Sec. 45. Unfair methods of competition unlawful; prevention by
Commission
(a) Declaration of unlawfulness; power to prohibit unfair practices; inapplicability to
foreign trade
(1) Unfair methods of competition in or affecting commerce, and unfair or deceptive
acts or practices in or affecting commerce, are hereby declared unlawful.
(2) The Commission is hereby empowered and directed to prevent persons, partnerships,
or corporations, except banks, savings and loan institutions described in section
57a(f)(3) of this title, Federal credit unions described in section 57a(f)(4) of this
title, common carriers subject to the Acts to regulate commerce, air carriers and foreign
air carriers subject to part A of subtitle VII of title 49, and persons, partnerships, or
corporations insofar as they are subject to the Packers and Stockyards Act, 1921, as
amended (7 U.S.C. 181 et seq.), except as provided in section 406(b) of said Act (7 U.S.C.
227(b)), from using unfair methods of competition in or affecting commerce and unfair or
deceptive acts or practices in or affecting commerce.
(3) This subsection shall not apply to unfair methods of competition involving commerce
with foreign nations (other than import commerce) unless -
(A) such methods of competition have a direct, substantial, and reasonably foreseeable
effect -
(i) on commerce which is not commerce with foreign nations, or on import commerce with
foreign nations; or
(ii) on export commerce with foreign nations, of a person engaged in such commerce in
the United States; and
(B) such effect gives rise to a claim under the provisions of this subsection, other
than this paragraph. If this subsection applies to such methods of competition only
because of the operation of subparagraph (A)(ii), this subsection shall apply to such
conduct only for injury to export business in the United States.
(b) Proceeding by Commission; modifying and setting aside orders
Whenever the Commission shall have reason to believe that any such person, partnership,
or corporation has been or is using any unfair method of competition or unfair or
deceptive act or practice in or affecting commerce, and if it shall appear to the
Commission that a proceeding by it in respect thereof would be to the interest of the
public, it shall issue and serve upon such person, partnership, or corporation a complaint
stating its charges in that respect and containing a notice of a hearing upon a day and at
a place therein fixed at least thirty days after the service of said complaint. The
person, partnership, or corporation so complained of shall have the right to appear at the
place and time so fixed and show cause why an order should not be entered by the
Commission requiring such person, partnership, or corporation to cease and desist from the
violation of the law so charged in said complaint. Any person, partnership, or corporation
may make application, and upon good cause shown may be allowed by the Commission to
intervene and appear in said proceeding by counsel or in person. The testimony in any such
proceeding shall be reduced to writing and filed in the office of the Commission. If upon
such hearing the Commission shall be of the opinion that the method of competition or the
act or practice in question is prohibited by this subchapter, it shall make a report in
writing in which it shall state its findings as to the facts and shall issue and cause to
be served on such person, partnership, or corporation an order requiring such person,
partnership, or corporation to cease and desist from using such method of competition or
such act or practice. Until the expiration of the time allowed for filing a petition for
review, if no such petition has been duly filed within such time, or, if a petition for
review has been filed within such time then until the record in the proceeding has been
filed in a court of appeals of the United States, as hereinafter provided, the Commission
may at any time, upon such notice and in such manner as it shall deem proper, modify or
set aside, in whole or in part, any report or any order made or issued by it under this
section. After the expiration of the time allowed for filing a petition for review, if no
such petition has been duly filed within such time, the Commission may at any time, after
notice and opportunity for hearing, reopen and alter, modify, or set aside, in whole or in
part any report or order made or issued by it under this section, whenever in the opinion
of the Commission conditions of fact or of law have so changed as to require such action
or if the public interest shall so require, except that (1) the said person, partnership,
or corporation may, within sixty days after service upon him or it of said report or order
entered after such a reopening, obtain a review thereof in the appropriate court of
appeals of the United States, in the manner provided in subsection (c) of this section;
and (2) in the case of an order, the Commission shall reopen any such order to consider
whether such order (including any affirmative relief provision contained in such order)
should be altered, modified, or set aside, in whole or in part, if the person,
partnership, or corporation involved files a request with the Commission which makes a
satisfactory showing that changed conditions of law or fact require such order to be
altered, modified, or set aside, in whole or in part. The Commission shall determine
whether to alter, modify, or set aside any order of the Commission in response to a
request made by a person, partnership, or corporation under paragraph [1]
(2) not later than 120 days after the date of the filing of such request.
(c) Review of order; rehearing
Any person, partnership, or corporation required by an order of the Commission to cease
and desist from using any method of competition or act or practice may obtain a review of
such order in the court of appeals of the United States, within any circuit where the
method of competition or the act or practice in question was used or where such person,
partnership, or corporation resides or carries on business, by filing in the court, within
sixty days from the date of the service of such order, a written petition praying that the
order of the Commission be set aside. A copy of such petition shall be forthwith
transmitted by the clerk of the court to the Commission, and thereupon the Commission
shall file in the court the record in the proceeding, as provided in section 2112 of title
28.
