What is the role of the Federal Trade Commission established by the FTC Act of 1914, and how does it differ from the Sherman Act's approach?

• A. Aimed to directly regulate securities markets and set interest rates.
• B. Replaced the Sherman Act as the sole anti-trust enforcement tool.
• C. Focused primarily on immigration and consumer protection unrelated to business practice.
• D. Created a dedicated agency to enforce fair competition and curb deceptive practices; complements the Sherman Act's broad prohibitions.

Answer: (D)

The key idea is that the Federal Trade Commission creates a dedicated, ongoing regulator to keep markets fair by policing unfair or deceptive acts or practices and methods of competition. The FTC Act of 1914 gave the agency power to investigate business conduct, issue rulemaking and guidance, and bring civil actions to stop unfair practices through administrative remedies like cease-and-desist orders and consent orders. This is a preventive, regulatory approach aimed at protecting consumers and maintaining competitive markets.

This stands in contrast to the Sherman Act, which from 1890 bans certain anti-competitive arrangements and monopolistic practices and relies on court prosecutions and criminal penalties. The Sherman Act establishes broad prohibitions, while the FTC provides a specialized, proactive enforcement mechanism focused on preventing deception and unfair competition. Together, they shape antitrust policy: broad prohibitions from the Sherman Act, and targeted, consumer-protection–oriented enforcement and regulation from the FTC.