US Code as of: 01/05/99
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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 -
- (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.
- (2)
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.
- (3)
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.
Footnotes
[1] So in original. Probably should be ''clause''.