Federal Trade Commission
 

Performance and Accountability Report 

Fiscal Year 2008 
The cover page shows the Federal Trade Commission’s headquarters building at 600 Pennsylvania Avenue, 

NW in Washington, DC. President Franklin D. Roosevelt personally laid the building’s cornerstone in 1937. 

Photographs throughout the FY 2008 PAR are of this historic building and its Art Deco reliefs depicting 

aspects of trade. 
 

 

 

 

 

 

 

 

 

 

 

 

 

About this Report 


T

he Federal Trade Commission’s (FTC) FY 2008 Performance and Accountability 

Report (PAR) provides the results of the agency’s program and financial performance 

and demonstrates to the Congress, the President, and the public the FTC’s 

commitment to its mission and accountability over the resources entrusted to it. This 

report, available at www.ftc.gov/par, includes information that satisfies the reporting 

requirements contained in the following legislation: 

◆ Federal Managers’ Financial Integrity Act of 1982 


◆ Government Performance and Results Act of 1993 


◆ Government Management Reform Act of 1994 


◆ Reports Consolidation Act of 2000 


◆ Accountability of Tax Dollars Act of 2002 


◆ Improper Payments Information Act of 2002
 

The performance and financial information contained in this report is summarized in a 

“Citizens’ Report,” available at www.ftc.gov/par in December 2008. 

CERTIFICATE OF 

 EXCELLENCE IN 

ACCOUNTABILITY 

REPORTING® 

Presented to the 

In recognition of your outstanding efforts 

preparing FTC’s Performance and 

Accountability Report for the fiscal 

year ended September 30, 2007. 

A Certificate of Excellence in Accountability Reporting is presented 

by AGA to federal government agencies whose annual 

Performance and Accountability Reports achieve the 

highest standards demonstrating accountability 

and communicating results. 

U.S. Federal Trade 

Commission 

Relmond P. Van Daniker, DBA, CPA 

Executive Director, AGA 

John H. Hummel, CGFM 

Chair, Certificate of Excellence 

in Accountability Reporting Board 

The FTC received the Association of Government Accountants’ Certificate 

of Excellence in Accountability Reporting for an outstanding FY 2007 PAR. 

About This Report i 
 

 

 

 

How This Report is Organized
 

This report includes three major sections plus supplemental information. 

Management’s 

Discussion and Analysis 

Management’s Discussion and Analysis 

The Management’s Discussion and Analysis (MD&A) Section provides an overview 

of the FTC’s mission and organization, a key performance measures overview, 

mission challenges, and financial highlights. 

Performance Section 

Performance Section 

The Performance Section explains the FTC’s performance relative to its strategic 

goals and objectives, includes an overview of how the performance data are verified 

and validated, and summarizes program evaluations performed during the year. 

Financial Section 

Financial Section 

The Financial Section provides financial details, including the independent auditor’s 

report and audited financial statements. The Financial Section also provides 

management and performance challenges identified by the Inspector General 

along with the Chairman’s response and summary of management assurances. 

Appendices

Appendices 

Appendix A is a list of acronyms used throughout this report, and Appendix B is 

contact information and acknowledgements. 

ii Performance and Accountability Report—Fiscal Year 2008 
FTC At-A-Glance iii 

The FTC At-A-Glance 

History 

◆ The federal government created the Bureau of Corporations in 1903. In 1914, President 

Woodrow Wilson signed the Federal Trade Commission Act into law, and the Bureau of 

Corporations became the Federal Trade Commission (FTC). 

Laws Enforced 

◆ The FTC is a law enforcement agency with both consumer protection and competition 

jurisdiction in broad sectors of the economy. The agency administers a wide variety of laws 

and regulations. Some examples are the Federal Trade Commission Act, Telemarketing Sales 

Rule, Identity Theft Act, Fair Credit Reporting Act, and Clayton Act. 

Did You Know? 

◆ Consumers are affected every day by the FTC’s activities. For example, consumers receive 

fewer telemarketing calls, obtain free credit reports, receive less spam, receive identity theft 

victim assistance, access truthful information about health and weight-loss products, pay lower 

prescription drug prices thanks to the availability of generic drugs, and enjoy competitive 

prices for goods as a result of merger reviews and actions taken by the FTC. 

◆ The agency manages the National Do Not Call (DNC) Registry, which gives consumers the 

opportunity to limit telemarketing calls. As of October 1, 2008, there were more than 172 

million active registrations on the DNC Registry. 

◆ Over the past three years, the FTC has saved consumers more than $1.28 billion in economic 

injury by stopping illegal practices. The FTC’s jurisdiction ranges from misleading health claims 

and deceptive lending practices to weight-loss schemes and business opportunity fraud. 

◆ In FY 2008, the FTC took action against mergers likely to harm competition in markets 

with a total of $14.9 billion in sales. The agency’s efforts to maintain aggressive competition 

among sellers benefit consumers through lower prices, higher quality products and services, 

additional choice, and greater innovation. 

◆ The FTC shares the more than 12.2 million fraud, identify theft, financial, and DNC Registry 

complaints it has collected with more than 1,700 other law enforcement agencies across the 

United States, Canada, and Australia via the secure Consumer Sentinel Network website. 

Profile 

◆ The agency is headquartered in Washington, DC, and operates with seven regions across the 

United States. 

◆ The agency had nearly 1,100 full-time equivalent employees at the end of FY 2008. 

◆ Total new budget authority for FY 2008 was $244 million.
 

 

 

 

 

Message from the Chairman
 

I

have had the great fortune to work with the Federal 

Trade Commission (FTC) over intermittent periods 

throughout the past 30 years. The FTC I joined in 

1979 had considerable strength; now the FTC stands 

at the front ranks of the world’s competition policy 

and consumer protection institutions. I believe that 

the FTC truly is one of the great success stories in the 

modern history of public administration. I am pleased 

to present the FTC’s Performance and Accountability 

Report for Fiscal Year 2008. It provides the results of our 

strong program performance and successful financial 

activities over the past year that support our mission. 

The agency’s two strategic goals, protecting consumers 

and maintaining competition, form the core of our 

mission. Each goal is based on four objectives and related 

strategies: (1) identify illegal practices; (2) stop illegal 

practices through law enforcement; (3) prevent consumer injury through education of 

consumers and businesses; and (4) enhance consumer welfare through research, reports, 

advocacy, and international cooperation and exchange. 

These objectives set the course to help us accomplish our mission. We reach out to 

consumers and businesses to help us identify current marketplace trends and challenges. 

We ask them to call our toll-free phone numbers or file complaints online to alert us to illegal 

practices entering the marketplace. We also hold workshops and hearings to which we invite 

consumers, business representatives, academics, and others to discuss the law as well as 

current developments. We work closely with our law enforcement partners, both domestic 

and foreign, to ensure robust enforcement of consumer protection and antitrust laws. We act 

to block mergers that could have anticompetitive effects. Through our consumer and business 

education program, we issue alerts to warn the public of emerging schemes, post web pages, 

publish brochures, and use innovative approaches to reach the public in order to prevent further 

consumer injury. Our extensive education materials are available online in English at www.ftc.gov 

and in Spanish at www.ftc.gov/ojo. 

The FTC has pursued an effective law enforcement program in a dynamic marketplace 

that is increasingly global and characterized by changing technologies. Through the efforts of 

a dedicated staff, the FTC continues to handle a growing workload. In the consumer protection 

area, the Commission is active in a variety of efforts to protect the public from unfair, deceptive, 

and fraudulent practices in the marketplace. The Commission also has an active enforcement 

agenda to promote and protect competition. The Commission scrutinizes mergers in many 

industries, filing actions to enjoin those that are likely to be anticompetitive and ordering 

divestitures, where appropriate, to preserve competition while allowing the beneficial aspects of 

the merger to proceed. 

