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Week 6: Federal Trade Commission

The Federal Trade Commission (FTC) is a regulatory agency created un 1914 in the US

with the aim of enforcing consumer protection laws. It was also created to guarantee favorable

competition within the market domain. Entrepreneurs need to be educated om the FTC practices

since the former has legal and ethical obligations to consumers. Furthermore, business owners

must also have the background knowledge of FTC’s laws to avoid engaging in deceptive

practices, which have the potential of negatively affecting their business’ reputation (Ward,

2022). Failing to comply with the FTC regulations may lead to serious legal and financial

repercussions for business owners. Deceptive advertising is one section of FTC that is known for

misleading customers by making incorrect claims regarding a product or service. A perfect

example of deceptive advertising is when a firm claims that the drug they offer can cure a disease

without any scientific proof. Under the deceptive advertising section of FTC, one of the main

consequences is that the commission may order the firm to cease using misleading adverts. The

company may also receive hefty fines and subsequent monitoring to ensure they do not practice

deceptive advertising. In instances whereby the company does not comply with any of the FTC

orders, it may be subjected to further legal actions and fines.

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Reference

Ward, P. C. (2022). Federal trade commission: Law, practice and procedure. Law Journal Press.

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