Federal Trade Commission

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U.S. Legislation
Enacted: 1914, amended multiple times
Summary: the Federal Trade Commission Act created a commission charged with
consumer protection and ensuring fair competition
Addresses: Fraud, Deception, Unfair Market Practices, Competition
Also addressed by ICANN Policy: N
Related to: Phishing, Pharming, Spam, Domain Slamming, Fake Renewal Notices,
Malware, CAN-SPAM Act, Cross-TLD Registration Scams, Botnets

The Federal Trade Commission Act or FTC Act was adopted in September of 1914.[1] President Wilson signed it into law to help implement anti-trust legislation.[2] This law created the Federal Trade Commission, a federal agency which today is responsible for the enforcement of over 70 Statutes, including the CAN-SPAM Act and the US SAFE WEB Act.[3] It acts as a consumer protection agency and ensures fair market competition.[3][4] The FTC also works with law enforcement, helps develop policies, gathers complaints, investigates alleged violations of its statutes, and assists international agencies with investigations.[4]


The FTC is charged specifically with enforcing its statues, but more broadly its mission is to:

  • "(a) prevent unfair methods of competition, and unfair or deceptive acts or practices in or affecting commerce;
  • (b) seek monetary redress and other relief for conduct injurious to consumers;
  • (c) prescribe trade regulation rules defining with specificity acts or practices that are unfair or deceptive, and establishing requirements designed to prevent such acts or practices;
  • (d) conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce; and
  • (e) make reports and legislative recommendations to Congress."[3]

The FTC & the Internet

The FTC investigates and enforces many laws regarding consumer safety and fair business practices online.


This act, passed in 2003 and updated in 2008,[5] outlines what legally differentiates spam from legal forms of bulk email solicitation, such as mailing lists. See CAN-SPAM Act for further details.

The Children's Online Privacy Protection Act

The Children's Online Privacy Protection Act (COPPA) limits the amount of personal information that websites and web-services can ask for or otherwise collect if the user is a child under the age of 13.[6] COPPA came into effect in 2000 although it was passed in 1998.[7] The act is designed to ensure "children's privacy by giving parents the tools to control what information is collected from their children online."[6]

Unlawful Internet Gambling Enforcement Act

This act addresses illicit Internet gambling by making it illegal for "any person engaged in the business of betting, as defined, from knowingly accepting credit, electronic fund transfers, checks, or any other payment involving a financial institution to settle unlawful internet gambling debts."[8] It was passed by Congress as part of the SAFE Port Act of 2006 and is unrelated to the rest of the bill.[9]


The Undertaking Spam, Spyware, and Fraud Enforcement with Enforcers Beyond Borders Act, or US SAFE WEB Act, which was initially passed in 2006, falls under the enforcement authority of the FTC.[3] This act basically empowered the FTC to cooperate more closely with international financial or law enforcement agencies when investigating suspected Internet crimes, such as fraud.[10] When the act was nearing its 2013 expiration date, the FTC testified before Congress, describing the effects and continuing necessity of the US SAFE WEB Act.[11] Their report asserted that the Internet allows many foreign scammers to take advantage of US consumers, stating that from 2006 to 2011 "almost half a million U.S. consumers (471,014) complained about transactions involving over $1.4 billion paid to businesses in other countries."[11] Additionally, in 2011 over 100,000 complaints were filed by US consumers against non-US businesses.[11] Therefore, the FTC argued, it was essential that Congress renew the bill and allow the FTC to continue to operate both nationally and internationally.[11] The act was renewed later in 2012.[12]

Common Internet Behaviors Addressed by the FTC

While not originally written with the Internet in mind, many harmful Internet practices fall within the broad scope of the FTC and its consumer protection mandates.[4]