To accomplish our goals and objectives and build upon our program performance, three of 

our priorities relating to the FTC’s law and economics programs include: 

◆	 To sustain and enhance the agency’s litigation and non-litigation initiatives in sectors 

of the greatest importance to consumers and to overall economic performance. Key 

areas for our attention include health care, prescription drugs, real estate, and high 

William E. Kovacic 

Chairman 

iv Performance and Accountability Report—Fiscal Year 2008 
technology sectors. Another focal point for our attention is the energy sector. The 

Commission continuously examines price movements and other activity through our 

Gasoline and Diesel Price Monitoring Project to identify any conduct that may not 

reflect purely competitive decisions based on the forces of supply and demand. Some 

believe the FTC should be doing more in this area and last December Congress enacted 

the Energy Independence and Security Act of 2007 (EISA). Section 811 of EISA granted 

the Commission authority to promulgate a rule prohibiting the use of manipulative 

or deceptive devices or contrivances in wholesale crude oil, gasoline, and petroleum 

distillate markets. The Commission is now relying on that authority to conduct a 

rulemaking proceeding and expects to complete the process by the end of the year. 

◆	 To undertake an extensive self-assessment of the agency with an eye toward identifying 

how best to improve the FTC’s operations and organization. The FTC has begun a 

project, called The FTC at 100: Into Our Second Century. We are using internal deliberations 

and public consultations at home and abroad to assess what the FTC must do to fulfil 

the ambitions the Congress set for us early in the 20th Century. 

◆	 To pursue innovations in intergovernmental cooperation relating to competition policy 

inside the United States and with our counterpart agencies abroad. 

A critical component of our success is the FTC’s investment in its human capital. As I have 

said in the past, our greatest assets leave every night and we pray they return each morning. 

To meet our goals and address challenges, the FTC continues to attract and retain attorneys, 

economists, and other professionals who possess strong technical skills and experience. 

Furthermore, essential to FTC’s success in gaining organizational excellence is sound financial 

management. The FY 2008 independent financial audit resulted in the FTC’s 12th consecutive 

unqualified opinion, the highest audit opinion available. The independent auditors did not 

identify any material weaknesses, significant deficiencies, or instances of non-compliance with 

laws and regulations. In the Management Assurances section (see p. 22), I provide my assurances 

that FTC has no material weaknesses to report. I am also pleased to report that the FTC financial 

and performance data presented in this report are complete, reliable, and accurate in keeping 

with the guidance from the Office of Management and Budget. 

In accordance with the Reports Consolidation Act of 2000, the Inspector General (IG) 

identified key management and performance challenges facing the agency, and he assessed our 

progress in addressing them. Agency management concurs that the issues identified by the IG 

are key challenges, and with his assessment of our progress. Those challenges and our responses 

are discussed further in the Other Accompanying Information section of this report. Moving 

forward, we will continue our efforts to tackle these matters proactively. 

I look forward to working with agency staff, my fellow commissioners, and FTC stakeholders 

and partners to continue providing high-quality service to the American public. We will report 

our progress and subsequent actions in future Performance and Accountability Reports. 

William E. Kovacic
 

November 14, 2008
 

Message from the Chairman v 
 

Table of Contents
 

About This Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
 

How This Report Is Organized...................................................... ii
 

The FTC At-A-Glance............................................................... iii
 

Message from the Chairman ....................................................... iv
 

MANAGEMENT’S DISCUSSION AND ANALYSIS....................................... 1
 

Mission and Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
 

Vision and Mission Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
 

Our Organization ................................................................. 4
 

Our People ...................................................................... 6
 

Performance Overview........................................................... 7
 

Strategic and Performance Planning Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
 

Performance Measurement Methodology ....................................... 7
 

Strategic Goals and Objectives ................................................. 8
 

Key Performance Measures Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
 

Key Performance Measures Overview ................................................. 9
 

Performance Measures Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
 

Agency Mission Challenges...................................................... 15
 

Management Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
 

Implementation of the Federal Managers’ Financial Integrity Act (FMFIA) at the FTC........... 21
 

Chairman’s FMFIA Statement of Assurance ............................................ 22
 

Summary of Material Weaknesses and Nonconformances................................ 23
 

Financial Highlights ...................................................................25
 

Introduction .................................................................... 25
 

End of Fiscal Year Balances......................................................... 25
 

Financial Analysis ................................................................ 26
 

Limitations of Financial Statements.................................................. 30
 

Financial Management Indicators ................................................... 30
 

PERFORMANCE SECTION.......................................................... 31
 

Introduction to Performance..................................................... 33
 

Verification and Validation of Performance Data.................................... 35
 

Performance Measure Summary Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
 

Strategic Goal #1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
 

vi Performance and Accountability Report—Fiscal Year 2008 
Strategic Goal #2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
 

Summary of Program Evaluations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
 

FINANCIAL SECTION .............................................................. 87
 

Message from the Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
 

Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
 

Principal Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
 

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
 

Other Accompanying Information ............................................... 123
 

Inspector General–Identified Management and Performance Challenges . . . . . . . . . . . . . . . 123
 

Comments on Management Challenges Identified by the Inspector General . . . . . . . . . . . . 127
 

Summary of Financial Statement Audit and Management Assurances . . . . . . . . . . . . . . . . . . 130
 

Improper Payments Information Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
 

Appendices ..................................................................... 133
 

A: Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
 

B: Contact Information and Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
 

Table of Contents vii 

Management’s 

Discussion and Analysis 

 

 

 

 

 

Mission and Organization 

The work of the FTC is critical to protecting and strengthening free and open markets 

and promoting informed consumer choice, both in the United States and around the 

world. The FTC performs its mission through the use of a variety of tools, including law 

enforcement, rulemaking, research, studies on marketplace trends and legal developments, 

and consumer and business education. 

FTC’s Vision 

A U.S. economy characterized by vigorous 

competition among producers and consumer 

access to accurate information, yielding high-quality 

products at low prices and encouraging efficiency, 

innovation, and consumer choice. 

FTC’s Mission 

To prevent business practices that are 

anticompetitive or deceptive or unfair to consumers; 

to enhance informed consumer choice and public 

understanding of the competitive process; and 

to accomplish these missions without unduly 

burdening legitimate business activity.

 Management’s Discussion and Analysis 3 
 

 

Relief detail from the Federal Trade Commission’s 

headquarters building in Washington, DC. 

Our Organization 

Consumers and businesses are likely to be 

more familiar with the work of the FTC than 

they think. In the consumer protection 

area, the care labels in clothes, product warranties, 

or stickers showing the energy costs of home 

appliances illustrate information that is required 

by the FTC. Likewise, businesses must be familiar 

with the laws requiring truthful advertising and 

protecting consumers’ personally identifiable 

information and sensitive health information. These 

laws are administered by the FTC. 

Each year, more people around the globe have 

come to understand that competition among 

independent businesses is good for consumers, 

the businesses themselves, and the economy. 

Competitive markets yield lower prices and 

better quality goods and services, and a vigorous 

marketplace provides the incentive and opportunity for the development of new ideas 

and innovative products and services. Many of the laws governing competition also are 

administered by the FTC. 

The FTC has a long tradition of maintaining a competitive marketplace for both 

consumers and businesses. When the FTC was created in 1914, its purpose was to prevent 

unfair methods of competition in commerce as part of the battle to “bust the trusts.” 

Over the years, the Congress passed additional laws giving the agency greater authority 

over anticompetitive practices. In 1938, the Congress passed a broad prohibition against 

“unfair and deceptive acts or practices.” Since then, the FTC also has been directed to 

administer a wide variety of other consumer protection laws and regulations, including the 

Telemarketing Sales Rule, the Identity Theft Act, and the Equal Credit Opportunity Act. 

