Asked by Moses Amoxx on Jul 04, 2024
Verified
Miracle Pill.Katie advertised that she had developed a pill for women that would result in weight loss,wrinkle loss,and improved vitality; and for men would result in all those things,plus hair growth.Her television advertisement showed miracle results allegedly obtained by consumers.Katie cautioned,however,that ingestion of the pill for six months was required before results would be evident.The pill was wildly popular.The Federal Trade Commission,however,investigated and determined that Katie had failed to have a reasonable basis for the claims she made in advertisements.Katie claimed that she was merely involved in the use of generalities and clear exaggerations.The Federal Trade Commission disagreed and issued a formal administrative complaint against her.After a hearing,the Federal Trade Commission issued an order requiring that Katie stop advertising and selling the pills.After losing all appeals,Katie continued selling the pills until she was fined by the Federal Trade Commission.She has since left the country and cannot be located.If a company violates a cease-and-desist order issued by the Federal Trade Commission and upheld by the courts,which of the following is the fine that the Federal Trade Commission may impose?
A) Up to $3,000 per violation
B) Up to $5,000 per violation
C) Up to $10,000 per violation
D) Up to $50,000 per violation
E) Up to $100,000 per violation
Cease-and-Desist Order
A legal injunction ordering an individual or organization to stop engaging in a specified activity or behavior.
Federal Trade Commission
A U.S. federal agency responsible for protecting consumers and promoting competition by preventing anticompetitive, deceptive, and unfair business practices.
Reasonable Basis
A logical, fact-based foundation for a belief, action, or decision, indicating that due diligence has been exercised.
- Understand the process of issuing, appealing, and enforcing cease-and-desist orders by the FTC.
Verified Answer
Learning Objectives
- Understand the process of issuing, appealing, and enforcing cease-and-desist orders by the FTC.
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