  • Spam: the CAN-SPAM Act is one of Statutes enforced by the FTC.[3] As such, the FTC accepts spam complaints, especially in connection with scams, such as 419 Fraud.
    • File an FTC Spam Compliant
    • If Pharming sites (which often use fraud and can result in stolen identity information) use email spam to reach victims, the FTC can get involved.[13]
  • Phishing: this practice can also be addressed by the FTC's consumer protection mandate as it often involves fraud and identity theft.[14] Phishing attempts made over the phone or through email are also investigated by the FTC.[14]
  • Malware: because certain types of malware, such as spyware with key-logging functions, can be used to steal sensitive personal information and trick consumers, it can fall under the investigative authority of the FTC.[15]
    • File a Malware Complaint with the FTC's Complaint Assistant under the "Computer" section
  • Domain Slamming & Fake Renewal Notices: these practices involve sending notices through either email or postal mail with the intention of tricking the user into transferring a domain registration or paying an unnecessary fee. Frequently, in the notice a registrar pretends to be the one used by the registrant by asking for a renewal fee to stop the domain from expiring. However, it is actually a disguised transfer notice. The FTC has been involved in notable fake renewal cases before, including cases with the Domain Registry of America (DROA) and Verisign.[16][17]
  • Cross-TLD Registration Scams: these scams are similar to scams that use fake renewal notices, except that they use notices that attempt to get a registrant to register the same domain in a different TLD, at a higher rate, by "warning" that there is another interested buyer.[18] Because these scams use deceptive marketing practices and make false claims to consumers, they can be investigated by the FTC.
  • Botnets: the FTC has issued warnings regarding the spread and use of botnets.[19] In 2009, the FTC was also involved in an investigation that led to the shut down of a large "rogue internet service provider" that assisted in the creation and control of botnets.[20]

Additional Resources

Related Articles


  1. http://www.law.cornell.edu/uscode/text/15/41 Legal Information Institute, Cornell University Law School
  2. http://en.wikipedia.org/wiki/Federal_Trade_Commission Wikipedia
  3. 3.0 3.1 3.2 3.3 3.4 http://www.ftc.gov/enforcement/statutes Federal Trade Commission (FTC)
  4. 4.0 4.1 4.2 http://www.ftc.gov/about-ftc/what-we-do
  5. http://www.ftc.gov/news-events/press-releases/2008/05/ftc-approves-new-rule-provision-under-can-spam-act (May 12, 2008), Federal Trade Commission (FTC)
  6. 6.0 6.1 http://www.ftc.gov/enforcement/statutes/childrens-online-privacy-protection-act The Children's Online Privacy Act, Federal Trade Commission (FTC)
  7. http://en.wikipedia.org/wiki/Children%27s_Online_Privacy_Protection_Act Wikipedia
  8. http://www.ftc.gov/enforcement/statutes/unlawful-internet-gambling-enforcement-act Unlawful Internet Gambling Enforcement Act, Federal Trade Commission (FTC)
  9. http://en.wikipedia.org/wiki/SAFE_Port_Act Wikipedia
  10. http://www.ftc.gov/sites/default/files/documents/reports/us-safe-web-act-protecting-consumers-spam-spyware-and-fraud-legislative-recommendation-congress/summary-us-safe-web-act.pdf (PDF), Federal Trade Commission (FTC)
  11. 11.0 11.1 11.2 11.3 http://www.ftc.gov/news-events/press-releases/2012/07/ftc-urges-congress-reauthorize-safe-web-act FTC Urges Congress to Reauthorize SAFE WEB Act (July 12, 2012), Federal Trade Commission (FTC)
  12. http://thehill.com/blogs/hillicon-valley/technology/268285-senate-approves-re-authorization-of-safe-web-act Senate approves reauthorization of Safe Web Act By Jennifer Martinez (November 15, 2012), The Hill
  13. http://answers.usa.gov/system/templates/selfservice/USAGov/#!portal/1012/article/4415/Pharming USA.gov
  14. 14.0 14.1 http://www.consumer.ftc.gov/articles/0003-phishing Federal Trade Commission (FTC)
  15. http://www.consumer.ftc.gov/articles/0011-malware Federal Trade Commission (FTC)
  16. http://www.ftc.gov/news-events/press-releases/2003/12/court-bars-canadian-company-misleading-consumers-marketing Court Bars Canadian Company from Misleading Consumers in Marketing of Internet Domain Name Services (December 23, 2003), Federal Trade Commission (FTC)
  17. http://www.theregister.co.uk/2003/09/25/verisign_slammed_for_domain_renewal/ VeriSign Slammed for Domain Renewal Scam by Kieren McCarthy (September 25, 2013), The Register
  18. http://gnso.icann.org/en/group-activities/inactive/2011/rap (PDF) Working Group Final Report pp.43-45 (May 29, 2010), Generic Names Supporting Organization (GNSO)
  19. http://www.bbb.org/council/migration/bbb-warnings/2010/02/ftc-botnets-and-hackers-and-spam-oh-my/ (February 23, 2010), Better Business Bureau
  20. http://www.ftc.gov/news-events/press-releases/2009/06/ftc-shuts-down-notorious-rogue-internet-service-provider-3fn (June 4, 2009), Federal Trade Commission (FTC)