U.S.C. § 45(b) (1970). The section provides that
[w]henever the Commission shall have reason to believe that any
such person, partnership, or corporation has been or is using any un-
fair method of competition or unfair or deceptive act or practice in
commerce, and if it shall appear to the Commission that a proceed-
ing 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
December 1972 Vol. 41 No. 2](ViewImageLocal?handle=hein.journals/gwlr41&div=18&collection=&method=preview&ext=.png&size=3)
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FTC's Claim of Substantive Rule-Making Power: A Study in Opposition
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