Establishment of the Federal Trade Commission (FTC) - September 26, 1914

On September 26, 1914, the Federal Trade Commission (FTC) was officially established in the United States as a result of the Federal Trade Commission Act. This pivotal moment in American history marked a significant step towards addressing and regulating unfair business practices and enhancing consumer protection.

Background

The early 20th century in the United States was a period marked by rapid industrial growth and the emergence of powerful monopolies and trusts. These large conglomerates often engaged in unfair trade practices that stifled competition. Public sentiment grew against these monopolies, leading to political pressures for reform and regulation.

President Woodrow Wilson, pushing forward his “New Freedom” agenda aimed at business reform, advocated for the creation of a federal body to regulate such anti-competitive practices. The culmination of these efforts was the Federal Trade Commission Act of 1914.

The Federal Trade Commission Act of 1914

The Federal Trade Commission Act was signed into law by President Wilson on September 26, 1914. The act aimed to:

• Prevent unfair methods of competition and deceptive acts or practices in or affecting commerce.
• Empower the FTC with the authority to investigate and intervene in business practices that were deemed unfair or anti-competitive.
• Ensure the promotion of fair trade practices for the benefit of consumers and the economy.

The Commission

The FTC was established as an independent agency composed of five Commissioners, nominated by the President and confirmed by the Senate, serving staggered seven-year terms. The structure intended to insulate it from undue political pressures and ensure its role as a watchdog over business practices.

Impact and Significance

The creation of the FTC was a landmark in the regulation of commerce in the United States. It allowed for a systematic approach to tackling monopolistic behavior and protecting consumer rights. Over the years, the role of the FTC has expanded to include consumer protection initiatives, antitrust enforcement, and advocacy for consumer rights in various sectors.

The establishment of the FTC provided a framework that has shaped U.S. commerce by advocating for competitive markets and serving as a crucial safeguard against fraudulent and deceptive businesses. Its impact continues to be felt in its ongoing mission to protect both consumers and legitimate business practices across the nation.