Federal Trade Commission

Based on Wikipedia: Federal Trade Commission

The Government's Watchdog for Corporate Misbehavior

In 2024, an obscure government agency with just five commissioners took on some of the largest corporations in America—blocking a twenty-five billion dollar grocery merger, suing pharmacy middlemen for inflating insulin prices, and attempting to free thirty million workers from non-compete agreements. The Federal Trade Commission, or FTC, had become the most aggressive regulator of corporate power in decades.

But this small agency with outsized ambitions didn't always pack such a punch. Its story begins over a century ago, in the age of the robber barons.

Born from the Trust Crisis

To understand the FTC, you first need to understand what a "trust" meant in the late 1800s. It wasn't about trustworthiness—it was the opposite. A trust was a legal arrangement where competing companies would hand over their stock to a single board of trustees, who would then run all the companies as one coordinated monopoly. The Standard Oil Trust, controlled by John D. Rockefeller, became the most notorious example, squeezing out competitors and controlling ninety percent of American oil refining.

In 1911, the Supreme Court finally broke up Standard Oil, ruling it violated antitrust laws. But the court system proved painfully slow at policing corporate behavior. Politicians realized they needed a different approach—a dedicated government body that could move faster than judges.

Oklahoma congressman Dick Thompson Morgan introduced the first bill to create such a commission in January 1912. The idea caught fire. By the 1912 presidential election, nearly every political party endorsed creating a federal trade commission. The thinking was simple: an administrative board could regulate business more quickly than courts grinding through case after case.

Woodrow Wilson signed the Federal Trade Commission Act on September 26, 1914. Three weeks later, Congress tightened the regulatory framework further with the Clayton Antitrust Act. America now had a new cop on the corporate beat.

How the Commission Works

The FTC operates differently from most government agencies. Five commissioners run the show, each nominated by the president and confirmed by the Senate. They serve seven-year terms—longer than a president's term—and here's the key protection: they can only be fired for serious misconduct like neglecting their duties or breaking the law. A president can't simply remove commissioners who make decisions the White House dislikes.

There's another safeguard against political capture. No more than three commissioners can belong to the same political party. This forces some degree of bipartisan balance, though the president does get to pick which commissioner serves as chair.

The agency shares responsibility for enforcing antitrust law with another body: the Antitrust Division of the Department of Justice. But there's a crucial difference. The Justice Department can bring criminal charges against companies and executives. The FTC handles only civil enforcement—it can sue companies and seek fines, but it can't send anyone to prison.

Over the decades, Congress has steadily expanded what the FTC can regulate, from the original focus on anticompetitive practices to consumer protection, privacy, and beyond. The rules the agency creates are compiled in Title 16 of the Code of Federal Regulations—a dense volume that few Americans have read but that shapes countless business practices.

The Funeral Rule: Protecting the Grieving

One of the FTC's more unusual regulatory territories involves death itself.

In 1984, the agency began regulating funeral homes after investigations revealed widespread deceptive practices. Families, overwhelmed by grief and unfamiliar with funeral costs, were being exploited. Funeral homes would bundle services in confusing ways, making it nearly impossible to comparison shop or decline unnecessary extras.

The FTC Funeral Rule created a simple but powerful requirement: every funeral home must provide a General Price List to anyone who asks. This document must itemize every good and service with its price clearly stated. No one can be denied a written copy they can take home.

By 1996, the agency had set up the Funeral Rule Offenders Program, giving funeral homes caught violating the rules a choice: make a voluntary payment to the U.S. Treasury and undergo compliance training, or face a full lawsuit. Most choose the former. The program combines the threat of legal action with an escape valve for businesses willing to reform.

Taking on Telemarketing Fraud

The mid-1990s brought a new enforcement strategy that the FTC would use repeatedly: the coordinated "sweep."

