The Federal Trade Commission Act is a 1914 federal law at the center of U.S. advertising and consumer-protection enforcement. Its ban on unfair or deceptive acts or practices was added in 1938, and the Federal Trade Commission (FTC) enforces it. This page is for owners in India, Canada or the United States who sell to U.S. consumers from the U.S. or abroad.
What does the Federal Trade Commission Act cover?
| Topic | Answer |
|---|---|
| Size threshold | No cutoff in the statute's text |
| Excluded from FTC authority | Packers and Stockyards Act entities, air carriers covered by federal aviation law, regulated common carriers, federal credit unions, certain savings institutions, and banks |
| Foreign commerce | Included, under wording set for repeal in 2027, when it causes reasonably foreseeable U.S. injury or involves material conduct here |
What does it mean for a foreign-owned or cross-border business?
| Situation | What the law says | What to check |
|---|---|---|
| U.S. company owned from Pune or Toronto, advertising to U.S. shoppers | The text sets no size or ownership test | Proof on file for each ad claim |
| Seller based in India or Canada, selling online to U.S. buyers | Foreign commerce counts when it causes reasonably foreseeable U.S. injury or involves material conduct here | Where buyers live and where ad work happens. Enforcement across borders is for counsel |
| Paid influencers or reviewers abroad | The FTC's Endorsement Guides call for clear disclosure of payments, free products and ties the audience would not expect (16 CFR 255.5) | Contracts requiring clear disclosure |
| Online subscription or free trial sold to U.S. buyers | Disclose material terms before taking billing details, get express consent, offer a simple way to stop charges (15 U.S.C. 8403) | The cancel path, tested as a U.S. buyer |
The rules, numbers and checklist page has details. Marketing email falls under CAN-SPAM, tax preparers' data duties under GLBA and HIPAA, and Illinois has its own Consumer Fraud Act. For foreign founders see Indian companies entering the U.S., Canadian companies entering the U.S. and U.S. sales tax for foreign sellers.
Frequently asked questions
Can the FTC Act reach a business based outside the United States?
It can, when the practice causes reasonably foreseeable injury in the United States or involves material conduct here. An attorney can say whether it reaches your facts.
Official sources
- Federal Trade Commission: Federal Trade Commission Act
- Cornell Legal Information Institute: 15 U.S.C. 45, unfair methods of competition unlawful
- eCFR: 16 CFR Part 255, Endorsement Guides
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.