The FTC is an independent agency that reports to the Congress on its actions. These 

actions include pursuing vigorous and effective law enforcement; advancing consumers’ 

interests by sharing its expertise with federal and state legislatures and U.S. and international 

government agencies; developing policy and research tools through hearings, workshops, 

and conferences; and creating practical and plain-language educational programs for 

consumers and businesses in a global marketplace with constantly changing technologies. 

4 Performance and Accountability Report—Fiscal Year 2008 
The FTC is headed by a Commission composed of five commissioners, nominated by 

the President and confirmed by the Senate, each serving a seven-year term. The President 

chooses one commissioner to act as Chairman. No more than three commissioners can be 

from the same political party. The FTC’s mission is carried out by three bureaus: the Bureau 

of Consumer Protection, the Bureau of Competition, and the Bureau of Economics. Work is 

aided by offices, including the Office of General Counsel, the Office of Inspector General, 

the Office of International Affairs, the Office of the Executive Director, and seven regions. 

Chairman 

William E. Kovacic 

Commissioner 

Pamela J. Harbour 

Office of Congressional Relations 

Jeanne Bumpus 

Office of Public Affairs 

Claudia Farrell (Acting) 

Office of Inspector General John Seeba 

Office of Administrative Law Judges D. Michael Chappell (Acting) 

Office of the Secretary Donald S. Clark 

Commissioner 

Vacant 

Commissioner 

J. Thomas Rosch 

Commissioner 

Jon Leibowitz 

Office of the 

Executive Director 

Charles Schneider 

Regions 

Bureau of 

Consumer Protection 

Lydia B. Parnes 

Bureau of Economics 

Michael R. Baye 

Bureau of Competition 

David Wales (Acting) 

Chief of Staff 

Sarah Mathias 

Office of General Counsel 

William Blumenthal 

Office of International Affairs 

Randolph W. Tritell 

CIO 

Stanley Lowe 

CFO 

Steven A. Fisher 

Federal Trade Commission

 Management’s Discussion and Analysis 5
 

 

 

 

 

 

 

 

The agency is headquartered in Washington, DC, and operates with seven regions 

across the United States. The graphic below illustrates the locations of the FTC’s regions. 

New York, NY 

Northeast 

(includes Puerto Rico 

and U.S. Virgin Islands) 

East Central 

Midwest 

Chicago, IL 

Seattle, WA 

Northwest (includes Alaska) 

Western (includes Hawaii) 

Los Angeles, CA 

San Francisco, CA 

Southeast 

Atlanta, GA 

Dallas, TX 

Southwest 

Washington, DC 

(Headquarters) 

Cleveland, OH 

Our People 

T

he FTC’s workforce is its greatest asset. The agency’s workforce consists of approximately 

1,100 civil service employees dedicated to addressing the major concerns of American 

consumers. The chart below shows workforce composition by category. 

0

200

400

600

800

1000

1200

2004 2005 2006 2007 2008

Other Professions 

Attorneys 

Economists 

Senior Managers 

2004 2005 2006 2007 2008 

444 418 444 459 464 

515 491 517 527 544 

78 72 74 73 70 

38 38 39 41 40 

1075 1019 1074 1100 1118 

Note: These totals reflect full- and part-time staff on board as of September 30 for each year. The actual full-time equivalent usage for each year varies from the on-board count. 

FTC’s Workforce Composition 

6 Performance and Accountability Report—Fiscal Year 2008 
 

 

Performance Overview 

T

his section explains the FTC’s strategic and performance planning framework and 

summarizes the key performance measures reported in the Performance Section. 

The Performance Section contains details of program performance results, trend 

data by fiscal year, resources, strategies, factors affecting performance, and the procedures 

used to verify and validate the performance data. 

Strategic and Performance Planning Framework 

Performance Measurement Methodology 

The FY 2008 performance planning framework originates from the FTC’s FY 2006–2011 

Strategic Plan, available at www.ftc.gov/opp/gpra/spfy06fy11.pdf, and is supported by the 

FTC’s Performance Plan, available at www.ftc.gov/opp/gpra/CBJ_2008_performance_plan.pdf. 

Strategic Goals Statements of long-term aims outlined in the Strategic Plan, which 

define how the agency carries out its mission. 

Objectives Statements of how the FTC plans to achieve the strategic goals. 

Performance Measures Indicators used to gauge success in reaching strategic objectives. 

Key Measures Measures that best indicate whether agency activities are achieving 

the desired outcome associated with the related objective. 

Targets 

Expressions of desired performance levels or specific desired results 

targeted for a given fiscal year. Targets are expressed in quantifiable 

terms. 

As illustrated on the next page, the FTC’s work is structured around two strategic 

goals and eight objectives. Performance measures for the eight objectives are used 

to gauge the FTC’s success for each objective.

 Management’s Discussion and Analysis 7 
 

 

 

 

 

 

Strategic Goals and Objectives
 

Strategic Goals Objectives 

Identify fraud, deception, and unfair practices that cause the greatest 

consumer injury. 

Protect Consumers 

Prevent fraud, deception, 

Stop fraud, deception, unfairness, and other unlawful practices through 

law enforcement. 

and unfair business practices 

in the marketplace 

Prevent consumer injury through education. 

Enhance consumer welfare through research, reports, advocacy, and 

international cooperation and exchange. 

Maintain 

Competition 

Prevent anticompetitive 

mergers and other 

anticompetitive business 

practices in the marketplace 

Identify anticompetitive mergers and practices that cause the greatest 

consumer injury. 

Stop anticompetitive mergers and business practices through law enforcement. 

Prevent consumer injury through education. 

Enhance consumer welfare through research, reports, advocacy, and 

international cooperation and exchange. 

Key Performance Measures Summary 

The FTC has established various measures for assessing program performance against strategic goals 

and objectives. Of the 34 measures, 11 are considered “key” measures because they best indicate whether 

agency activities are achieving the desired outcome associated with the related objective. For each 

measure, the FTC has established a performance target. This report presents actual results in comparison 

to established targets. Chart A summarizes actual performance measure results and shows that the FTC 

exceeded the target for 9 of 11 key performance measures. 

Target Not Met 

18% 

Target Exceeded 

82% 

Target Not Met 2 

Target Exceeded 9 

Total Key Performance Measures 11 

Chart A: Key Performance Measure Results 

8 Performance and Accountability Report—Fiscal Year 2008 
 

Key Performance Measures Overview 

The following table summarizes actual performance during FY 2008 against established targets for all of the 

FTC’s key performance measures and provides a synopsis of related highlights. 

Strategic Goal 1: Protect Consumers 

Objective 1.1 Identify Fraud, Deception, and Unfair Practices That Cause the Greatest Consumer Injury 

Key Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

1.1.2 The percentage of consumer protection law 

enforcement actions that are responsive to consumer 

complaint information gathered by the agency. 

65% 71%  N/A 

PERFORMAnCE HiGHLiGHTS 

In response to a sharp increase in delinquencies and foreclosures, the FTC intensified its focus on the 

mortgage market, taking actions that were responsive to the consumer complaint information gathered 

by the agency. In April 2008, the FTC charged Mortgage Foreclosure Solutions, Inc., with operating a 

nationwide mortgage foreclosure “rescue” scam that charged consumers as much as $1,200 to save their 

homes from foreclosure but failed to do so. In June 2008, the FTC charged CompuCredit Corporation with 

deceptive marketing practices in selling credit cards to consumers in the subprime market. 

