What can the FTC do if a company engages in unfair business practices?

What the Law Says

The Federal Trade Commission Act gives the FTC broad authority to stop unfair or deceptive acts or practices in or affecting commerce.

Under 15 U.S.C. § 45, it is unlawful for any person, partnership, or corporation to use 'unfair methods of competition' or 'unfair or deceptive acts or practices' in or affecting commerce.

The FTC may initiate administrative proceedings to issue a cease-and-desist order if it has reason to believe a violation has occurred. If the respondent fails to comply, the FTC may sue in federal court to enforce the order.

The law also authorizes the FTC to seek civil penalties for violations of final orders — up to $43,792 per violation (as adjusted for inflation), with a 20-year statute of limitations for penalty actions.

In addition, the FTC may file lawsuits directly in federal court to obtain temporary restraining orders, preliminary or permanent injunctions, and monetary relief including refunds or compensation to harmed consumers.

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

Statutory Text

The Commission may commence a proceeding to determine whether a person, partnership, or corporation has been or is using any unfair method of competition or unfair or deceptive act or practice...

— 15 U.S.C. § 45(b) — Proceedings to prevent unfair methods of competition and unfair or deceptive acts or practices

Statutory Text

Any person, partnership, or corporation who violates an order of the Commission ... shall forfeit and pay to the United States a civil penalty of not more than $43,792 for each violation.

— 15 U.S.C. § 45(m)(1)(A) — Violation of order

What to Do

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