Weinberger, Caspar W.

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Case Western Reserve Law ReviewVolume 22 | Issue 11970The Federal Trade Commission: Progress and aNew ProfileCaspar W. WeinbergerFollow this and additional works at: https://scholarlycommons.law.case.edu/caselrevPart of the Law CommonsThis Article is brought to you for free and open access by the Student Journals at Case Western Reserve University School of Law Scholarly Commons.It has been accepted for inclusion in Case Western Reserve Law Review by an authorized administrator of Case Western Reserve University School ofLaw Scholarly Commons.Recommended CitationCaspar W. Weinberger, The Federal Trade Commission: Progress and a New Profile, 22 Case W. Res. L. Rev. 5 (1970)Available at: https://scholarlycommons.law.case.edu/caselrev/vol22/iss1/41970]The Federal Trade Commission:Progress and a New ProfileAn Address* by the Honorable Caspar W. WeinbergerT IS INDEED a great honor to be asked to appear before sucha distinguished body as the Ohio State Bar. What I wish tospeak to you about today is the steps the Federal Trade Commission(FTC) is taking to assure that its authority under section 5 of theFederal Trade Commission Act,1and the additional power weTHE AUTHOR: HON. CASPAR W. are hopeful that Congress willWBIlBERGER (A.B. and LL.B., HarvardUniversity) served as Chairman of the give to the Commission, areFederal Trade Commission from Jan- properly and efficiently wieldeduary, 1970, through July, 1970. He ispresently the Deputy Director, Office of to protect the American publicManagement and Budget, Executive Of- from market abuses.fice of the President. Section 5, under which theCommission is empowered tobring a halt to unfair methods of competition and unfair or de-ceptive acts or practices in commerce, is a double-edged broadswordwhich, when finely sharpened, can act to protect the consumer intwo ways. Not only is section 5 the source of the Commission'sbasic power to act in deceptive practice matters, but also the Su-preme Court has held in numerous instances that under this statutethe Commission can act to stop practices in their incipiency, if thosepractices, when full-blown, would constitute violations of the Sher-man Act.2Accordingly, the Commission of this decade will be dedicatedto assuring that fairness in the marketplace prevails. It will actswiftly, not only to prevent unfairness in what have traditionallybeen viewed as deceptive practices, but also to prevent unfair actsin attempts to monopolize.In the summer of 1969 the American Bar Association Commis-sion to study the Federal Trade Commission found that the FTCof the 1960's was probably superior to most of its predecessors, but* This address was delivered before the Fourth Annual Antitrust Institute of theOhio Bar Association, May 14,1970, in Akron, Ohio.1 15 U.S.C. § 45 (1964).2 15 U.S.C. §§ 1-7 (1964). See, e.g., FTC v. Brown Shoe Co., 384 U.S. 316, 322(1966); FTC v. Motion Picture Advertising Co., 344 U.S. 392, 394-95 (1953).CASE WESTERN RESERVE LAW REVIEWstill failed to live up to the promise of its creation.3 Specifically,the ABA Commission found that, through a lack of effective direc-tion, the FTC had failed to establish goals and priorities, to pro-vide necessary guidance to its staff, and to manage the flow of itswork in an efficient and expeditious manner. Without fully en-dorsing all that is contained in this report, I do not think it rashto admit that the Commission can do better, and in this decadeour constituency has already indicated that "better" will not besufficient. Excellence will be demanded in order to meet the chal-lenge of improving the quality of life for all our citizens. Mis-management of resources at the FTC or elsewhere in our societycan no longer be tolerated.It is thus no wonder that a great deal of my time during myfirst 4 months at the Commission was spent studying the organiza-tional chart of the Commission in hopes that the FTC's performancecould be improved. I also spent a great deal of time searching forthe very best men to fill the many vacant positions at the senior stafflevel, insuring that, once the Commission is efficiently organized, thepromise of the Commission's founding will be kept during the1970's.Considerable progress has been made in solving the manpowerproblems at the senior staff level, and the new profile of the Com-mission is now being closely considered by the Commission mem-bers. I am hopeful that after the members act the shape of the newCommission can be fully disclosed. Although the reorganizationalplans are incomplete, I can bring you up-to-date on the progresswhich has been made.Shortly after becoming Chairman, I asked the attorneys incharge of the 11 field offices to submit their views on improvingtheir effectiveness in the area of consumer protection. In a meetingheld with the full Commission, it became dear that we should ex-pand this topic to consider more generally the full role of theCommission's field office attorneys. Why, for example, should thefield office attorneys not be able to act promptly in response to con-sumer complaints without reference to Washington, except for ac-tions which only the Commission itself could take? Obviously thefield offices should be able to respond swiftly, and the Commissionis aware that it can no longer fail to fully utilize the untappedlegal skills of the field office attorneys.3 REPORT OF THE ABA COMMISSION TO STUDY THE FEDERAL TRADE COMMISSION(1969).