What is an unfair or deceptive act under the FTC Act?

What the Law Says

The Federal Trade Commission Act (FTC Act) prohibits unfair or deceptive acts or practices in or affecting commerce. The law empowers the FTC to prevent such conduct but does not define every prohibited act — instead, it sets broad standards interpreted through enforcement and case law.

Under 15 U.S.C. § 45(a)(1), 'Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.' This is the core prohibition.

For an act to be 'deceptive,' it must involve a material representation, omission, or practice likely to mislead a reasonable consumer. Materiality means the information would affect a consumer’s decision — for example, price, safety, or performance.

An act is 'unfair' if it causes or is likely to cause substantial injury to consumers that is not reasonably avoidable by consumers themselves and is not outweighed by countervailing benefits to consumers or competition.

Statutory Text

Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.

— 15 U.S.C. § 45(a)(1) — Unfair methods of competition unlawful; prevention by Commission

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