FTC Positions Itself for the 21st Century

The five members of the Federal Trade Commission appeared today before a U.S. House of Representatives Subcommittee to testify on behalf of the FTC’s proposed reauthorization. Chairman Robert Pitofsky outlined the FTC’s agenda, emphasizing that the Commission is first and foremost a law enforcement agency that “exists to ensure consumers the benefit of a vigorously competitive marketplace.” Pitofsky discussed the Commission’s efforts to eliminate unnecessary business burdens, target limited enforcement resources at critical issues facing businesses and consumers today, and prepare for the future.

Commissioner Janet D. Steiger, who served as Chairman of the Commission from 1989- 1995 testified that “there is a solid bipartisan consensus at the Federal Trade Commission in support of a vigorous judicious program of law enforcement.” Steiger pointed to recent efforts of the Commission that have placed it “in a position of national leadership.” “For example,” she said, “we have implemented the Telemarketing Sales Rule and launched numerous sweeps-- together with federal, state, and local law enforcement allies--against telemarketing fraud, resulting in scores of cases involving thousands of consumer and business victims.”

Through its two different, but complementary missions, the FTC pursues its goal of promoting healthy competition in the marketplace, the Commissioners testified. Its consumer protection activities seek “to ensure that consumers receive accurate, not false or misleading information in the marketplace.” As to its antitrust enforcement, the Commission said: “[F]or consumers to have a choice of products and services at competitive prices and quality, the marketplace must be free from anticompetitive business practices.”

The testimony outlines the Commission’s highest priorities--fighting telemarketing fraud, preserving competition amid one of the largest merger waves in history, stopping deception and preserving competition in health care, saving tax dollars and preserving innovation in defense and high technology industries, and leveraging core law enforcement resources for the most consumer education and deterrent impact. The latter goal has been achieved as “cooperative efforts with state and local officials now characterize nearly every facet of the Commission’s work.... In addition to public sector cooperative efforts, the Commission has also worked closely with private sector groups to promote self-regulation and increase public dialogue about competition and consumer protection issues.” The Commission also noted in its testimony that it is “working to increase public dialogue through the use of informal, public workshops-- bringing together industry representatives, consumer groups, government agencies, academics, and other members of the public.” For example, the testimony notes that, “[t]his June the Commission staff utilized the workshop format to discuss privacy on the global information infrastructure, including privacy issues raised by the collection and distribution of medical and financial information, and marketing information collected from children.”

The FTC also believes that “[m]any cooperative efforts that have significant impact stem from joint projects to educate consumers and businesses.” The testimony points out that the “Commission distributes consumer information through both traditional and state-of-the-art methods. Over 4 million FTC print consumer publications were distributed last year.... These publications cover a range of current topics such as telemarketing fraud, price scanners, online scams, credit repair, and viatical settlements.... In addition, the agency’s Consumer Line provides online access to all of the Commission’s consumer and business educational publications.”

These activities are undertaken in an agency with approximately 950 full-time equivalent employees. The Commission pointed out that it “has been a leader over the past 15 years in demonstrating how government can do more with less. Each year consumers save an amount that far exceeds the Commission’s annual budget in the form of consumer redress, civil penalties, and competitive prices. In short, we believe consumers earn a significant return on their investment from the Commission’s law enforcement actions.”

In speaking of its plans for the future, the FTC pointed out that it “held hearings last fall on whether antitrust or consumer protection policies require any adjustments in light of increasingly global and innovation-based competition.” A two-volume staff report on the hearings was issued last June. It offered several recommendations some of which already have begun to be implemented.

The Commission vote to approve the testimony was 5-0.

Copies of the Commission’s testimony are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov