Section 5(a) of the FTC Act Provides That "Unfair or Deceptive

question 81

Essay

Section 5(a) of the FTC Act provides that "unfair or deceptive acts or practices in or affecting commerce are declared unlawful" (15 U.S.C. § 45(a)
(1)). The statute empowers the Federal Trade Commission (FTC) to regulate deceptive advertising. After a complaint is filed, the FTC will investigate and if meritorious, an administrative judge will issue a ruling after the presentation of evidence by both sides (FTC and the accused party in the dispute). The losing party can appeal to the Commission, which would conduct another proceeding. The losing party before the FTC can appeal to a federal appeals court, and ultimately to the U.S. Supreme Court. Remedies for violations include:​

Consent Decree (merchant consents to stop)
Cease and desist order (FTC orders the merchant to stop)
Fines (merchant pays government for the violation)
Corrective Advertising (merchant re-educates consuming public on what is actually the truth)

Read about these two recently settled cases: http://www.ftc.gov/opa/2011/05/oreck.shtm ; http://www.ftc.gov/opa/2010/10/dmc.shtm .  What type of evidence would the administrative law judge or the Commission need to adjudicate whether or not the claims were false and misleading?

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Definitions:

Semipermeable Membrane

A membrane that allows the passage of certain small molecules or ions but blocks others.

Concentration Gradient

A variation in the concentration of a substance across a distance, often leading to the diffusion of substances from an area of higher concentration to an area of lower concentration.

Diffusion

Spontaneous spreading of molecules or atoms through a fluid or gas.

Indigestible Substances

Materials that cannot be broken down and absorbed by the digestive enzymes and system of an organism, often passing through the system largely unchanged.