[Vol. 22: 5FEDERAL TRADE COMMISSIONNeedless to say, the field offices did not merely accept, but en-thusiastically welcomed, this opportunity for increased participation.As a result of the meeting with these representatives of the fieldoffices, they have been given the authority to conduct investigationsin regional and local deceptive practice matters on their own initia-tive, without reference to Washington except for the routine house-keeping chores required by good management principles. This au-thority has been delegated as well to the field offices in all restraintof trade matters except mergers. In order to make implementationof this new policy practical, the Commission has also delegated tothe attorney in charge of a field office, and to his assistant, the powerto issue investigational subpoenas. Field office attorneys will alsoprepare their own complaints and trial memoranda, and they willtry their own cases.Although these changes appear minor, they will hopefully bringmajor results. First, delay and duplication of effort should be re-duced because one attorney will handle both investigation and trial.Second, we now hope that promising law school graduates of lawreview caliber who are interested in trial work will be attracted tocareers in the field offices. Most important, however, we feel thatthis change assures that local and regional problems will be givenprompt and effective attention.Further indicative of the Commission's and the field offices' newvitality is the creation of consumer protection committees in majormetropolitan areas. One such committee has already been estab-lished in Chicago, and the creation of such committees in the 15largest population centers is our goal for the immediate future.These committees, composed of federal, state, and local agencies,have as their target consumer fraud in all of its most virulent forms.As part of the one-step complaint service provided by these com-mittees, a consumer complaint that may have been filed with thewrong agency will be automatically forwarded to the appropriatedestination. No longer will frustrated consumers face the depress-ing aggravation of being shunted from one agency to another untilthey give up in their attempts to achieve redress, totally disillu-sioned with all levels of government.As another part of this cooperative effort to give effective con-sumer protection, modern data retrieval methods will be utilizedto keep track of emerging problems of consumer fraud.We feel that these steps which have already been taken will goa long way toward erasing the image of a somnolent Federal Trade19701CASE WESTERN RESERVE LAW REVIEWCommission. Obviously the increased responsibility of the field of-fices makes it of the utmost importance that our attorneys in chargebring the aggressive spirit of a public defender to their responsibil-ities.The steps outlined above vastly improve the service that thefield offices can provide both in antimonopoly and deceptive prac-tice work. We will not rest on this improvement, however, nor doI wish to give the impression that the trial staff in Washingtonwill be downgraded. All merger and acquisition matters will con-tinue to be handled by them, as well as all problems which arenational in scope. Also, as need dictates, skilled trial attorneys onthe Washington staff will be made available to assist the field officepersonnel in the trial of their cases.Another prime responsibility of the Commission's Washingtonstaff must be planning. Clearly our resources are not sufficientto investigate every potential violation of section 5. We cannotwaste time on relatively trivial matters. What matters are trivial,however, may be hard to determine, yet this determination must beone of the Commission's first tasks if it is to carry out its responsibil-ities in a coherent fashion. As part of this determination, the Com-mission must have empirical data showing how effective its cease anddesist orders really are. Currently we are engaged in a major studyof the Commission's Robinson-Patman orders with just that end inmind. We are also taking a hard, critical look at the way in whichthe Commission's Rules of Practice and Procedure work in an ef-fort to insure that adjudicative matters will be handled with fair-ness and dispatch. In stressing the need to improve the rules, I amnot