Since 1914, the Federal Trade Commission (FTC) has been charged with protecting the consumer from business fraud, deceptive advertising, hazardous products, and other risks to a fair marketplace, including mergers and similar anti-competitive practices. Now the FTC needs protection. Before his term expired on September 25, 1984, Michael Pertschuk, FTC Commissioner and former Chairman, submitted a 242-page well-documented indictment of the FTC’s performance under the direction of the Reagan-appointed chairman, James Miller. The charges about the subversion of the nation’s consumer watchdog agency were ignored by the nation’s press. Pertschuk charged that “The current FTC leadership, under Chairman James C. Miller, has been consumed with a single-minded determination to undo the past — not just the immediate past — but the very foundations of antitrust and consumer protection law laid down by Congress in 1914, in 1938, in 1950, and in 19?5…” A few of the examples cited by Pertschuk include:
American consumers are forced or misled into paying more for less reliable goods and are less likely to obtain redress for the repair or replacement of shoddy or defective products: The FTC has not brought a single new action against a major product defect in 3 years, despite the fact that the Commission has known about several major suspected defects.
The FTC’s failure to take timely action has placed consumers’ health and safety needlessly at risk: The Commission delayed investigations and actions against potential life-threatening defects in children’s playground equipment, rental cars, and deep sea survival suits; and buried the Food Advertising Rule which would have required food advertisers to disclose critical health information about the high fat and calorie content of foods misleadingly sold as healthful.
Increasing exploitation of children and young adults: the commission refused to initiate a serious investigation or bring action against beer, hard liquor, and cigarette advertising aimed at youth.
Neglecting consumer grievances of older Americans: buried an effort to require mobile home manufacturers to stand behind their warranty promises to repair significant defects; abandoned efforts to promote its model generic drug substitution law, which could help older consumers save millions of dollars in prescription drug costs.
Failed to challenge a single vertical or conglomerate merger: the nine largest mergers in U.S. history occurred during the 1981-84 period under Chairman Miller’s direction.
In presenting his report to the FTC, Pertschuk said: “This report may well be unique. To the best of my knowledge no sitting Commissioner … has ever submitted so comprehensive and documented account of an agency’s performance.” It is unfortunate the press did not find it so unique or worthy of coverage.
FTC REVIEW (1977-84) : A REPORT PREPAREB BY A MEMBER OF THE FEDERAL TRADE COMMISSION, by Michael Pertschuk, U.S. Government Printing Office, Washington, D.C. September 1984.