The Federal Trade Commission's Injunctive Authority

Congress granted the Federal Trade Commission (FTC) injunctive authority to enable it to quickly stop violations of the laws it administers. FTC adopted no formal policies for use of its injunctive authority under section 13(a) of the Federal Trade Commission Act, but in 1974, it adopted the following policies for use of section 13(b) of the act: (1) challenged practices should be immediately and clearly harmful; and (2) application should not raise novel issues of law or remedy. FTC also adopted the following guidelines: (1) the clearer the violation, the less the need to demonstrate the public injury, and vice versa; (2) avoid cases where private actions will be taken; and (3) avoid cases where issuance of a complaint has historically stopped the practice. From November 16, 1973, to June 30, 1978, FTC issued complaints in 171 cases and filed for injunctions 21 times, 3 times pursuant to section 13(a), 17 times pursuant to section 13(b), and once pursuant to both sections. Interviews with staff members revealed that they did not generally know what the policy was for using the injunctive authority, what the guidelines were for selecting injunction cases, or what legal standards were applicable under the injunctive authority. Although injunctions are not appropriate for every case, there have been cases where use of the authority may have better protected consumers or maintained competition. FTC should clarify and restate its policy on seeking injunctions and direct that every staff memorandum recommending that a complaint be issued contain a discussion on whether an injunction should be sought.