unmindful that justice delayed is indeed justice denied.To help in its attempt to improve the rules as well as to insurefairness to all parties, the Commission has sought the most capableand energetic men it could find, from both the private and academicsectors, to serve on a 15-member Advisory Council which will thor-oughly study the rules. As the Commission enters this era of enlarg-ing responsibility, the Council, in addition to its efforts to eliminatedelay, will turn its attention to newly emerging procedural problems.We fully intend that the Council, in addition to giving the Com-mission the benefit of its view on specific matters referred to it by theCommission, will generate its own suggestions with respect to theCommission's Rules of Practice and Procedure. In short, it is ourintent, with the assistance of the new Advisory Council, to make the[Vol. 22: 5FEDERAL TRADE COMMISSIONCommission's rules a model of efficiency and fairness. Hopefullythis will be achieved by the beginning of 1971.I have spoken a great deal about planning. In doing so I donot wish to give the impression that, while these studies go forward,the Commission will decrease or retard its efforts to enforce thestatutes for which it is responsible. To the contrary, I believe youwill find that the Commission is about to increase its efforts to en-force section 7 of the amended Clayton Act,4 the so-called "bigbuyer" provisions of section 2(f)5 of that Act, and section 5 of theFederal Trade Commission Act.6 In addition, the recently dele-gated authority to the field offices should result in increased activityin consumer protection matters.All of us are consumers and thus have a stake in the success orfailure of the Commission's efforts to do the job required of it in aconsistently better way. However, no one should take my commentshere as indicating an antibusiness sentiment on the part of theCommission. Everyone at the Commission realizes that our de-mocracy and our economic system are interdependent and have pro-duced the highest standard of living known to the world. We alsorealize that the vast majority of businessmen are affirmatively tryingto make our system continue to flourish by obeying the law. Forthis vast majority, the Commission will always be a source of sup-port and advice. In situations where affirmative regulation is re-quired, we will seek as much as possible to do so in an industry-wide manner which is equitable for all. The Commission has nowish to unduly interfere with the private sector. Its increased ac-tivity will be directed toward those who would willfully violate thelaws, thus threatening the continued success of our economic sys-tem. In its efforts the Commission will fully use all the powersat its disposal, and I am quite confident that Congress will increasethese powers as requested by the President.Under a broadened and modern definition of interstate com-merce, the Commission should soon have the power to attack abusesof the consumer which merely affect commerce. Hopefully theCommission will also be given the power to seek preliminary in-junctions so that unfair practices will not continue while hearingson the merits are pending. This will eliminate the benefit of delayand encourage expeditious hearings, thus reversing an unfortunate4 15 U.S.C § 18 (1964), formerly ch. 25, § 7, 38 Stat. 631 (1914).5 15 U.S.C. § 13(f) (1964).6 15 U.S.C. . 45 (1964).19701CASE WESTERN RESERVE LAW REVIEWaspect of proceedings which has rewarded those who could succeedin delaying Commission action by procedural devices.I am also hopeful that the Commission will in appropriate casesbe given the right to assess civil penalties for violations when ini-tially found or for violations of orders on the books. We have alsoasked that the Commission be empowered to award damages whereconsumers have been injured by acts or practices found to be inviolation of the law.Though I have not been able to fully disclose the profile ofthe new Commission, I think you will agree that it more closelyresembles the middle linebacker of the Cleveland Browns than the"little old lady of Pennsylvania Avenue" that we have been reputedto be. Although I do not as yet think of myself as Vince Lom-bardi or Paul Brown, I have noticed that several of my staff as-sistants have on occasion been answering my requests with a ratherathletic sounding, "yes, Coach."Before ending I would like to thank you for your invitation toappear here today and assure you, should we next meet from op-posite sides of the bench, that 15 yards will be the penalty for clip-ping, whether engaged in by you or complaint counsel. As always,the referees are scrupulously fair and impartial.[Vol. 22: 5

The Federal Trade Commission: Progress and a New Profile

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The Federal Trade Commission: Progress and a New Profile

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