Constraining the Federal Trade Commission: The Case of Occupational Regulation

Finding that much of state regulation of occupations restricts entry into the market and thereby limits the choices that consumers can make for themselves, the authors examine FTC efforts to change this regulation. The authors consider the Commission itself, the Congress, and the courts to analyze the likely outcome of the FTC's efforts. Because the FTC has had a long history of hostility toward market forces, the authors find the agency likely to impose some new rules upon occupations. After arguing that Congress' power to control FTC action is ineffective, absent the rare situation of a hostile political environment, the authors state that a "new administrative law" is developing that provides increased judicial scrutiny of agency rulemaking.

This more stringent judicial review makes deregulation easier because it facilitates removal of licensure programs and makes imposition of new regulation more difficult. The authors urge that the courts end anti-consumer rulemaking by requiring that the. benefits from actions mandated by agency rules exceed their costs, thereby achieving the actual goal of the FTC: bettering the welfare of the consumer.