Objective 1.2 Stop Fraud, Deception, Unfairness, and Other Unlawful Practices Through Law Enforcement 

Key Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

1.2.1 Stop economic injury to consumers each year 

through law enforcement. 

$400 

million 

$474 

million 

$2 

billion 

PERFORMAnCE HiGHLiGHTS 

In FY 2008, the FTC continued to combat the deceptive marketing of health products. In August 2008, 

Airborne Health, Inc., the maker of the popular Airborne Effervescent Health Formula, an effervescent 

tablet marketed as cold prevention and treatment, agreed to pay up to $30 million to settle FTC charges 

that it did not have adequate evidence to support its advertising claims. 

 Signifies that the target was met or exceeded or that the FTC is on track to meet the five-year target. 

X Signifies that the target was not met or that the FTC is not on track to meet the five-year target. 

N/A Signifies that the performance measure does not have a cumulative five-year target. 

continued

 Management’s Discussion and Analysis 9 
 

 

Strategic Goal 1: Protect Consumers (continued)
 

Objective 1.3 Prevent Consumer Injury Through Education 

Key Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

1.3.4 Track (a) the number of times print media publish 

articles that refer to FTC consumer protection activities 

and (b) the circulation of media that publish those 

articles. 

(a) 2,500 articles 

(b) 675 million 

circulation 

(a) 3,100 articles 

(b) 791 million 

circulation 





N/A 

PERFORMAnCE HiGHLiGHTS 

In July 2008, many news outlets ran stories on the FTC’s report “Marketing Food to Children and 

Adolescents: A Review of Industry Expenditures, Activities, and Self-Regulation.” News organizations 

that sent reporters to participate in an FTC press briefing in person or by teleconference included the 

Washington Post, New York Times, Los Angeles Times, Chicago Tribune, and Associated Press. 

Objective 1.4 Enhance Consumer Welfare Through Research, Reports, Advocacy, and International 

Cooperation and Exchange 

Key Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

1.4.1 Convene or participate substantially in workshops 

and conferences on novel or challenging consumer 

protection problems or issues. 

6 workshops 

and conferences

 16 workshops 

and conferences  30 

PERFORMAnCE HiGHLiGHTS 

The FTC’s “Green Guides” outline general principles for all environmental marketing claims and provide 

specific guidance about certain green claims. To address concerns in the area of green marketing, the 

agency held a series of public workshops on a number of emerging green marketing topics. The first 

workshop took place in January 2008 and addressed carbon offsets and renewable energy certificates. 

The second workshop, on green packaging, took place in April 2008. The third workshop, held in July 

2008, examined developments in environmental claims for building products, buildings, and textiles, 

along with consumer perceptions of those claims. 

10 Performance and Accountability Report—Fiscal Year 2008 
 

 

Strategic Goal 2: Maintain Competition
 

Objective 2.1 Identify Anticompetitive Mergers and Practices That Cause the Greatest Consumer Injury 

Key Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

2.1.1 Achieve positive outcomes* in matters in which 

Hart-Scott-Rodino (HSR) Act requests for additional 

information are issued. 

90% 100%  N/A 

PERFORMAnCE HiGHLiGHTS 

The FTC brought 13 merger enforcement actions after issuing a second request, obtaining consumer 

relief in merger matters involving crucial pharmaceuticals (Sun Pharmaceuticals/Taro Pharmaceutical 

Industries and Fresenius SE/Daiichi Sankyo Co.) and medical treatment products (Kyphon, Inc./Dic-OTechnical Technologies, Inc.) 

Key Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

2.1.2 Percentage of significant nonmerger investigations 

that result in a positive outcome.* 90% 100%  N/A 

PERFORMAnCE HiGHLiGHTS 

In addition to three consent orders in the real estate market, technology, and medical professions, 

the FTC obtained a significant result in the Cephalon, Inc., matter by filing for a permanent injunction 

in federal court challenging the defendant’s conduct that prevented competitors from entering the 

market with the generic version of a branded sleep disorder medication, forcing consumers and other 

purchasers to pay hundreds of millions of dollars for the branded drug. 

* See respective performance measure discussion in the Performance Section for definitions of “positive outcome” and “positive result.” 

 Signifies that the target was met or exceeded or that the FTC is on track to meet the five-year target. 

X Signifies that the target was not met or that the FTC is not on track to meet the five-year target. 

N/A Signifies that the performance measure does not have a cumulative five-year target. 

continued

 Management’s Discussion and Analysis 11 
 

Strategic Goal 2: Maintain Competition (continued)
 

Objective 2.2 Stop Anticompetitive Mergers and Business Practices Through Law Enforcement 

Key Measure FY 2008 

Target 

FY 2008 

Actual 

2.2.1 Positive result* of cases brought by the FTC due 

to alleged violations. 80% 96%  N/A 

PERFORMAnCE HiGHLiGHTS 

In the matter of Inova Health System Foundation’s proposed acquisition of Prince William Health System, 

the parties abandoned the transaction after the FTC filed for a preliminary injunction in federal court 

charging that the merger would reduce competition for general acute care inpatient hospital services, 

and as a result, consumers would pay higher prices and lose the benefits of nonprice competition. 

Objective 2.3 Prevent Consumer Injury Through Education 

Key Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

2.3.2 Track (a) the number of times print media publish 

articles that refer to FTC competition activities and (b) 

the circulation of media that publish those articles. 

(a) 2,500 articles 

(b) Establish 

baseline 

(a) 1,858 articles X

(b) 397 million N/A 

PERFORMAnCE HiGHLiGHTS 

The FTC initiated a series of competition-related education initiatives, including consumer- and businessoriented publications, to increase the awareness by the American public of what types of conduct are 

likely to be challenged as law violations. Examples of enforcement actions that received considerable 

media attention range from matters with an immediate impact in localized areas, such as the FTC’s 

successful challenge of the Inova/Prince William proposed merger (the Washington Post reported “FTC 

Challenge Blocks Inova Merger”), to cases of more national interest, such as the proposed acquisition 

by the Whole Foods Market, Inc., of competitor Wild Oats Market, Inc., which was reported by national 

and local newspapers across the country (e.g., the New York Times, Chicago Tribune, Sacramento Business 

Journal, and Austin American-Statesman). 

* See respective performance measure discussion in the Performance Section for definitions of “positive outcome” and “positive result.” 

continued 

12 Performance and Accountability Report—Fiscal Year 2008 
 

 

Strategic Goal 2: Maintain Competition (continued)
 

Objective 2.4 Enhance Consumer Welfare Through Research, Reports, Advocacy, and International 

Cooperation and Exchange 

Key Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

2.4.2 Issue studies, reports, and working or issues 

papers on significant competition-related issues. 

8 studies, 

reports, 

and papers 

7 studies, 

reports,

 and papers X

40 

PERFORMAnCE HiGHLiGHTS 

The FTC continued to devote resources to the analysis of the nation’s crucial economic sectors by 

producing reports such as the “Report of the Federal Trade Commission on Activities in the Oil and 

Natural Gas Industries,” and the “2007 Report on Ethanol Market Concentration,” holding conferences 

on the health care system and energy markets, and evaluating the development of the legal models 

used in assessing potentially anticompetitive mergers or conduct. The FTC’s Unilateral Effects Analysis 

and Litigation Conference examined the application of a theory concerning mergers of firms that sell 

competing, but differentiated, products. The theory recognizes that, in some instances, mergers may 

create or enhance market power by allowing the merged firm to profitably raise prices, without being 

constrained by other rival market incumbents. 

2.4.3 Make advocacy filings with other federal and 

state government agencies, urging them to assess the 

competitive ramifications and costs and benefits to 

consumers of their policies. 