Upon such filing of the petition the court shall have jurisdiction of the proceeding
and of the question determined therein concurrently with the Commission until the filing
of the record and shall have power to make and enter a decree affirming, modifying, or
setting aside the order of the Commission, and enforcing the same to the extent that such
order is affirmed and to issue such writs as are ancillary to its jurisdiction or are
necessary in its judgement to prevent injury to the public or to competitors pendente
lite. The findings of the Commission as to the facts, if supported by evidence, shall be
conclusive. To the extent that the order of the Commission is affirmed, the court shall
thereupon issue its own order commanding obedience to the terms of such order of the
Commission. If either party shall apply to the court for leave to adduce additional
evidence, and shall show to the satisfaction of the court that such additional evidence is
material and that there were reasonable grounds for the failure to adduce such evidence in
the proceeding before the Commission, the court may order such additional evidence to be
taken before the Commission and to be adduced upon the hearing in such manner and upon
such terms and conditions as to the court may seem proper. The Commission may modify its
findings as to the facts, or make new findings, by reason of the additional evidence so
taken, and it shall file such modified or new findings, which, if supported by evidence,
shall be conclusive, and its recommendation, if any, for the modification or setting aside
of its original order, with the return of such additional evidence. The judgment and
decree of the court shall be final, except that the same shall be subject to review by the
Supreme Court upon certiorari, as provided in section 1254 of title 28.
(d) Jurisdiction of court
Upon the filing of the record with it the jurisdiction of the court of appeals of the
United States to affirm, enforce, modify, or set aside orders of the Commission shall be
exclusive.
(e) Exemption from liability
No order of the Commission or judgement of court to enforce the same shall in anywise
relieve or absolve any person, partnership, or corporation from any liability under the
Antitrust Acts.
(f) Service of complaints, orders and other processes; return
Complaints, orders, and other processes of the Commission under this section may be
served by anyone duly authorized by the Commission, either (a) by delivering a copy
thereof to the person to be served, or to a member of the partnership to be served, or the
president, secretary, or other executive officer or a director of the corporation to be
served; or (b) by leaving a copy thereof at the residence or the principal office or place
of business of such person, partnership, or corporation; or (c) by mailing a copy thereof
by registered mail or by certified mail addressed to such person, partnership, or
corporation at his or its residence or principal office or place of business. The verified
return by the person so serving said complaint, order, or other process setting forth the
manner of said service shall be proof of the same, and the return post office receipt for
said complaint, order, or other process mailed by registered mail or by certified mail as
aforesaid shall be proof of the service of the same.
(g) Finality of order
An order of the Commission to cease and desist shall become final -
(1) Upon the expiration of the time allowed for filing a petition for review, if no
such petition has been duly filed within such time; but the Commission may thereafter
modify or set aside its order to the extent provided in the last sentence of subsection
(b).
(2) Except as to any order provision subject to paragraph (4), upon the sixtieth day
after such order is served, if a petition for review has been duly filed; except that any
such order may be stayed, in whole or in part and subject to such conditions as may be
appropriate, by -
(A) the Commission;
(B) an appropriate court of appeals of the United States, if
(i) a petition for review of such order is pending in such court, and
(ii) an application for such a stay was previously submitted to the Commission and the
Commission, within the 30-day period beginning on the date the application was received by
the Commission, either denied the application or did not grant or deny the application; or
(C) the Supreme Court, if an applicable petition for certiorari is pending.
(3) For purposes of subsection (m)(1)(B) of this section and of section 57b(a)(2) of
this title, if a petition for review of the order of the Commission has been filed -
(A) upon the expiration of the time allowed for filing a petition for certiorari, if
the order of the Commission has been affirmed or the petition for review has been
dismissed by the court of appeals and no petition for certiorari has been duly filed;
(B) upon the denial of a petition for certiorari, if the order of the Commission has
been affirmed or the petition for review has been dismissed by the court of appeals; or
(C) upon the expiration of 30 days from the date of issuance of a mandate of the
Supreme Court directing that the order of the Commission be affirmed or the petition for
review be dismissed.
(4) In the case of an order provision requiring a person, partnership, or corporation
to divest itself of stock, other share capital, or assets, if a petition for review of
such order of the Commission has been filed
(A) upon the expiration of the time allowed for filing a petition for certiorari, if
the order of the Commission has been affirmed or the petition for review has been
dismissed by the court of appeals and no petition for certiorari has been duly filed;
(B) upon the denial of a petition for certiorari, if the order of the Commission has
been affirmed or the petition for review has been dismissed by the court of appeals; or
(C) upon the expiration of 30 days from the date of issuance of a mandate of the
Supreme Court directing that the order of the Commission be affirmed or the petition for
review be dismissed.
(h) Modification or setting aside of order by Supreme Court
If the Supreme Court directs that the order of the Commission be modified or set aside,
the order of the Commission rendered in accordance with the mandate of the Supreme Court
shall become final upon the expiration of thirty days from the time it was rendered,
unless within such thirty days either party has instituted proceedings to have such order
corrected to accord with the mandate, in which event the order of the Commission shall
become final when so corrected.
