PART II. GENERAL LEGAL WORK

DESCRIPTION OF PROCEDURE

(SEE CHART OPPOSITE THIS PAGE)

A case before the Federal Trade Commission may originate in any one of several ways. The most common origin is through complaint by a consumer, a competitor, or from public sources other than the Commission itself. However, the Commission may initiate an investigation to determine whether the laws administered by it are being violated.

No formality is required in making application for complaint. A letter setting forth the facts in detail is sufficient, but it should be accompanied by all evidence in possession of the complaining party in support of the charges made.

INFORMAL PROCEDURE

When an application for complaint is received, the essential jurisdictional elements are first considered. If a proposed proceeding is to be instituted under Section 5 of the Federal Trade Commission Act as amended by the Wheeler-Lea Act of March 21, 1938,1 it must be shown that it concerns the use of an unfair method of competition or an unfair or deceptive act or practice in commerce and that such proceeding "would be to the interest of the public." The prohibition against unfair methods of competition and the remedies for enforcing same are made applicable by the Export Trade Act to foreign trade of American exporters. Proceedings instituted under Section 2 of the Clayton Act, as amended (see Robinson-Patman Antidiscrimination Act), under the circumstances therein set forth, have to do with price discrimination and certain other forms of discrimination, and proceedings brought under Sections 3, 7, and 8 of the Clayton Act, involve, respectively, tying and exclusive-dealing contracts, agreements, or understandings, corporate acquisitions of stock in competing companies, and interlocking directorates. If the infor

1The Federal Trade Commission has no jurisdiction under Section 5 of the Federal Trade Commission Act over banks, common carriers subject to the acts to regulate commerce, air carriers or foreign air carriers subject to the Civil Aeronautics Act of 1938, or persons, partnerships, or corporations subject to the Packers and Stockyards Act, 1921, except as provided in section 406 (b) of the last mentioned act. The Federal Trade Commission, the Interstate Commerce Commission, the Federal Communications Commission, the Federal Reserve Board, and the Civil Aeronautics Authority are empowered to enforce compliance with sections 2, 3, 7, and 8 of the Clayton Act.

mation furnished by the applicant is insufficient, it is necessary to obtain additional data by further correspondence or by a preliminary field investigation before deciding whether an application for complaint should be docketed and an investigation made.

When an application for complaint has been docketed, it is assigned by the Chief Examiner to an attorney for investigation, in which the facts regarding the matter are developed. The attorney to whom the application is assigned in the course of the investigation interviews the party complained against, advising of the nature of the charges and requesting the submission of such evidence as may be desired in defense or in justification. In making such investigation, it is not the policy of the Commission to disclose the identity of the complainant. If necessary, competitors of the respondent are interviewed to determine the effect of the practice from a competitive standpoint. It is often desirable to interview consumers to assist in determining whether the practice alleged constitutes a violation of the statute and also to establish the requisite public interest.

After developing the facts from all available sources, the examining attorney summarizes the evidence in a report, reviews the law applicable thereto, and makes recommendations as to what action the Commission should take.

The record is then reviewed by the Chief Examiner or the Special Board of Investigation, as the case may be, and, if found to be complete, is submitted, with a brief statement of facts, with conclusions and recommendations to the Commission for its consideration. The Chief Examiner or the Special Board of Investigation may recommend: (1) that the case be closed without further action because of lack of evidence in support of the charge or for the reason that the practice does not violate any law which the Commission is charged with administering, (2) closing of the application upon the signing by the respondent of a stipulation of the facts and an agreement to cease and desist from the unlawful practice as charged, or (3) issuance of formal complaint.

If, after consideration of the entire file, including the Chief Examiner's or the Special Board of Investigation's recommendation, the Commission decides that formal complaint should issue, the case is referred to the chief counsel for preparation of the complaint and trial of the case. Or, if the Commission should permit stipulation, the case is referred to the Chief Trial Examiner or the Special Board of Investigation for its negotiation.

The Special Board of Investigation conducts inquiries both by mail, and by conference with the parties concerned. See p. 122.