Statement of FTC Chairman Timothy J. Muris

A press report indicates that Senator Ernest F. Hollings of the Senate Appropriations Committee is considering suspending funding for the salaries of all of the Commissioners and the senior staff of the Federal Trade Commission. Although this step would not affect the salaries of the vast majority of employees at the FTC, it essentially would eliminate the Commission's ability to enforce the laws under its jurisdiction.

If Senator Hollings were to succeed in eliminating the Commissioners' salaries, the agency would have no legal authority to move forward with its responsibilities, including its rulemaking, investigative, and law enforcement functions. Thus, the Commission would no longer be able to:

• Take action to stop fraudulent telemarketing schemes that cost consumers millions of dollars each year;
• Consider implementing a national do-not-call registry by which consumers could sign up on one list to avoid most telemarketing calls;
• Halt the deceptive advertising of health-related products that pose serious risks to consumers;
• Protect children and adults from deceptive and unfair online practices, including those that trap users at pornographic and gambling sites;
• Implement the aggressive consumer privacy agenda announced in October 2001, including a 50 percent increase in the FTC resources devoted to protecting consumer privacy;
• Combat predatory lending practices that target vulnerable consumers, including elderly and minority borrowers;
• Attack unlawful practices by pharmaceutical companies that raise drug prices to consumers; and
• Scrutinize proposed mergers and move to block transactions that would harm consumers.

Since my arrival in June, 2001, the FTC has demonstrated its commitment to protecting consumers by:

• Obtaining orders in more than 100 consumer protection cases challenging a variety of practices, including Internet fraud, fraudulent billing, and deceptive national advertising;
• Securing orders of almost $125 million in consumer redress in these cases;
• Announcing a major settlement in a predatory lending case under which consumers may receive as much as an additional $60 million in redress;
• Protecting consumers from bogus or ineffective bioterrorism products that sprang up after September 11 by taking action to prevent the false or deceptive marketing of herbal remedies for anthrax, air filters, gas masks, and do-it-yourself kits to test mail for anthrax;
• Launching a crackdown on deceptive junk e-mail, or "spam"; and
• Fielding thousands of consumer calls each week to the agency's toll-free consumer complaint line (1-877-FTC-Help), including its special ID Theft Hotline which currently receives 3,000 calls per week.

Similarly, the Commission aggressively has pursued its competition mission under my leadership by:

• Maintaining a level of merger enforcement activity comparable to that found during the preceding five fiscal years, despite a significant decrease in merger activity;
• Initiating 46 nonmerger investigations within 10 months of my arrival in June 2001, greater than the annual count for each of the fiscal years from 1997 through 2000;
• Targeting schemes that raise health care costs for consumers, including obtaining a consent in a price-fixing scheme among doctors in California and investigating actions by brand-name pharmaceutical companies to delay the entry of generic drugs into the marketplace; and
• Monitoring gas prices in 360 cities throughout the United States to identify potential instances of anticompetitive conduct that would raise gas prices for consumers.

I am surprised that Senator Hollings, being such a strong advocate of consumer protection, would consider a measure that would virtually eliminate the FTC's ability to protect consumers.

The press report referenced above is at http://www.ftc.gov/opa/2002/04/adagenews.pdf.

Supporting documents related to the FTC/DOJ clearance agreement can be found at http://www.ftc.gov/opa/2002/04/clearanceoverview.htm.