Business Glossary

organization created by the Federal Trade Commission Act in 1914. It is responsible for thwarting "unfair methods of competition" and preventing monopolies and activities in restraint of trade. It also investigates cases of industrial espionage, bribery for the purpose of obtaining trade secrets or gaining business, and boycotts.

public concern over the rights of consumers, the quality of consumer goods, and the honesty of advertising. The ideology came into full focus in the 1960s after President John F. Kennedy introduced the Consumer Bill of Rights, which stated that the consuming public has a right to be safe, to be informed, to choose, and to be heard. The primary concern of this force is to fulfill and protect the rights of consumers articulated by President Kennedy more than three decades ago.

also called the Consumer Credit Protection Act, legislation enacted in 1968 requiring money lenders to be explicit about the true costs of credit transactions. The Truth-in- Lending Act outlaws the use of threatened or actual violence to collect debts and restricts the amount of garnishments. The act also established a National Commission on Consumer Finance.

independent federal regulatory agency, established in 1972 by the federal Consumer Product Safety Act, charged with reducing unreasonable risks of injury associated with consumer products. The commission establishes rules and guidelines for manufacturers and helps consumers identify safety risks. The commission was intended to compensate for previous legislation that provided for federal action only after an injury had occurred. The CPSC tracks injury statistics in order to identify products that require mandatory safety rules, such as the use of flame-retardant fabric in children's sleepwear, or nonmandatory guidelines, such as those concerning playground surfacing. The five-person commission may be contacted by writing to the U.S. Consumer Product Safety Commission, Washington, DC 20207. Commissioners are appointed by the president with the advice and consent of the Senate.

1938 amendment to the Federal Trade Commission act that authorized the FTC to restrict unfair or deceptive acts; also called the advertising act. Until this amendment was passed, the FTC could only restrict practices that were unfair to competitors. This broadened the FTC's powers to include protection for consumers from false advertising practices.

administrative agency of the U.S. Department of Health and Human Services that regulates the safety and quality of foodstuffs, pharmaceuticals, cosmetics, and medical devices.

legislation, passed in 1890, after a series of major corporate mergers. It outlaws any form of monopoly. It also outlaws acts or contracts to create monopoly and any attempt to acquire monopoly power.

1914 federal consumer protection legislation that prohibits certain monopolistic practices and other impediments to free market competition, including price discrimination, mergers that may lessen competition, tying agreements and exclusive dealings. The Clayton Act also holds corporate officials personally liable for damages resulting from activities in violation of the Act's rulings. The Clayton Act was designed to be more effective in preventing threats or potential threats to competition than the 1890 Sherman Antitrust Act. The Sherman Act does not come into play until after a violation is committed and has impeded competition. The Clayton Act is enforced by the Federal Trade Commission in conjunction with the Department of Justice.