Which federal statute makes it unlawful for a company in interstate commerce to commit unfair trade practices?

Study for the CLEP Business Law Test. Engage with flashcards and multiple choice questions, each question has hints and explanations. Prepare effectively for your exam!

The Federal Trade Commission Act of 1914 is the correct answer because it specifically addresses the regulation of unfair trade practices in interstate commerce. This statute established the Federal Trade Commission (FTC), which has the authority to enforce laws against deceptive or unfair business practices. Under this act, the FTC is empowered to investigate and take action against companies that engage in practices deemed harmful to competition or consumers.

While the Sherman Act focuses on antitrust laws, prohibiting monopolistic practices and conspiracies that restrain trade, it does not specifically target unfair trade practices in the same manner as the FTC Act. The Clayton Act, on the other hand, addresses specific anti-competitive practices but does not function as a general prohibition against unfair trade practices. Consequently, the Federal Trade Commission Act is the appropriate statute to reference when discussing unfair trade practices within interstate commerce.

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