Rather than pursuing fraudsters one at a time, the agency started coordinating with federal, state, and local partners to file legal actions against multiple targets simultaneously. The first major operation, Project Telesweep in July 1995, cracked down on one hundred business opportunity scams at once. The approach was designed to send a message: fraud wasn't just risky because you might get caught—it was risky because you might get caught in a dragnet.

These sweeps would become a recurring FTC tactic, deployed against everything from fake weight loss products to tech support scams to predatory debt collectors.

Privacy in the Digital Age

As the internet transformed commerce, the FTC adapted. Two cases from the 2000s illustrate how the agency approaches digital privacy.

In 2004, Gateway Learning, which sold educational products, did something many tech companies would later try: it changed its privacy policy after the fact. The company had promised not to sell customer information. Then it changed its policy and started selling that information anyway—without telling the customers who had signed up under the original promise.

The FTC called this unfair and deceptive. Gateway settled by agreeing to give up some profits and operate under restrictions for the next twenty years.

Five years later, Sears faced a similar complaint. The retail giant had distributed "research software" that tracked nearly everything users did online. Technically, Sears disclosed this—but the disclosure was buried in dense legalese deep within an end-user license agreement that almost no one reads. The FTC argued this didn't count as meaningful disclosure. Sears settled.

These cases established an important principle: privacy promises matter, and hiding the truth in legal fine print doesn't excuse deceptive practices.

The Strange World of Predatory Academic Journals

In 2016, the FTC ventured into unexpected territory: the world of academic publishing.

OMICS Publishing Group had built a business on exploiting the pressure academics face to publish their research. The company ran what are called "predatory journals"—publications that mimic legitimate scientific journals but lack real peer review. Researchers desperate for publications would submit papers, only to discover hidden fees ranging from hundreds to thousands of dollars.

OMICS also organized scientific conferences, advertising that prominent experts would speak. Researchers would pay registration fees and fly across the country, only to discover the advertised speakers had never agreed to appear. Sometimes OMICS would refuse to let researchers withdraw papers they'd submitted, effectively holding manuscripts hostage and preventing authors from submitting elsewhere.

Library scientist Jeffrey Beall, who maintained an influential list of predatory publishers, described OMICS as among the most egregious offenders. The FTC's case against them was the first the agency had ever brought against an academic publisher.

A federal court in Nevada issued a preliminary injunction in November 2017, prohibiting OMICS from lying about who edited their journals or who would speak at their conferences. In April 2019, the court imposed a fifty million dollar fine—a massive penalty for a company most Americans had never heard of.

Hospital Mergers and the Price of Consolidation

The FTC has long scrutinized mergers before they happen, trying to block combinations that would reduce competition. But in recent years, the agency has added a new approach: looking backward at mergers that already occurred to document their effects.

This retrospective analysis has proven particularly valuable in healthcare. When hospitals merge, they often promise efficiencies that will benefit patients. The FTC has gathered data showing these promises frequently don't materialize. Instead, consolidated hospital systems often raise prices, knowing that insurance companies have fewer alternatives.

In 2011, the FTC challenged Phoebe Putney Memorial Hospital's attempt to acquire Palmyra Medical Center for $195 million. The agency argued the deal would create a monopoly, allowing the combined hospital to charge whatever it wanted. The case went all the way to the Supreme Court, which ruled for the FTC in February 2013.

That same year, the FTC forced ProMedica, an Ohio health system, to unwind its 2010 acquisition of St. Luke's Hospital. An administrative judge found the behavior of both parties "anticompetitive" and ordered ProMedica to sell St. Luke's to a buyer the FTC would approve.

When OSF Healthcare tried to acquire Rockford Health System in Illinois, the FTC sued to block it, arguing OSF would control sixty-four percent of the market and face only one competitor. OSF abandoned the deal.

The Social Media Monopoly Question

In December 2020, the FTC took on its biggest target yet: Facebook, now known as Meta.