6 advocacy 

filings 

12 

advocacy 

filings  30 

PERFORMAnCE HiGHLiGHTS 

More than half of the FTC’s advocacy filings in FY 2008 were aimed at eliminating government-imposed 

impediments to a competitive marketplace in the health care industry. The agency provided comments 

on a variety of proposed legislations that would restrict the ability of so-called retail clinics to successfully 

compete; that would permit collective bargaining among otherwise independent health care providers 

to the detriment of consumer welfare; or that would impose excessive and unwarranted licensing 

requirements on health care providers, thus undercutting consumer choice, stifling innovation, and 

weakening the market’s ability to contain heath care costs. 

 Signifies that the target was met or exceeded or that the FTC is on track to meet the five-year target. 

X Signifies that the target was not met or that the FTC is not on track to meet the five-year target. 

N/A Signifies that the performance measure does not have a cumulative five-year target. 

continued

 Management’s Discussion and Analysis 13 
 

 

 

 

 

Strategic Goal 2: Maintain Competition (continued)
 

Key Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

2.4.7 Track the number of (a) cases in which the FTC 

cooperated with a foreign competition authority, (b) 

consultations with or comments to foreign competition 

authorities, (c) written submissions to international fora, 

(d) international events attended, and (e) leadership 

positions held by FTC staff in international competition 

organizations. 

(a) 30 cases 

(b) 25 

consultations 

or comments 

(c) 7 submissions 

(d) 8 events 

(e) 5 positions 

(a) 79 cases 

(b) 89 

consultations 

or comments 

(c) 30 submissions 

(d) 68 events

(e) 9 positions 











N/A 

PERFORMAnCE HiGHLiGHTS 

The FTC continued its expanding international activities by cooperating with foreign competition agencies 

on enforcement matters, strengthening bilateral relations particularly with key partners such as the 

European Union and Canada, developing a technical assistance program for young competition agencies 

around the world, and promoting cooperation and convergence through its leadership in multilateral 

organizations such as the International Competition Network. 

Performance Measures Summary 

The Performance Measure Summary Table in the Performance Section of this report shows actual 

results for all performance measures. Chart B provides a summary of all performance results. Of the 34 total 

performance measures, 18 were exceeded, 1 was met, 3 are measures being tracked and have “establish 

baseline” targets, and 12 were not met. Of the 12 performance measures not met, 4 are measures with fiveyear targets where the FTC is on track to reach the cumulative amount. Based on these results, the FTC has 

made significant progress toward reaching its eight objectives. 

Establish Baseline 3 

Target Not Met 12 

Target Met 1 

Target Exceeded 18 

Target Exceeded 

53% 

Establish Baseline 

9% 

Target Met 

3% 

Target Not Met* Total Performance Measures 34 35%

*2 of 12 were key performance measures 

Chart B: Performance Measures Summary 

14 Performance and Accountability Report—Fiscal Year 2008 
 

 

 

Agency Mission Challenges 

The FTC stands prepared to face the challenges of today’s marketplace as a champion 

for consumers and competition. As a law enforcement agency with a broad mandate, 

many of the FTC’s challenges are defined by the conditions of the marketplace, and thus 

are ever changing. For example, as consumers and businesses encounter difficulties with 

subprime mortgage lending, identity theft, deceptive or fraudulent advertising, spam, 

and anticompetitive business practices in, among others, the energy, technology, real 

estate, or health care industries, the FTC steps forward to protect consumers and maintain 

competition. Agency management has identified significant mission challenges the FTC 

currently faces. Management’s identification was performed separately from the Inspector 

General’s (IG) assessment of management and performance challenges (see the Financial 

Section’s Other Accompanying Information). However, since management concurs with 

the IG assessment, certain aspects of the challenges described below are also addressed 

by the IG. 

Agency mission challenges are presented below as they relate to the agency’s strategic 

goals. A reference to the most applicable strategic objectives is also provided so that 

readers may refer to descriptions of related performance targets and actual results listed by 

objective within the Performance Section. As part of our current strategic planning efforts, 

the FTC is reassessing the agency’s overall performance framework, including evaluating 

our performance measures to ensure they provide the most relevant and meaningful 

information on strategic goals and objectives. 

Strategic Goal 1: Protect Consumers: Prevent Fraud, 

Deception, and Unfair Business Practices in the Marketplace 

Protecting Consumers in the Financial Services Marketplace. Agency law 

enforcement actions target deceptive and other illegal practices involving mortgage 

lending and other financial services, with a focus on the subprime market. These practices 

can have severe consequences for consumers, including unanticipated high-cost 

mortgages, ruined credit histories, loss of their homes, and unwarranted fears of arrest 

and incarceration for failure to pay on time. The FTC’s challenge is to combat unfair and 

deceptive practices involving mortgage foreclosure scams, mortgage servicing, subprime 

lending in the mortgage and credit areas, credit cards, credit repair, payment cards, debt 

collection, debt settlement, and student loans. (Objectives 1.1 and 1.2) 

Improving Data Security and Combating Identity Theft. Identity theft exacts 

a heavy financial and emotional toll from its victims, and the FTC seeks to assist the 

millions of Americans who are victimized each year. The agency’s challenge is to combat 

identity theft by bringing law enforcement actions against companies that fail to maintain 

reasonable safeguards to protect consumer information from identity theft; educating local 

law enforcement officers on how to recognize, investigate, and prepare identity theft cases; 

 Management’s Discussion and Analysis 15 
 

 

 

 

 

 

 

Seven Practices for Computer Security 

1.	 Protect your personal information. 

It’s valuable. 

2. Know who you’re dealing with. 

3.	 Use security software that updates 

automatically. 

4. Keep your operating system and 

web browser up-to-date, and learn 

about their security features. 

5.	 Keep your passwords safe, secure, 

and strong. 

6. Back up important files. 

7. Learn what to do in an e-mergency. 

Access to information and 

entertainment, credit and financial 

services, products from every corner 

of the world—even to your work—is 

greater than ever. Thanks to the Internet, 

you can play a friendly game with an 

opponent across the ocean; review and 

rate videos, songs, or clothes; get expert 

advice in an instant; or collaborate with 

far-flung coworkers in a “virtual” office. 

But the Internet—and the anonymity 

it affords—also can give online 

scammers, hackers, and identity thieves 

access to your computer, personal 

information, finances, and more. With 

awareness as your safety net, you can 

minimize the chance of an Internet 

mishap. To be safer and more secure 

online, make these seven practices part 

of your online routine . To learn more, 

visit www.OnGuardOnline.gov. 

and educating consumers on how to avoid and recover from 

identity theft. (Objectives 1.1 and 1.2) 

Protecting Consumers from Do Not Call 

Violations. The National Do Not Call (DNC) Registry puts 

consumers in charge of the telemarketing calls they receive 

at home. The federal government created the national 

registry to make it easier and more efficient for consumers 

to stop unwanted telemarketing calls. There are now more 

than 172 million active registrations on the Registry. The 

FTC’s challenge is to ensure that consumers who register 

their numbers are protected from receiving unwanted 

telemarketing calls by enforcing the DNC provisions of the 

Telemarketing Sales Rule. Though most entities covered 

by the DNC Rule comply, the FTC received more than 1.75 

million consumer complaints alleging DNC violations in FY 

2008. (Objectives 1.1 and 1.2) 

Evaluating “Green” Marketing Claims. New 

“green” claims, such as claims for carbon reduction, landfill 

reduction, and sustainable materials and packaging, recently 

have increased in popularity. These claims can be extremely 

useful for consumers; however, the complexity of the issues 

involved creates the potential for confusing, misleading, and 

fraudulent claims. Given this potential, the FTC is completing 

its series of workshops and evaluating whether the FTC 

Guides for the Use of Environmental Marketing Claims 

(“Green Guides”) remain current and useful. The agency 

is also developing a consumer and business education 

campaign and pursuing appropriate enforcement action 

involving deceptive claims in this area. (Objectives 1.2 and 1.3) 

