Enforcement “Plus:” The FTC’s Business Education Efforts

Kelly Signs, Aug 13, 2012

Law enforcement can have obvious consequences for the targets of investigations, but it can also affect the conduct of other businesses. Research shows that the vast majority of businesses want to comply with legal requirements, not just to avoid sanctions but also to maintain a reputation as an ethical business. Informed businesses can anticipate the consequences of a particular course of action, thereby reducing uncertainty about potential legal pitfalls and increasing compliance with prevailing legal standards. Yet to comply, businesses must be aware of a wide variety of laws, rules, and guidelines governing their conduct.

As the only U.S. agency with both consumer protection and competition jurisdiction in broad sectors of the economy, the Federal Trade Commission enforces laws and regulations aimed at protecting consumers from unfair, deceptive, or anticompetitive conduct. Long ago, the FTC recognized thatpreventing law violations is even more important than detecting and punishing violators, and that educating businesses about legal requirements encourages them to avoid policies and practices that might later be found to be unfair, deceptive, or anticompetitive. Preventing conduct that is likely to harm consumers leads to obvious, if difficult to calculate, benefits-for both consumers and the businesses themselves. Moreover, effective and efficient FTC enforcement promotes policies that encourage competition on the merits and truthful, non…

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