The complaint alleged that Meta had violated antitrust law through a straightforward strategy: when it couldn't beat competitors, it bought them. The acquisition of Instagram in 2012 and WhatsApp in 2014 eliminated potential rivals. The FTC argued this reduced consumer choice—with fewer social media platforms, users had fewer alternatives if they didn't like how Facebook treated their data, and advertisers had fewer places to reach audiences.

The case intersected with growing public concern about Big Tech's power. But proving antitrust violations in technology markets proved difficult. Unlike traditional monopolies that raise prices, tech platforms often offer free services. Courts have struggled with how to measure consumer harm when consumers aren't paying.

The case continued for years, raising fundamental questions about whether antitrust law designed for industrial-age monopolies could adapt to digital-age platforms.

The Limits of Agency Power

In 2021, the Supreme Court delivered a significant blow to the FTC's enforcement toolkit.

The case, AMG Capital Management v. FTC, involved a payday lender accused of deceptive practices. The FTC had sought not just to stop the behavior but to recover money for harmed consumers. The agency had done this for decades under Section 53(b) of the FTC Act.

The Supreme Court unanimously disagreed. All nine justices found that the 1973 law only gave the FTC power to seek injunctions—orders to stop doing something—not monetary relief. The agency could still pursue money through a longer administrative process, but its quick-strike ability to recover funds for consumers had been sharply curtailed.

The decision highlighted a recurring tension in American law: agencies interpret their powers broadly, and courts periodically rein them in.

The Non-Compete Gambit

Perhaps no FTC action in recent years proved more ambitious—or more controversial—than the attempt to ban non-compete agreements.

Non-compete clauses are provisions in employment contracts that prevent workers from joining competitors after leaving a job. A software engineer might agree not to work for a rival company for two years. A hairdresser might promise not to open a salon within twenty miles.

The FTC estimated that thirty million American workers were bound by such agreements. In April 2024, the agency issued a rule banning nearly all of them. The only exception: senior executives could still be held to existing non-competes.

The agency's reasoning was economic. When workers can't leave for competitors, they have less bargaining power. Switching jobs typically provides the biggest pay raises in a worker's career. Non-competes trap people in low-wage jobs, keep them in abusive work environments, and—in the case of doctors—sometimes force physicians to leave medicine entirely rather than move to a new practice.

But did the FTC have the authority to issue such a sweeping rule?

Federal judge Ada Brown said no. On August 20, 2024, her Texas court overturned the ban entirely, calling it "unreasonably overbroad." The FTC, she ruled, didn't have the power to make this kind of nationwide policy decision. That was a job for Congress.

The FTC indicated it was "seriously considering a potential appeal," but the ruling underscored the limits of what an independent agency can accomplish without explicit congressional authorization.

Taking on Big Pharma's Middlemen

Most Americans have never heard of pharmacy benefit managers, or PBMs. But these companies sit at the center of how prescription drugs get priced and distributed.

When you fill a prescription, a PBM typically handles the transaction between your insurance company and the pharmacy. PBMs negotiate with drug manufacturers for rebates, decide which drugs your insurance will cover, and set reimbursement rates for pharmacies. The three largest—OptumRx, Express Scripts, and Caremark—control roughly eighty percent of American prescriptions.

Here's what makes this concerning: each of the big three PBMs shares a parent company with a major health insurer. OptumRx is owned by UnitedHealth Group. Express Scripts belongs to Cigna. Caremark is part of CVS Health, which also owns the insurance company Aetna.

The FTC launched an investigation in 2022. Two years later, in July 2024, the agency released a preliminary report accusing these companies of raising drug prices through conflicts of interest. The PBMs allegedly created a rebate system that prioritized drugs with high rebates—meaning drugs that made the PBMs more money—rather than drugs that were cheapest for patients.

The agency noted that several PBMs had failed to provide documents in a timely manner and warned it might take them to court.

