Federal Trade Commission Act of 1914 facts for kids
The Federal Trade Commission Act of 1914 is an important U.S. law. It created the Federal Trade Commission (FTC). President Woodrow Wilson signed this law in 1914. The Act helps stop businesses from using unfair ways to compete. It also prevents them from doing unfair things that harm trade or shoppers.
Contents
Why the Act Was Needed
The idea for this law began in 1890. That's when the Sherman Antitrust Act was passed. People wanted to stop companies from working together to control prices. This was called a "price-fixing cartel."
Early Steps Against Monopolies
A big step happened in 1904. A court case called Northern Securities Co. v. United States broke up a large company owned by J. P. Morgan. After this, the government started to take antitrust laws more seriously.
President Theodore Roosevelt then created the Bureau of Corporations. This group studied businesses and the economy. It was like an early version of the Federal Trade Commission.
Protecting Consumers and Businesses
In 1913, President Wilson wanted to do more. He helped pass the Federal Trade Commission Act. He also passed the Clayton Antitrust Act. The Federal Trade Commission Act aimed to make businesses fairer. Congress hoped it would protect shoppers from false advertising. They wanted businesses to be honest about what they sold.
What the Act Does

The Federal Trade Commission Act does more than just create the FTC. It gives the Commission many powers:
- It stops unfair ways of competing.
- It prevents unfair or misleading actions by businesses.
- It can get money back for shoppers who were harmed.
- It creates rules to define what is unfair or misleading.
- It can investigate how businesses operate.
- It gives reports and ideas for new laws to Congress.
Working with Other Laws
This Act was part of a larger effort in the early 1900s. The goal was to use special groups, like commissions, to watch over businesses. The Federal Trade Commission Act works with the Sherman Act and the Clayton Act. If a business breaks the Sherman Act, it also breaks the Federal Trade Commission Act. This means the FTC can act on those cases.
These laws all have one main goal. They protect fair competition for shoppers. They make sure businesses try hard to be efficient. They also help keep prices low and quality high. These laws are still very important today.
Stopping Unfair Practices
The FTC can issue "cease and desist" orders. These orders tell large companies to stop unfair trade practices. The Act also helps protect privacy. It lets the FTC punish companies that break their own rules. This includes false advertising or other actions that harm shoppers. Some unfair practices targeted were misleading ads and unfair pricing.
The Senate approved the Act on September 8, 1914. The House of Representatives approved it on September 10. President Wilson signed it into law on September 26, 1914.
See also
In Spanish: Ley de la Comisión Federal de Comercio para niños