FTC

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Federal Trade Commission.JPG
Type: Government Agency
Industry: Legal/Consumer Protection
Founded: 1914
Headquarters: 600 Pennsylvania Avenue, N.W.
Country: USA
Website: www.ftc.gov
Facebook: Federal Tade Commission
LinkedIn: Federal Trade Commission
Twitter: TwitterIcon.png@FTCgov
Key People
Jon Leibowitz, Chairman

The Federal Trade Commission (FTC) is a U.S. federal agency dedicated to protecting the rights of consumers and implementing regulations against anti-competitive business practices. The FTC has the authority to implement trade laws and regulations and to investigate business entities reported by consumers that are suspected to be conducting unfair trade practices. The agency's mission is carried out by Bureaus of Consumer Protection, Competition and Economics, and with assistance from the Office of General Counsel and seven regional offices.[1]

History

FTC was created after the enactment of the Federal Trade Commission Act, signed by United States President Woodrow Wilson on September 26, 1914. The FTC started its operations as an independent federal agency on March 16, 1915. The agency assumed the responsibilities of the Department of Commerce Bureau of Corporation, which was created during the administration of President Theodore Roosevelt in 1903. The first commissioners of the FTC were Joseph Davies, Edward Hurley, and William Harris, and Progressives Will Parry and George Rublee. Davies was elected Chairman of the FTC.[2][3]

Powers of the FTC

The FTC has the authority to gather information, publish reports, conduct investigations, and file administrative and antitrust cases against companies practicing unfair competitive business strategies under Section 5 of the Federal Trade Commission Act. The Commission can also implement the Sherman Act, which prohibits monopoly of businesses, and the Clayton Act, which prohibits mergers and acquisitions that would reduce competition, leading to monopoly, as well as other trade regulations. It is also authorized to enforce international antitrust cases through the International Antitrust Enforcement Assistance Act.[4][5]

The General Counsel

The General Counsel serves as the chief legal counsel and adviser of the FTC. Its primary role is to represent the Commission and its operating bureaus and other offices in court proceedings and provide legal advise.[6]

The Bureau of Competition

The primary role of the Bureau of Competition is to promote competition within the business sector for the benefit and interest of consumers. The Bureau examines company mergers and acquisitions to make sure that the transaction is fair and will not result in price increases, limited choices, lesser innovation, and monopoly.[7]

The Bureau of Consumer Protection

The Bureau of Consumer Protection's main objective is safeguard the interests of consumers from deceitful and unfair business practices. The bureau increases consumer confidence by enforcing federal laws, provides information to help consumers identify fraud, and encourages consumers to file complaint regarding illegal business activities.[8]

The Bureau of Economics

The Bureau of Economics evaluates the economic impacts of government regulations and provides policy recommendations to the Legislative and the Executive Branch of the government regarding competition and consumer protection. It is also expected to analyze and support the any antitrust and consumer protection investigation as well as the creation of rules to be implemented by the commission.[9]

FTC and ICANN

The Federal Trade Commission has been regularly providing comments and recommendations on ICANN policies since the establishment of the organization. In 1999, FTC’s Bureau of Consumer Protection commented on the negotiated tentative agreements between the Internet Corporation for Assigned Names and Numbers, the U.S. Department of Commerce, and Network Solutions regarding the .com, .net and .org gTLDs. In its comment, the bureau supported the agreements, which sought to improve the Whois database. In addition, the bureau also recommended ICANN to suspend domain names if a registrant failed to provide accurate contact information after an inquiry by the registrar. Furthermore, the bureau also encouraged ICANN to expedite the implementation of a policy requiring registrars to utilize reasonable verification mechanisms.[10]