Stopping Technology Abuses. Technology provides 

countless benefits to consumers, including choice, 

convenience, and increased access to goods, services, 

and information. However, it also provides new vehicles 

for fraudulent, deceptive, and unfair practices in the 

marketplace. If consumers are not adequately protected, 

not only can they suffer economic injury, but they can lose 

confidence in these new technologies and e-commerce. For 

this reason, the FTC brings cases against those who abuse 

technology. Additionally, the agency has taken a lead role 

16 Performance and Accountability Report—Fiscal Year 2008 
in addressing the complex privacy and security issues that may be associated with the use 

of behavioral advertising, contactless payment, mobile marketing, social networking, and 

other new media. (Objective 1.2) 

Stopping Health Fraud. Consumers can fall prey to fraudulent health marketing 

when they are desperate for help. The FTC challenges deceptive marketing of health 

products, particularly claims about serious diseases or weight loss. (Objective 1.2) 

Protecting Older Americans from Fraud. As the U.S. consumer ages, fraudsters 

are likely to target their scams to the perceived vulnerabilities of the elderly. Given this 

challenge, the FTC is developing a coordinated law enforcement response to challenge 

fraud targeting older Americans and increasing collaboration with state and federal 

partners. (Objective 1.2) 

Serving Hispanic and African-American Populations. The FTC has conducted 

fraud surveys showing that Hispanic and African-American consumers are more likely to 

be victims of fraud than other demographic groups. The FTC’s challenge is to aggressively 

combat consumer fraud against Hispanics through its Hispanic Outreach and Enforcement 

Initiative, and research how best to serve African-American consumers. (Objective 1.3) 

Addressing Issues Related to Marketing to Children. To combat childhood 

obesity, underage drinking, and other problems, the FTC engages in research, policy, and 

law enforcement work pertaining to marketing of food, alcohol, and violent entertainment 

to children. The FTC monitors self-regulation in the food, alcohol, movie, video game, and 

music recording industries. (Objective 1.2) 

Ensuring Compliance with FTC Orders. Order enforcement is an integral part 

of the FTC’s consumer protection goal. The agency places a high priority on enforcing 

orders against repeat offenders, as well as against those who act with them. The FTC 

developed an enforcement database to improve how we track compliance with FTC 

orders. As more information is entered into the database, the FTC’s challenge is to 

monitor and improve the database and to bring more enforcement actions. (Objectives 

1.1 and 1.2) 

Building International Partnerships. The FTC promotes market-oriented 

consumer protection and privacy policies globally, particularly in areas involving 

e-commerce and new technologies. Given the challenge of the increasingly crossborder nature of fraud, spam, spyware, and privacy issues, developing international 

partnerships is critical to the effective enforcement of laws to protect U.S. consumers. 

The FTC uses the tools provided by the 2006 U.S. SAFE WEB Act to increase the 

effectiveness of its cross-border cooperation and enforcement. Five key areas where 

the FTC has used the new authority are: broadening information sharing, expanding 

investigative cooperation, negotiating international agreements, establishing staff 

exchanges, and enhancing cooperation between the FTC and the Department of 

Justice (DOJ) in foreign litigation. (Objectives 1.2 and 1.4) 

 Management’s Discussion and Analysis 17 
 

 

 

 

Market Manipulation Rulemaking 

Exercising the authority provided 

by Congress under the Energy 

Independence and Security Act of 

2007, the FTC has initiated a rulemaking 

process that will assist the FTC in 

determining whether, and in what ways, 

it should develop a rule defining and 

prohibiting market manipulation in the 

petroleum industry. The FTC expects to 

conclude the rulemaking process by the 

end of the year. Learn more at www.ftc. 

gov/ftc/oilgas/rules.htm. 

Gasoline and Diesel Price Monitoring 

In May 2002, the FTC announced a 

project to monitor wholesale and retail 

prices of gasoline in an effort to identify 

possible anticompetitive activities and 

determine whether a law enforcement 

investigation would be warranted. 

Today, this project tracks retail gasoline 

and diesel prices in some 360 cities 

across the nation and wholesale 

(terminal rack) prices in 20 major urban 

areas. The FTC receives daily data from 

the Oil Price Information Service and 

from the Department of Energy’s public 

Gas Price Hotline, while also reviewing 

other relevant information that might 

be reported to the FTC directly by 

the public or by other federal or state 

government entities. An econometric 

model is used to determine whether 

current retail and wholesale prices each 

week are anomalous in comparison with 

historical data. To learn more, visit www. 

ftc.gov/ftc/oilgas/gas_price.htm. 

Strategic Goal 2: Maintain 

Competition: Prevent Anticompetitive 

Mergers and Other Anticompetitive 

Business Practices in the Marketplace 

Preventing Anticompetitive Activity in Energy 

Industries. The price of gasoline and other energy sources 

continues to be a great concern for consumers, and no 

single field of endeavor for the FTC is more important to 

the American public than the energy sector. The agency 

meets this challenge by focusing closely on gasoline 

markets and moving quickly to address any anticompetitive 

activity, whether merger or nonmerger activity. In enforcing 

the antitrust laws, the FTC continuously examines price 

movements and other activity through its Gasoline and 

Diesel Price Monitoring Project to identify any conduct that 

may not reflect purely competitive decisions based on the 

forces of supply and demand. Some believe the FTC should 

be doing more in this area, and last December Congress 

enacted the Energy Independence and Security Act of 2007 

(EISA). Section 811 of the EISA granted the FTC authority 

to promulgate a rule prohibiting the use of manipulative 

or deceptive devices or contrivances in wholesale crude 

oil, gasoline, and petroleum distillate markets. The FTC 

is now using that authority to conduct a rulemaking 

proceeding and expects to complete the process by 

the end of 2008. Nonmerger activity may include illegal 

agreements among competitors, agreements between 

manufacturers and product dealers, creating monopolies, 

and other anticompetitive activities. In order to better 

prepare agency staff to meet this challenge, the FTC devotes 

considerable resources to monitoring and studying energy 

markets—often in response to congressionally mandated 

requirements—thus developing the professional expertise 

and body of knowledge needed to address emerging 

concerns. (Objective 2.2) 

18 Performance and Accountability Report—Fiscal Year 2008 
Promoting Competition in Health Care and Prescription Drugs. The rapidly 

rising cost of health care is a matter of concern for consumers, employers, insurers, and 

the nation as a whole. Health-related products and services continue to account for an 

increasingly significant share of gross domestic product. Prescription drug costs alone are 

projected to be more than $260 billion in 2009. Agreements between branded and generic 

manufacturers to delay generic entry continue to pose a significant threat to competition 

by depriving consumers of low-cost generic drugs. When appropriate, the FTC investigates 

and challenges patent settlements between brand and generic companies, and advocates 

for legislation to eliminate this problem. The agency also addresses rising prescription 

drug prices by monitoring pharmaceutical company mergers. In addition, the FTC stops 

anticompetitive agreements between physicians and hospital service organizations and 

monitors hospital and other mergers that may raise the cost of health care. (Objective 2.2) 

Preventing and Stopping Anticompetitive Business Practices in the Real 

Estate Industry. Purchasing or selling a home is one of the most significant financial 

transactions most consumers will ever make, and anticompetitive industry practices can 

raise the prices of real estate services. The FTC investigates and challenges anticompetitive 

actions to preserve competition in the real estate industry, allowing consumers more 

choice, and ensuring that consumers who choose to use discount real estate brokers will 

not be handicapped by rules aimed at discouraging discount brokers. (Objective 2.2) 

