Federal Trade Commission, Government

What is the primary role of the Federal Trade Commission?

Should the government be in the business of regulating the safety of all products sold to consumers? If not, how should the government determine which products to regulate? Car seats? Skateboards? Pencils? Textbooks? Dolls? As a taxpayer, are you willing to pay for all of this regulation?

What is deceptive advertising and what can the FTC require a business to do if the business is engaged in deceptive advertising?

Be sure to draft your answers in paragraph form, discussing each question thoroughly. You will also need to reply substantively to a classmates’ posting.

ANSWER

Federal Trade Commission

The primary role of the federal trade commission is to protect consumers from being exploited by sellers by being sold low-quality products, being exploited by being sold goods at extremely high prices, and being sold expired products. The FTC regulates the trade by outlining the deceptive and unfair practices in the marketplace. The FTC also enforces consumer protection laws (Chapter 18, slide 5). The proper functioning of economies and societies is dependent on regulations. Government regulations create the rules of the game for all the players. Government regulations ensure that the rights and safety of citizens are protected in the delivery of goods and services. Many businesses complain about government regulation, but it is important for the government to regulate businesses to protect competition. Without government regulations, there would be unfair competition in the market. Government regulation ensures that the consumer is protected and that they receive high-quality products in a competitive market. In a healthy competitive market, the competing businesses will improve the quality of their products and cut the prices to attract consumers.

According to the FTC, deceptive advertising involves advertising that fools consumers into buying a product or service. Deceptive advertising involves omitting some information or giving false information about a product (Chapter 18, Slide 7). False advertising can lead to the consumer buying a product or service that could end up harming them. A business involved in deceptive advertising is required to stop running the advertisement and to have substantiation for claims in future ads. They are also required to periodically report to the FTC staff about the substantiation they have for claims in new ads. They are also required to pay a fine for running the false ad.

References

Chapter 18. The legal and regulatory environment of business.