By September 2024, the FTC sued the three largest PBMs, accusing them of artificially inflating insulin prices. The lawsuit sought to prohibit PBMs from favoring drugs simply because they generated higher profits.

Blocking the Grocery Mega-Merger

In February 2024, the FTC challenged what would have been one of the largest retail mergers in American history: Kroger's $24.6 billion acquisition of Albertsons.

Kroger operates thousands of grocery stores under names like Ralphs, Fred Meyer, and Harris Teeter. Albertsons owns Safeway, Vons, Jewel-Osco, and others. Combined, they would have controlled a massive share of the American grocery market.

The FTC argued the merger would hurt consumers in multiple ways: higher grocery prices, higher pharmacy prices, worse service. It would also harm workers through lower wages and worse working conditions. When companies face less competition for employees, they don't need to pay as much to attract and retain staff.

In December 2024, U.S. district judge Adrienne Nelson agreed. She issued a preliminary injunction halting the merger, finding that it would risk reducing competition at the expense of both consumers and workers.

The same month, the FTC released a separate report finding that grocery chains had used inflation as cover to boost their profit margins—charging even more than rising costs would justify.

Click to Cancel

Ever tried to cancel a subscription and found yourself trapped in a labyrinth of phone trees, chat bots, and "retention specialists" trying to change your mind?

In October 2023, the FTC proposed a simple rule: canceling a subscription must be as easy as signing up. If you can subscribe with one click online, you should be able to cancel with one click online.

A year later, in October 2024, the agency finalized the rule, dubbed "click to cancel." The regulation takes aim at a widespread practice—companies that make it effortless to start paying them and excruciatingly difficult to stop.

The Fake Review Crackdown

Online reviews have become the digital equivalent of word-of-mouth recommendations. But they're also ripe for manipulation. Companies pay for fake positive reviews, or fake negative reviews of competitors. Some reviews come from people who never used the product.

In August 2024, the FTC announced it would finalize rules banning fake reviews and testimonials. The rule aims to restore some trust to a system that consumers increasingly view with skepticism.

Google's Monopoly—and the Shifting Remedy

The FTC wasn't the only agency pursuing Big Tech. The Department of Justice, working alongside state attorneys general, sued Google over its dominance in search.

In November 2024, U.S. district judge Amit Mehta ruled that Google was indeed a monopoly—and ordered the company to sell its Chrome web browser. Chrome, used by billions of people, provides Google with valuable data and a default connection to its search engine.

But by September 2025, the judge had reversed course. Google would not be forced to sell Chrome after all. Instead, the company would have to share data with search competitors and stop making exclusivity deals with hardware manufacturers—the arrangements where phone makers agree to make Google the default search engine in exchange for payments.

The shifting remedy illustrated how difficult it is to unscramble a tech monopoly once it's been established.

The Agency Today

As of January 2025, Commissioner Andrew N. Ferguson chairs the FTC. The agency continues to operate from the Federal Trade Commission Building in Washington, D.C., a grand neoclassical structure that opened in 1938.

The FTC's power waxes and wanes with political currents. During the Biden Administration, Chair Lina Khan pursued an aggressive enforcement agenda, taking on Big Tech, challenging mergers, and attempting broad regulatory changes like the non-compete ban. Whether that approach continues—or is rolled back—depends on who holds power and how courts interpret the limits of agency authority.

What remains constant is the agency's dual mission: promoting competition and protecting consumers. In practice, these goals often overlap. When companies can't exploit monopoly power, consumers face lower prices and more choices. When deceptive practices are banned, honest businesses can compete fairly.

The FTC's story is really a story about a fundamental question in American life: How much should the government referee the market? For over a century, this small agency has been at the center of that debate, sometimes pushing boundaries, sometimes getting pushed back, always trying to answer a question that has no permanent solution.

The trusts of Rockefeller's era gave way to different concentrations of power—tech platforms, pharmacy middlemen, hospital systems. The tactics change. The underlying tension doesn't.