Only the Federal Trade Commission (FTC) can bring a federal cause of action against a company whose business practices or actions deceive consumers. However, the FTC's power is limited; it can intervene on behalf of consumers only when there is a pattern of misconduct by the business that threatens the public interest. But where the scams themselves are difficult to spot, patterns may be virtually impossible to establish. Moreover, even successful FTC actions may yield little in the way of preventative or compensatory benefit for the individual user.
My aim in this Note, therefore, is to offer one possible means of providing a happy ending to the story of deceptive trade practices on the Internet. The first section briefly addresses the background of the Internet, its technical aspects, and the current state of Internet regulation. Next, an overview of the FTC's "deceptive trade practices" cause of action, using the recent Federal Trade Commission v. Pereira case will give an extended illustration of not only the mechanics of modern cyber-scams, but also the efficacy of current regulatory and protective regimes aimed at stopping them. Finally, I will propose that the FTC Act should be amended to give private citizens a cause of action against deceptive trade practices and fraud on the Internet, and that such an amendment should offer enhanced damages and attorneys' fees in order to encourage use of the action. This private cause of action would broaden the regulatory ability of the Act without risking the vibrant and competitive free market that presently exists on the Internet.
Cyberjacking, Mouse trapping, and the FTC Act: Are Federal Consumer Protection Laws Helping or Hurting Online Consumers?,
3 Vanderbilt Journal of Entertainment and Technology Law
Available at: https://scholarship.law.vanderbilt.edu/jetlaw/vol3/iss2/7