FEDERAL TRADE COMMISSION AND CONSUMER PROTECTION

• NCJ Number: 50717
• Author(s): T G KRATTENMAKER
• Date Published: 1976
• Length: 16 pages
• Corporate Author: University of California
• Publication Format: Article
• Language: English
• Country: United States of America
• Note: REPRINTED FROM CALIFORNIA MANAGEMENT REVIEW, V 18, N 4 (SUMMER 1976), P 89-104

Annotation

THE ROLE OF THE FEDERAL TRADE COMMISSION (FTC) IN THE FIELD OF CONSUMER PROTECTION IS EXAMINED FROM HISTORICAL AND ORGANIZATIONAL REFORM PERSPECTIVES.

Abstract

EMPHASIS IS PLACED ON MODIFICATIONS IN THE FTC'S HISTORICAL INTERNAL MODES OF OPERATION AND SELF-DEFINITION OF RESPONSIBILITIES THAT MOST LIKELY WILL PRODUCE AN INSTITUTION CAPABLE OF RESPONDING TO LEGITIMATE COMPLAINTS AND NEEDS OF CONSUMERS. IN THE ANALYTICAL SENSE, ANY OFFICAL ACTION DESIGNED TO PROMOTE AND PROTECT THE MARKET MECHANISM CAN BE CALLED A CONSUMER PROTECTION MEASURE. WHILE MANY GOVERNMENT POLICIES ENHANCE OR RETARD THE OPERATION OF THE MARKET SYSTEM, CONSUMER PROTECTION MEASURES ARE DEFINED AS GOVERNMENT EFFORTS THAT DIRECTLY PRESERVE THE POWER OF CONSUMERS TO ARTICULATE THEIR DESIRES WITHIN THE MARKETPLACE. THIS DEFINITION EXCLUDES SUCH POLICIES AS ANTITRUST ENFORCEMENT AND TARIFF REFORM THAT WILL BENEFIT CONSUMERS ONLY AFTER THE FURTHER OPERATION OF ADDITIONAL MARKET FORCES. THE FREE ENTERPRISE MODEL DISCLOSES THREE PRIMARY FACTORS NECESSITATING DIRECT INTERVENTION BY GOVERNMENT OFFICIALS ON BEHALF OF CONSUMERS: (1) THE MARKET MECHANISM WILL NOT WORK UNLESS CONSUMERS ARE FULLY INFORMED; (2) THE FREE MARKET MODEL IS BOTH THEORETICAL AND EGALITARIAN ASSUMING THAT PRODUCERS AND SELLERS WILL NOT ENJOY SUPERIOR BARGAINING ACUMEN RELATIVE TO POOR OR UNEDUCATED CONSUMERS; AND (3) EVEN IF CONSUMERS ARE FULLY INFORMED, IT IS SOMETIMES NECESSARY TO PLACE AN EXTERNAL FLOOR ON CERTAIN FORMS OF COMPETITIVE BEHAVIOR. THE HISTORICAL OVERVIEW OF THE FTC AND CONSUMER PROTECTION CONCERNS THE CREATION OF THE COMMISSION AND ITS STRUCTURE AND POWERS AND DISCUSSES THE COMMISSION'S FAILURES AND ACCOMPLISHMENTS. MEASURES TO REFORM THE FTC ORGANIZATIONALLY AND PROCEDURALLY INVOLVE: INCREASING PUBLIC PARTICIPATION IN THE COMMISSION'S WORK, REORGANIZING THE COMMISSION'S RESOURCES, AND RECOGNIZING THE COMMISSION AS A CONSUMER ADVOCATE. THE FTC SHOULD PLAY AN IMPORTANT ROLE IN POLICY PLANNING. REFERENCES ARE INCLUDED. (DEP)