What was the origin and purpose of the Federal Trade Commission?

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rrteacher | College Teacher | (Level 2) Educator Emeritus

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The Federal Trade Commission was established by Congress in 1914 at the urging of President Woodrow Wilson. Its purpose was to give teeth to antitrust regulations, which had existed but had been very  sporadically enforced. Monopolistic business practices were a major target of Progressive reformers, and indeed tightly regulating trusts and other monopolies was a major issue in the Presidential election of 1912. Wilson hoped the FTC would enforce the Sherman Antitrust Act, which outlawed some types of monopolies that involved interstate commerce. The FTC was established shortly before additional legislation, the Clayton Antitrust Act, was established to assist it in its mission. Previously, the courts and the executive alone had been left to determine the legality of monopolies, and while progress was made by both presidents Roosevelt (the "trust-buster") and Taft, Wilson's aim was to establish an enduring state apparatus to regulate and enforce fair trade.

Structurally, the FTC was composed of five commissioners appointed by the President, with one serving as chairman of the commission. Its current mission has expanded dramatically since the days of its inception, and includes regulating truth in advertising, fighting internet fraud, and ensuring truth-in-lending disclosures take place. It was empowered to extend its mission to protecting consumers during the New Deal of the 1930s. Its original purpose, aimed at promoting competition in American business, remains, however.

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