o "a level (Exhibit 21-7). The Division of Marketing Practices of the Bureau of Competition engages in activities that are related to various marketing and warranty practices such as fraudulent telemarketing schemes, 900-number programs, and disclosures relating to franchise and business opportunities.
The FTC has had the power to regulate advertising since passage of the Wheeler-Lea Amendment. However, not until the early 1970s—following criticism of the commission in a book by "Nader's Raiders" and a special report by the American Bar Association citing its lack of action against deceptive promotional practices—did the FTC become active in regulating advertising.35 The authority of the FTC was increased considerably throughout the 1970s. The Magnuson-Moss Act of 1975, an important piece of legislation, dramatically broadened the FTC's powers and substantially increased its budget. The first section of the act dealt with consumers' rights regarding product warranties; it allowed the commission to require restitution for deceptively written warranties where the consumer lost more than $5. The second section, the FTC Improvements Act, empowered the FTC to establish trade regulation rules (TRRs), industrywide rules that define unfair practices before they occur.
During the 1970s, the FTC made enforcement of laws regarding false and misleading advertising a top priority. Several new programs were instituted, budgets were increased, and the commission became a very powerful regulatory agency. However, many of these programs, as well as the expanded powers of the FTC to develop regulations on the basis of "unfairness," became controversial. At the root of this controversy is the fundamental issue of what constitutes unfair advertising.
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