Federal Trade Commision
Site Visit Report
The FTC has five Commissioners, 1,000 employees and a $100 million annual budget. It has three Bureaus (Competition, Consumer Protection, and Economics) and two missions:
- to maintain competition - by ensuring free markets and eliminating noncompetitive business practices; and
- to protect consumers - by ensuring fair markets and consumer information.
Formerly, FTC would focus on whichever mission was most crucial to its stakeholders at the time. Now the agency is aiming for a unified process and structure, so both missions are equal in size, budget, and staffing.
The Bureau of Competition's mission is law enforcement, not regulation. Competition among producers provides consumers the best possible choice of products and services at competitive prices and quality. The Bureau shares jurisdiction with the Department of Justice's antitrust section.
Last year, FTC took action on approximately 33 out of 4,000 proposed mergers. In addition, FTC challenged a number of nonmerger anticompetitive actions, specifically, Intel Corporation, and companies that had fixed prices for laser eye surgery procedures. One of FTC's GPRA goals is to interfere as little as possible with the market.
FTC talks with DOJ regularly to make sure that they're measuring their performance in the same or equivalent ways. For example, to measure the value of its antitrust enforcement, FTC tries to predict what the harm to the economy would have been if it had allowed anticompetitive mergers to go through. When more complete data is unavailable, FTC conservatively assumes that a challenged merger would have raised prices by one percent for a two-year period. Consumer savings from antitrust actions would be estimated for that period by multiplying the one-percent price increase by dollar sales for the product market at issue. This only includes the savings from preventing price increases and not the savings from protecting innovation.
The Bureau of Consumer Protection monitors advertising, credit practices, and marketing practices (internet, telemarketing, and direct mail), and also does enforcement, strategic planning, and consumer outreach. The Bureau monitors consumer complaints through its Consumer Response Center, which handles complaints by phone, letter, and e-mail; www.consumer.gov, a joint website with 47 other government offices; and Consumer Sentinel, an American/Canadian shared database. FTC measures the success of its consumer protection mission through the number of redress orders, the amount of money seized by shutting down scams, and the increase in Consumer Response Center phone calls and website hits.
FTC also comments on regulations by other agencies. This role bridges both of its missions and FTC tracks the outcomes of its advocacy.
For each mission, FTC developed 5-6 key measures that its stakeholders would be interested in. Originally FTC had developed several more goals, but has since reduced its number of measures. The key measure for both missions is savings to consumers - this year's goal is for each mission to achieve $200 million in savings.
FTC's measures have both staff input and Commissioner support. Like many regulatory agencies, FTC also measures its business results (e.g., the average time needed to review merger applications and the number of consumer dollars saved due to FTC actions).
FTC gets stakeholder feedback through comments sent to its website, and from trade associations, consumer groups, and the antitrust bar (the American Bar Association and DOJ's antitrust section), as well as through its collaborative rulemaking projects and cooperation with State Attorneys General. FTC also does industry studies to evaluate the effectiveness of its competition and consumer missions, and has paperwork clearance from OMB to do a special study on divestitures as an antitrust remedy which will be made available to the public for comment.
Managers held discussion sessions, focus groups, and brainstorming meetings to develop the strategic plan and communicate the plan to employees. A culture change was necessary to overcome employee resistance to working in teams in a strategic way and to flattening the hierarchy by planning collaboratively.
There are few customer/employee goals in the strategic plan, since the plan was defined according to the main missions of the agency. FTC's strategic plan, annual report, annual fraud report, and other information are all available on its website.
All planning is done Commission-wide by a strategic planning task force on a consensus basis. Each mission provides information to the budget office for dissemination.
To date FTC has no formal feedback mechanisms. In its strategic plan, FTC lists a customer survey as a 1999-2000 goal, but hasn't done one yet because of paperwork restrictions and privacy concerns. FTC has done extensive work with stakeholders such as the ABA and State Attorneys General.
FTC has difficulty identifying its customers. In many cases the affected marketplace is indefinable, so FTC measures the increase in compliance, not the percentage of overall compliance. FTC is also conservative in estimating the benefits from deterring monopolies and fraud.
Overall, morale is good because employees feel that they touch people in their everyday lives, even though the caseload has gone up while the size of the workforce has remained static. FTC has slowed down its turnover rate of attorneys and economists leaving for the private sector.
FTC stresses team/leadership skills in its training, and rewards employees for teamwork. Reengineering and streamlining are now part of the agency culture; employees are rewarded for "improving the workplace."
The Partnership Council has members from all employee levels and the union. It meets quarterly to work on employee issues like telecommuting and diversity. There's also FTC Daily, an e-zine that is mailed to each employee, which covers everything from the latest press releases to the day's cafeteria menu.
In addition to traditional rewards, managers are authorized to give non-monetary rewards of up to $50 in value (e.g., flowers, tickets), and to vary employee assignments (e.g., an economist who had been working on merger investigations would be allowed to switch to research for a limited period of time).
FTC economists benchmark with their academic counterparts and with consultants. Through litigation, FTC is constantly benchmarking against its opponents' lawyers and economists.
Consumer response center - nationwide comprehensive consumer complaint database.
Consumer sentinel - consumer fraud call center shared with Canada, state and local governments, and law enforcement agencies.
www.consumer.gov - Hammer Award -winning FDA/FTC one stop site
Collaborative sweeps - quick, targeted law enforcement actions with partners like DOJ, the FBI, the U.S. Postal Inspection Service, state Attorneys General, and private groups.
Non-monetary employee rewards and varying assignments-allow managers to be flexible and creative.
Daily e-mail updates - keep employees informed and facilitate buy-in.
Teaser sites - FTC-created "scam" websites that link to consumer education information.
Regulatory agencies have to plan so that they can target those cases where they can be the most effective.