United States: 50-State Survey

Since its inception in 1914, the Federal Trade Commission (FTC) has served the function of protecting consumers and promoting competition among businesses in the United States. In its original form, the FTC Act was limited in scope, proscribing only "unfair methods of competition." 1 Thus, under the original provisions of the Act, the FTC had the power to restrict only those practices that were unfair to a business's competitors. 2 However, in 1938, the WheelerLea Act amended Section 5 of the FTC Act to include a more general prohibition against "unfair or deceptive acts or practices in commerce." 3 This amendment gave the FTC jurisdiction over a broader range of business practices that harmed consumers, regardless of whether they were deemed unfair to competitors. Following the amendment of Section 5 of the FTC Act, state legislatures began to adopt their own Consumer Protection Acts (CPAs) as a way of complementing the FTC's enforcement authority while providing citizens with the private right of action that the FTC Act lacked. 4 This surge of state legislative action reached a crescendo in the late 1960s and early 1970s, and by 1981 every state had adopted some form of CPA. 5 Many of these CPAs can be traced to one of three model acts: the Uniform Deceptive Trade Practices Act, the Unfair Trade Practices and Consumer Protection Law (UTPCPL), and the Uniform Consumer Sales Practices Act. 6

The UTPCPL is of particular interest, not only because it was the model act adopted by the majority of states, but also because it was created as a collaborative effort between the Council of State Governments and the FTC itself. 7 The UTPCPL offered three alternative formats for defining the scope of activities to be regulate, only two of which were ever adopted by state legislatures. 8 The FTC's influence in the drafting of the UTPCPL is clearly demonstrated in the first format, which has come to be known as the "Little FTC Act." This format simply borrows the FTC Act's broad prohibition against "unfair methods of competition and unfair or deceptive acts or practices," without providing any illustrative examples of prohibited acts. 9 Section 3 of the UTPCPL established an even stronger link between the FTC Act and state CPAs by instructing that "due consideration and great weight shall be given to the interpretations of the Federal Trade Commission and the federal courts relating to Section 5(a)(1) of the Federal Trade Commission Act . . . "10

Today, the CPAs of 15 states contain the same broad prohibitions against both "unfair methods of competition" and "unfair or deceptive acts or practices" that appear in Section 5(a) (1) of the FTC Act. In a way, these CPAs could be considered the "true" Little FTC Acts, as they provide no further explanation for what specific conduct constitutes "unfair or deceptive acts or practices." Five other states have adopted the FTC Act's prohibition against unfair or deceptive acts or practices but excluded the prohibition against methods of unfair competition. An additional 14 states have supplemented the FTC Act's broad prohibitions with more precise provisions designed to restrict more specific conduct. But perhaps most importantly, 30 states and the District of Columbia have explicitly instructed that their CPAs should be interpreted consistently with the interpretations given by the FTC and the federal courts to Section 5(a)(1) of the FTC Act. Thus, while CPAs are by no means uniform from state to state, it is clear that a majority of states consider their CPAs to be Little FTC Acts for all practical purposes, even if their core provisions do not mirror those of the FTC Act.

The objective of this survey of state CPAs is to identify the states that have tied their definition of "unfair or deceptive acts or practices" to that of the FTC Act and to highlight the different types of prohibitions found in the core provisions of each state's CPA.

Alabama

FTC Act Reference: "It is the intent of the Legislature that in construing Section 8-19-5, due consideration and great weight shall be given where applicable to interpretations of the [FTC] and the federal courts relating to [Section 5(a)(1)], as from time to time amended." Ala. Code § 8-19-6.

Prohibited Conduct: Twenty-six specific prohibited acts, with a "catch-all" provision that prohibits "[e] ngaging in any other unconscionable, false, misleading, or deceptive act or practice in the conduct of trade or commerce." Ala. Code § 8-19-5.

Alaska

FTC Act Reference: "In interpreting AS 45.50.471 due consideration and great weight should be given to the interpretations of [Section 5(a)(1)] . . . " Alaska Stat. § 45.50.545.

Prohibited Conduct: General prohibition against "unfair methods of competition and unfair or deceptive acts or practices," with 57 examples of specific prohibited acts. Alaska Stat. § 45.50.471.

Arizona

FTC Act Reference: "It is the intent of the legislature, in construing subsection A, that the courts may use as a guide interpretations given by the [FTC] and the federal courts to 15 United States Code §§ 45, 52, and 55(a)(1)." Ariz. Rev. Stat. Ann. § 44-1522(C).

Prohibited Conduct: General prohibition against deceptive or unfair acts or practices, but no prohibition against methods of unfair competition. Ariz. Rev. Stat. Ann. § 44-1522(A).

Arkansas

FTC Act Reference: None.

Prohibited Conduct: Eleven illustrative examples of prohibited "deceptive and unconscionable trade practices." Ark. Code Ann. § 4-88-107.

California

FTC Act Reference: The California Unfair Competition Law does not explicitly reference the FTC Act, but California courts have held that federal court decisions and FTC interpretations of the FTC Act are persuasive authority for construing the state act. See People ex rel. Mosk v. Nat'l Research Co. of Cal., 201 Cal.App.2d 765, 772-73 (1962) ("Although the wordings of the state and federal statutes are not identical, the differences are not of a degree to impair comparison . . . In view of the similarity of the language and the obvious identity of purpose of the two statutes, decisions of the federal court on the subject are more than ordinarily persuasive.").

Prohibited Conduct: General prohibition against "any unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising . . ." Cal. Bus. & Prof. Code § 17200.

Colorado

FTC Act Reference: None.

Prohibited Conduct: Fifty-two specific examples of "deceptive trade practice[s]." Colo. Rev. Stat. Ann. § 6-1-105.

Connecticut

FTC Act Reference: "It is the intent of the legislature that in construing subsection (a) of this section, the commissioner and the courts of this state shall be guided by interpretations given by the [FTC] and the federal courts to [Section 5(a)(1)], as from time to time amended." Conn Gen. Stat. Ann. § 42-110b(b).

Prohibited Conduct: General prohibition against "unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." Conn. Gen. Stat. Ann. § 42-110b(a).

Delaware

FTC Act Reference: None

Prohibited Conduct: Twelve specific examples of "deceptive trade practice[s]." Del. Code Ann. tit. 6, § 2532.

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