Preventing and Stopping Anticompetitive Mergers. There are many mergers 

that benefit consumers by allowing firms to operate more efficiently. Other mergers, 

however, may result in higher prices, fewer choices, or reduced quality. The challenge for 

the FTC is to analyze the likely effects of a merger on consumers and competition—a 

process that can take thousands of hours of investigation and economic analysis—and 

identify those that may be harmful. The premerger notification requirements of the HartScott-Rodino (HSR) Act provide the FTC with an effective starting point for identifying 

potentially anticompetitive mergers, acquisitions, and joint ventures (collectively referred 

to as mergers) before they are consummated. The efforts of the FTC in this area benefit 

consumers by keeping prices low and by maximizing the quality and choice of goods and 

services. (Objective 2.2) 

Preventing and Stopping Anticompetitive Business Practices in High 

Technology Sectors. The growing importance of technology is a crucial marketplace 

challenge that is placing greater demands on antitrust enforcement. The FTC’s antitrust 

investigations increasingly involve high-technology sectors of the economy, such as 

computer hardware and pharmaceutical products. Furthermore, issues in antitrust matters 

increasingly intersect with intellectual property concerns, raising difficult questions about 

how to harmonize these two bodies of law, both of which have a goal of promoting 

innovation. (Objective 2.2) 

 Management’s Discussion and Analysis 19 
 

Increasing Consumer Outreach. The FTC is working to meet the challenge of 

educating consumers on the important role of competition in providing them the most 

valuable mix of price, choice, and innovation. The FTC staff develops specialized web pages 

on issues of interest and importance to consumers and industry, such as health care, oil 

and gas, and real estate; seeks opportunities to speak on competition issues; and submits 

articles on competition to consumer-oriented publications. (Objective 2.3) 

Preventing Misuse of Government Processes. An important part of the FTC’s 

competition agenda includes efforts to identify, investigate, and, where appropriate, 

prosecute the misuse of government processes. Such misuse can take a variety of forms, 

including abusing government regulatory processes, making misrepresentations to 

government agencies, or enforcing intellectual property rights in bad faith. This can harm 

consumers by, for example, keeping lower-cost generic drugs from the marketplace. The 

FTC remains vigilant in meeting the challenge of stopping these practices by seeking out 

and scrutinizing competitors’ misuse of government processes to hamper rivals. (Objectives 

2.1 and 2.2) 

Promoting Sound Competition Policy at the International Level. Because 

antitrust enforcement increasingly involves cross-border issues, the FTC’s work promoting 

international convergence toward sound policies is vital to meeting the challenge 

to maintain competition. Although antitrust laws generally support the operation of 

competitive market economies, and antitrust laws and enforcement policies around the 

world share many goals, some differences among them may increase costs to firms that 

seek to merge, establish distribution channels, or pursue other business arrangements 

across borders. The FTC plays a leading role bilaterally, and through international 

organizations, to increase the procedural and substantive consistency of antitrust rules and 

their enforcement. The agency also broadens and deepens its strong cooperation with 

foreign antitrust agencies on cases and policy issues. In addition, the FTC provides technical 

assistance to foreign competition agencies, particularly in countries in the process of 

developing competition laws or enforcing newly adopted laws. (Objective 2.4) 

Advocating for Competition before the Courts and Other Government 

Agencies. The FTC works to meet the important challenge of eliminating governmentimposed impediments to a competitive marketplace by advising other government 

policymakers to apply sound competition principles as they make decisions affecting 

consumer welfare. Among its activities, the FTC continues to file comments on proposed 

government action (legislation, regulation, and other rules) affecting competition across 

many industries, such as the provision and advertising of legal services, real estate 

brokerage, the direct shipment of wine to consumers, contractual relationships between 

product suppliers and distributors, and Certificate of Need (CON) laws. States may enact 

CON laws to require that a new health care facility, such as a hospital, apply to a state for a 

“certificate of need” before the hospital may enter. Competitors may use the CON process 

to argue to the state that the potential competitors’ facilities are not needed. The FTC 

generally opposes these CON laws. (Objective 2.4) 

20 Performance and Accountability Report—Fiscal Year 2008 
Management Assurances (on Internal Controls, 

Financial Systems, and Compliance with Laws and Regulations) 

Implementation of the Federal Managers’ Financial Integrity Act 

(FMFIA) at the FTC 

The FTC considers internal controls to be an integral part of all systems and processes 

that the agency utilizes in managing its operations and carrying out activities toward 

achieving strategic goals and objectives. The FTC holds agency managers accountable for 

efficiently and effectively performing their duties in compliance with applicable laws and 

regulations and for maintaining the integrity of their activities through the use of controls. 

The FTC’s Senior Assessment Team (SAT) provides strategic direction and oversight over 

the agency’s internal control program, to promote and facilitate compliance with applicable 

guidance (e.g., Office of Management and Budget [OMB] Circular A-123, “Management’s 

Responsibility for Internal Control”), and communicates the results of reviews to senior 

management and the head of the agency. 

Some of the functions of the SAT are developing and documenting an internal control 

review plan, identifying key processes and related control activities and performing a 

preliminary risk assessment of such processes, reviewing and assessing the overall control 

environment, helping to ensure the timely implementation of any corrective actions 

needed to address identified weaknesses, and establishing guidance for program managers 

in monitoring and assessing management controls within their areas of responsibility. 

During FY 2008, the SAT found that the FTC’s overall control environment is strong. 

Additionally, the SAT updated guidance for program managers to use in completing 

self-assessments of the processes and controls within their areas of responsibility. Senior 

managers throughout the agency completed self-assessments that disclosed no significant 

control weaknesses. The SAT evaluated the results of the managers’ assessments and 

concurred that no material weaknesses or nonconformances were identified. The results 

of these evaluations and other information—such as independent audits or reviews 

performed by the Office of Inspector General (OIG) and the Government Accountability 

Office (GAO) (e.g., Federal Information Security Management Act review), independent 

audits of service providers’ operations and financial systems (e.g., reviews conducted in 

accordance with Statement on Auditing Standards [SAS] 70), internal analyses, and other 

relevant evaluations and control assessments—were considered by the SAT and the 

agency head in determining whether there are any management control deficiencies 

or nonconformances that must be disclosed in the annual assurance statement. The 

Chairman’s assurance statement that follows is supported by the processes and reviews 

described above, which were carried out in FY 2008. Management assurances tables 

appear in the Financial Section’s Other Accompanying Information.

 Management’s Discussion and Analysis 21 
 

Chairman’s FMFIA Statement of Assurance
 

22 Performance and Accountability Report—Fiscal Year 2008
 
 

 

Summary of Material Weaknesses and Nonconformances 

As noted in the Chairman’s statement of assurance, the FTC has no material weaknesses 

or nonconformances to report for FY 2008. No new material weaknesses or significant 

nonconformances were identified for the past four years, nor were there any existing 

unresolved weaknesses requiring corrective action. 

Federal Information Security Management Act (FISMA) 

The FTC continues to stay vigilant in ensuring that there are no material weaknesses 

in administrative controls over information systems and is always seeking methods 

of improving its secure configuration. The OIG completed its review of the FTC’s 

implementation of the FISMA for FY 2008, and in his semiannual report to Congress, 

the Inspector General reported that “the FTC security environment is strong and robust 

and continues to evolve to expand its coverage and to address changing threats and 

requirements.” As part of the agency’s effort to meet or exceed the requirements of FISMA, 

100 percent of agency systems have undergone certification and accreditation, and the 

FTC’s certification and accreditation policy conforms with the standards established by the 

National Institute of Standards and Technology. Additionally, the Information Technology 

Management Office is presently updating its security policies and procedures as an 

integrated effort with the agency’s comprehensive review of privacy matters led by the 

FTC’s Privacy Steering Committee. 

