Which venture would be subject to the requirements of Section 5 of the Federal Trade Commission Act?
Which venture would be subject to the requirements of Section 5 of the Federal Trade Commission Act?
Section 5 of the Federal Trade Commission Act applies to all persons, partnerships, or corporations engaged in commerce, excluding specific exempt entities such as banks, common carriers, and nonprofits. A local nonprofit charity (A) is exempt, a national bank (C) is also exempt, and a city bus system (D) falls under common carriers which are exempt. An online merchant’s free shipping offer (B) is a commercial venture engaged in interstate commerce and is subject to the requirements of Section 5.
Answer is B through the simple process of elimination and the right answer remains. A and D are local issues (FTC), so federal commerce jurisdiction. FTC doesn't have jurisdiction over banks, so eliminate C. B fits because it is interstate commerce that affects potentially anyone, anywhere in the US. Keep in mind it's only asking what "venture" is subject to FTC regulation, not what venture violated FTC regulations so don't bother trying to figure out if the venture did something wrong.
Section 5 of the FTC Act applies to unfair and deceptive practices “in commerce,” and does not apply to nonprofit organizations. The commission’s powers also do not extend to certain industries, including banks, other federally regulated financial institutions, and common carriers such as the transportation and communications industries.