(i) Modification or setting aside of order by Court of Appeals
If the order of the Commission is modified or set aside by the court of appeals, and if
(1) the time allowed for filing a petition for certiorari has expired and no such petition
has been duly filed, or (2) the petition for certiorari has been denied, or (3) the
decision of the court has been affirmed by the Supreme Court, then the order of the
Commission rendered in accordance with the mandate of the court of appeals shall become
final on the expiration of thirty days from the time such order of the Commission was
rendered, unless within such thirty days either party has instituted proceedings to have
such order corrected so that it will accord with the mandate, in which event the order of
the Commission shall become final when so corrected.
(j) Rehearing upon order or remand
If the Supreme Court orders a rehearing; or if the case is remanded by the court of
appeals to the Commission for a rehearing, and if (1) the time allowed for filing a
petition for certiorari has expired, and no such petition has been duly filed, or (2) the
petition for certiorari has been denied, or (3) the decision of the court has been
affirmed by the Supreme Court, then the order of the Commission rendered upon such
rehearing shall become final in the same manner as though no prior order of the Commission
had been rendered.
(k) ''Mandate'' defined
As used in this section the term ''mandate'', in case a mandate has been recalled prior
to the expiration of thirty days from the date of issuance thereof, means the final
mandate.
(l) Penalty for violation of order; injunctions and other appropriate equitable relief
Any person, partnership, or corporation who violates an order of the Commission after
it has become final, and while such order is in effect, shall forfeit and pay to the
United States a civil penalty of not more than $10,000 for each violation, which shall
accrue to the United States and may be recovered in a civil action brought by the Attorney
General of the United States. Each separate violation of such an order shall be a separate
offense, except that in a case of a violation through continuing failure to obey or
neglect to obey a final order of the Commission, each day of continuance of such failure
or neglect shall be deemed a separate offense. In such actions, the United States district
courts are empowered to grant mandatory injunctions and such other and further equitable
relief as they deem appropriate in the enforcement of such final orders of the Commission.
(m) Civil actions for recovery of penalties for knowing violations of rules and cease
and desist orders respecting unfair or deceptive acts or practices; jurisdiction; maximum
amount of penalties; continuing violations; de novo determinations; compromise or
settlement procedure (1)
(A) The Commission may commence a civil action to recover a civil penalty in a district
court of the United States against any person, partnership, or corporation which violates
any rule under this chapter respecting unfair or deceptive acts or practices (other than
an interpretive rule or a rule violation of which the Commission has provided is not an
unfair or deceptive act or practice in violation of subsection (a)(1) of this section)
with actual knowledge or knowledge fairly implied on the basis of objective circumstances
that such act is unfair or deceptive and is prohibited by such rule. In such action, such
person, partnership, or corporation shall be liable for a civil penalty of not more than
$10,000 for each violation.
(B) If the Commission determines in a proceeding under subsection (b) of this section
that any act or practice is unfair or deceptive, and issues a final cease and desist
order, other than a consent order, with respect to such act or practice, then the
Commission may commence a civil action to obtain a civil penalty in a district court of
the United States against any person, partnership, or corporation which engages in such
act or practice -
(1) after such cease and desist order becomes final (whether or not such person,
partnership, or corporation was subject to such cease and desist order), and
(2) with actual knowledge that such act or practice is unfair or deceptive and is
unlawful under subsection (a)(1) of this section. In such action, such person,
partnership, or corporation shall be liable for a civil penalty of not more than $10,000
for each violation.
(C) In the case of a violation through continuing failure to comply with a rule or with
subsection (a)(1) of this section, each day of continuance of such failure shall be
treated as a separate violation, for purposes of subparagraphs (A) and (B). In determining
the amount of such a civil penalty, the court shall take into account the degree of
culpability, any history of prior such conduct, ability to pay, effect on ability to
continue to do business, and such other matters as justice may require.
(1) If the cease and desist order establishing that the act or practice is unfair or
deceptive was not issued against the defendant in a civil penalty action under paragraph
(1)(B) the issues of fact in such action against such defendant shall be tried de novo.
Upon request of any party to such an action against such defendant, the court shall also
review the determination of law made by the Commission in the proceeding under subsection
(b) of this section that the act or practice which was the subject of such proceeding
constituted an unfair or deceptive act or practice in violation of subsection (a) of this
section.
(2) The Commission may compromise or settle any action for a civil penalty if such
compromise or settlement is accompanied by a public statement of its reasons and is
approved by the court.
(n) Standard of proof; public policy consideration
The Commission shall have no authority under this section or section 57a of this title
to declare unlawful an act or practice on the grounds that such act or practice is unfair
unless the act or practice causes or is likely to cause substantial injury to consumers
which is not reasonably avoidable by consumers themselves and not outweighed by
countervailing benefits to consumers or to competition. In determining whether an act or
practice is unfair, the Commission may consider established public policies as evidence to
be considered with all other evidence. Such public policy considerations may not serve as
a primary basis for such determination.