FTC Chairman Addresses OECD on Intersection of Competition and Consumer Protection Issues

Federal Trade Commission Chairman Timothy J. Muris and Commissioner Mozelle W. Thompson yesterday met with members of the Organisation for Economic Cooperation and Development (OECD) in Paris, France to discuss the intersection of competition and consumer protection issues. Yesterday’s meeting was the first joint meeting of the OECD’s Competition Committee and Committee on Consumer Policy. Commissioner Thompson is the Chair of the OECD’s Committee on Consumer Policy.

Chairman Muris discussed the intersection of competition and consumer protection issues, citing price advertising and the globalization of markets as two practical examples of this intersection. He concluded that the OECD and national regulatory agencies must continue to work together to develop international consumer protection policies to shield consumers from fraud and encourage global competition.

Muris first explained that competition policy and consumer protection policy together enhance consumer welfare by fostering a vigorous, competitive marketplace that gives consumers greater choice and leads to greater availability of quality products at competitive prices. “While competition policy encourages new market entrants and drives them to fulfill promises concerning price and quality,” Muris said, “consumer protection policy deters fraud and deception and maximizes incentives for honest sellers to make credible claims about their products. Consumers are willing to participate in the marketplace only if they are confident that the marketplace is safe.”

Muris then discussed two examples of the intersection between competition and consumer protection policy – price advertising and the globalization of markets. Muris explained that truthful price advertising benefits both competition and consumers by giving consumers bargaining power and allowing them to shop around for the lowest prices, which in turn encourages firms to compete for consumers.

Muris said that globalization – including the emergence of new technologies, especially global communication systems – has increased consumer choice through cross-border commerce, but also has increased fraudulent and deceptive business practices across borders. He encouraged OECD members to continue working together to develop international consumer protection policies, emphasizing the importance of the international convergence of consumer protection rules. These policies, Muris said, will protect consumers from fraud and encourage robust competition on a global level.

Muris stated that greater cooperation and information sharing, increased enforcement cooperation, more bilateral agreements, and more multilateral initiatives are all tools the OECD and its member nations’ agencies can use to combat cross-border fraud. He said that the recently announced OECD Guidelines on Protecting Consumers from Fraudulent and Deceptive Practices Across Borders are a prominent example of an effective, multinational initiative in this area. These Guidelines, drafted by the OECD Committee on Consumer Policy under Commissioner Thompson’s leadership, set forth an international consensus on the need for better enforcement against cross-border fraud, and established a framework for combating such fraud. Muris explained that the FTC has begun to implement the OECD Guidelines in the United States, and has proposed legislation to Congress that would improve the FTC’s ability to share information and cooperate with its counterparts abroad.

“Consumer protection and competition issues increasingly intersect in today’s global marketplace,” said Commissioner Thompson. “I am pleased to chair this first-ever joint committeee meeting. I look forward to exploring opportunities for both committees to work together in the future.”

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Jennifer Schwartzman
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