In 2006, the FTC Chairman Jon Leibowitz testified before the Senate Committee on Commerce, Science and Transportation regarding the issue of internet governance and the future of ICANN. In his testimony, Leibowitz emphasized the significance of maintaining the accuracy of the Whois database in enforcing consumer protection laws. The Chairman also informed the Senate that he attended the ICANN Meeting in Marrakesh, Morocco and its Generic Names Supporting Organization (GNSO) meetings to confront the decision to implement a policy that the Whois database should be used only for technical purposes. The FTC pointed out that if the proposed policy were implemented, it would negatively affect the consumers worldwide as the FTC would not be able to go after suspects who commit Internet fraud and those who distribute spam and spyware. The Chairman also informed the Senate that the GNSO had been working to include FTC’s suggestion in its proposal, which was to be submitted to the ICANN Board. In addition, he also encouraged ICANN’s Governmental Advisory Committee (GAC) to continuously work collaboratively with law enforcement agencies in their countries regarding the serious outcomes for law enforcement and consumer protection, should they lose access to Whois database. Furthermore, Leibowitz was interested in the FTC exploring the possibility of tiered access to resolve the issue on consumer privacy and law enforcement.[11][12]

FTC Warning on TLD Scams

In 2000, the FTC issued a warning to consumers against the pre-registration program of companies allowing consumers to pre-register their desired domain names using un-approved TLDs. FTC described the program as a "new scam" and advised consumers to ignore any pre-registration service offerings from any company asking for upfront fees. An excerpt from the FTC warning reads: Because ICANN has not yet announced its intentions, it is misleading for any service or entrepreneur to offer pre-registration or accept fees for domain names that may never come into existence." ICANN issued a similar warning to consumers.[13]

FTC Reaction on ICANN New gTLD Program

A report published following the June, 2011 approval of ICANN's new gTLD program by High Tech News Today Website suggested that the FTC did not support ICANN's program.[14] In December, 2011, FTC Chairman, Jon Leibowitz said that the gTLD program could be a "disaster" for consumers and businesses. The statements were made during a testimony to the House Judiciary Intellectual Property Subcommittee on Antitrust Enforcement. He was concerned that the program would be expensive for businesses and trademark owners, and could hamper his agency's ability to fight cyber fraud. All in all, he saw it as a costly option for businesses and consumers, with little benefit. The hearing came before a scheduled December, 8th, Senate hearing on new gTLDs, and also a gTLD focused meeting by the house scheduled for a week later.[15]

A week after Mr. Leibowitz voiced his concern at these hearings, the FTC sent a letter to ICANN to further explicate the concerns it has regarding the TLD expansion program, the letter was also sent to those members and committees of Congress involved in the aforementioned hearings. The FTC specifically concerned about the level of safety measures in place to protect both businesses and consumers. A primary concern was the effectiveness and accuracy of Whois information in combatting spam and phishing activities; they not ehtat they already deal with enough inaccurate and misleading information, and worry that the TLD expansion will only multiply the problems they encounter. The FTC also emphasized that, not only had they been making their Whois concerns known for years, similar concerns had also been raised by ICANN's GAC and other organizations involved in the multistakeholder process. They went on make the following recommendations:

  1. "Implement the new gTLD program as a pilot program and substantially reduce the number of gTLDs that are introduced in the first application round;
  2. Strengthen ICANN’s contractual compliance program, in particular by hiring additional compliance staff;
  3. Develop a new ongoing program to monitor consumer issues that arise during the first round of implementing the new gTLD program;
  4. Conduct an assessment of each new proposed gTLD’s risk of consumer harm as part of the evaluation and approval process, and;
  5. Improve the accuracy of Whois data, including by imposing a registrant verification requirement."[16]

References

  1. About the Federal Trade Commission
  2. A Brief History of the Federal Trade Commission
  3. Meeting of Federal Trade Commission, March 16, 1915
  4. The Antitrust Laws
  5. A Brief Overview of the Federal Trade Commissions Investigative and Law Enforcement Authority
  6. Office of the General Counsel
  7. The Bureau of competition
  8. The Bureau of Consumer Protection
  9. The Bureau of Economics
  10. Comment of the Staff of the Bureau of Consumer Protection of the Federal Trade Commission, October 29, 1999
  11. FTC Testimony on Internet Governance: The Future of ICANN, September 20, 2006
  12. FTC Issues Statement on Whois Databases
  13. FTC warns about top-level domain scams
  14. ICANN at the center of a controversial challenge, again
  15. FTC Chairman Comes out Swinging Against ICANNs New gTLD Plan, TheDomains.com
  16. FTC Letter to ICANN, news.dot-nxt.com