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The Maximum Penalty for a Knowing Violation of Unfair Trade Practices Law Is


Section 6 of the FTC Act provides another investigative tool. Article 6(b) empowers the Commission to require an undertaking to submit its application `annually or specifically`. Reports or written answers to specific questions” to provide information about the company`s “organization, business, behavior, practices, management and relationships with other companies, partnerships and individuals”. 15 U.S.C. Section 46(b). As with subpoenas and CIDs, the addressee of an order under paragraph 6(b) may file an application for restriction or rescind, and the Commission may apply for a court order requiring compliance. If a party fails to comply with a section 6(b) order upon receipt of a notice of default from the Board, the Commission may, pursuant to Section 10 of the FTC Act, 15 U.S.C Sec. 50, apply to the Federal Court. After a grace period of thirty days, a defaulting party is responsible for each day of non-compliance with a penalty. Id.; Commission Article 1.98 (f), 16 C.F.R. Section 1.98 (f). Fraudulent business practices lead to criminal prosecution in some States; in other cases, the laws provide for private enforcement, with a citizen having the right to sue a company for violating misleading laws about business practices and for potentially receiving punitive damages and/or legal fines.

The state attorney general can also take legal action against an offensive company. The Competition Bureau regularly uses the subpoena provisions of Section 9 to investigate alleged unfair competition methods and other antitrust violations. Under amendments to the FTC Act of 1994, the Competition Bureau may also use civil investigation (“CID”) requests to investigate possible violations of antitrust laws. However, the Consumer Protection Bureau can only use CIDs instead of subpoenas to investigate possible “unfair or deceptive acts or practices.” FTC Act § 20, 15 U.S.C § 57b-1. The scope of a CID is different from that of a subpoena. Subpoenas and CIDs can be used to obtain existing documents or oral testimony. However, a CID may also require the recipient to “submit written reports or answers to questions.” 15 U.S.C§ 57b-1(c)(1). In addition, Section 20 expressly permits the issuance of CIDs that require the manufacture of tangible property and provides for the service of CIDs on companies that do not fall within the territorial jurisdiction of a United States court. 15 U.S.C. Section 57b-1(c)(7)(B). During the administrative procedure, the Commission decides, in the context of judicial proceedings, whether a practice infringes the law. Under Section 5(b) of the FTC Act, the Commission may challenge “unfair or deceptive acts or practices,” “unfair competition practices,” or violations of other laws enforced by the FTC Act by entering into an administrative judgment.

If the Commission has “reason to believe” that there has been a violation of the law, it may file a complaint setting out its charges. If the defendant decides to settle the allegations, he or she may sign a consent agreement (without acknowledging responsibility), accept the registration of a final order, and waive any right to judicial review. If the Commission accepts the proposed consent agreement, it will record the order for thirty days of public comment (or for such other period as the Commission may specify) before deciding whether the order will become final. In addition, the Commission applies various other consumer protection laws that prohibit well-defined practices. These laws generally stipulate that violations must be treated as if they were “unfair or deceptive” acts or practices under paragraph 5(a); Many also stipulate that violations must be treated as if they were violations of a trade regulation rule enacted under Section 18 of the FTC Act (and therefore subject to civil penalties). Summaries of the laws conferring enforcement powers on the Commission are available on this website. Even if, by decision, the Commission finds that a practice infringes consumer protection law or competition law, it must still seek the assistance of a court to obtain civil sanctions or consumer protection measures in the event of a breach of its injunctions or trade rules (see below). In this section, we discuss the possibility for the Commission to challenge a practice directly in court without first definitively concluding by the Agency that the impugned conduct is unlawful.

Section 5(a) of the FTC Act provides that “unfair or misleading acts or practices in commerce or affecting trade … are. declared illegal. 15 U.S.C§ 45(a)(1). Safe Web clarified that “unfair or deceptive acts or practices” in Section 5(a) include acts or practices related to foreign trade that cause or are likely to cause reasonably foreseeable harm in the United States or involve material conduct in the United States. .

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