Debt Collection Improvement Act 

The Debt Collection Improvement Act of 1996 prescribes standards for the 

administrative collection, compromise, suspension, and termination of federal agency 

collection actions and referrals to the proper agency for litigation. Although the Act has no 

material effect on the FTC because the agency operates with minimal delinquent debt, all 

debts more than 180 days old have been transferred to the U.S. Department of the Treasury 

for cross-servicing. In addition, recurring payments were processed by electronic funds 

transfer (EFT) in accordance with the EFT provisions of the Debt Collection Improvement Act. 

Prompt Payment Act 

The Prompt Payment Act requires federal agencies to make timely payments to 

vendors, including any interest penalties for late invoice payments. In FY 2008, the FTC 

paid interest penalties on 35 invoices, or about 1⁄2 percent, of the 7,087 vendor invoices 

processed, representing payments of approximately $53.1 million. The FTC paid a total of 

$1,881 in interest or interest penalties for every $28,235 disbursed in FY 2008.

 Management’s Discussion and Analysis 23 
 

Agency Financial Management Systems Plans 

In FY 2004, the FTC adopted a five-year financial management strategic plan that 

called for implementing a state-of-the-art, integrated core financial management system 

that encompasses accounting, budget, acquisition, and performance measurement 

requirements. The goal is to offer FTC managers and staff accurate and timely financial 

management data and flexible query and reporting tools in a one-stop, easy-to-navigate 

system. 

In FY 2008, the FTC met its financial management goal by implementing a new core 

financial system hosted by the Department of the Interior’s National Business Center. At the 

start of the fiscal year, the FTC transitioned from a legacy core financial system to a modern 

financial system platform. The new application provides more timely, accurate, and reliable 

financial information to agency decision makers and will also provide a long-term scalable 

solution. 

The FTC plans to build on this success by fully integrating functionality currently in 

separate legacy systems with the core financial system. To this end, during the past fiscal 

year, the FTC has been preparing to integrate the procurement (purchase requisition and 

contract writing) system and successfully completed a comprehensive set of acquisition 

system business requirements. After acquisition functionality is integrated, plans call for 

integrating robust project and cost accounting functionality, property management, 

and budget formulation, using an enterprise resource planning system approach. Future 

plans also call for updating the five-year financial management plan in conjunction with 

developing the agency’s overall strategic plan for FY 2009–2014. 

24 Performance and Accountability Report—Fiscal Year 2008 
 

 

 

Financial Highlights 

Introduction 

The financial highlights presented below are an analysis of the information that appears 

in the FTC’s FY 2008 financial statements. The agency’s financial statements, which appear 

in the Financial Section of this report, are audited by the Office of Inspector General. 

FTC management is responsible for the fair presentation of information contained in the 

principal financial statements. The financial statements and financial data presented below 

have been prepared from the agency’s accounting records in accordance with Generally 

Accepted Accounting Principles (GAAP). GAAP for federal agencies are the standards 

prescribed by the Federal Accounting Standards Advisory Board (FASAB). For the 12th 

straight year, the FTC is proud to have received an unqualified (clean) opinion on our 

audited financial statements. We also realigned our accounting code structure as part of a 

long term effort to link strategic goals and objectives to actual cost data. The chart below 

presents a snapshot of the changes in key financial statement line items that occurred 

during FY 2008 and is followed by an explanation of the more significant fluctuations in 

each of the FTC’s financial statements. 

End of Fiscal Year Balances 

Comparison of FY 2008 and FY 2007 

(Dollars shown in thousands) 

CONDENSED BALANCE SHEET Percentage 

change FY 2008 FY 2007 

Investments N/A $117,514 $ -

Accounts Receivable Net -30% 88,030 125,208

 Cash and Other Monetary Assets -91% 10,485 123,309 

 Fund Balance with Treasury 1% 86,792 85,848 

 General Property & Equipment, Net 30% 15,098 11,655 

Total Assets -8% $317,919 $346,020 

 Redress Receivables Accrued Due to Claimants -29% $87,800 $123,974 

 Undisbursed Redress 6% 85,021 80,180 

 Divestiture Fund Due 2% 45,485 44,570 

 Accounts Payable and Other 101% 49,537 24,693 

Total Liabilities -2% $267,843 $273,417 

 Unexpended Appropriations 0% - -

 Cumulative Results of Operations–Other Funds -31% $50,076 $72,603 

Total Net Position -31% $50,076 $72,603 

Total Liabilities and Net Position -8% $317,919 $346,020 

COST SUMMARY Percentage 

change FY 2008 FY 2007

 Gross Cost 

 Less: Earned Revenue 

9%

-69%

 $245,558 

 (119,394)

 $ 224,578 

 (166,960) 

 Net Program Costs 119% $126,164 $57,618 

 Management’s Discussion and Analysis 25 
 

Financial Analysis 

Assets. The FTC’s Balance Sheet shows total assets of $318 million at the end of 

FY 2008, a decrease of $28 million or 8 percent over FY 2007. The overall decrease is 

attributable to a $37 million, or 30 percent, decrease in nonfederal accounts receivable, 

which was partially offset by an increase in non-entity custodial funds (held as cash and 

investments) of $5 million; a $3 million increase in property and equipment and $1 million 

increase in Fund Balance With Treasury. The reduction in nonfederal accounts receivable 

primarily resulted from a $30 million (43 percent) increase in total collections against 

receivables over the prior year. The $5 million increase in custodial funds held as cash and 

investments is due to an increase in total collections and a decrease in amounts disbursed 

to consumers. The $3 million increase in property and equipment resulted from capital 

investments in information technology infrastructure and software investments such as 

integrating the Consumer Response Center, Consumer Information System, and Do Not Call 

systems into the new Consumer Sentinel Network. 

The amount of Cash and Other Monetary assets decreased by $113 million or 92 

percent. This fluctuation reflects the movement of Non-entity Cash (originally obtained 

from judgments and settlements) from deposit accounts held in commercial financial 

institutions to Investments in U.S. Department of Treasury (Treasury) Securities held by the 

Bureau of Public Debt. Custodial funds held in the FTC’s deposit account which are not 

needed for immediate disbursement are invested in special non-marketable Government 

Account Series (GAS) securities. 

Assets by Type (Dollars Shown in Millions) 

General Property 

Fund Balance & Equipment, Net Cash and 

with Treasury $15 (5%) Monetary Assets 

Receivable, Net 

$88 (28%) 

$87 (27%) 

Accounts 

$10 (3%) 

Investments 

$118 (37%) 

26 Performance and Accountability Report—Fiscal Year 2008 
Liabilities. The agency’s total liabilities at the end of FY 2008 were $268 million, 

decreasing slightly by $5 million or 2 percent less than the FY 2007 total liabilities of $273 

million. The decrease in total liabilities is primarily the result of a $31 million decrease in 

redress related liabilities (Accrued Redress Receivables Due to Claimants and Redress 

Collected But Not Yet Disbursed) which is consistent with the decrease redress related 

accounts receivable described above under Assets. These two non-entity liabilities 

correspond to cash and investments held by FTC in a custodial capacity as the result of 

judgments obtained or settlement agreements reached as part of consumer redress efforts. 

These redress related liabilities accounted for 65 percent of all liabilities in FY 2008 versus 

75 percent in FY 2007. The decrease in redress related liabilities was partially offset by a $14 

million increase in Other Intragovernmental Liabilities, a $8 million increase in accounts 

payable, and a $2 million increase in Other Nonfederal Liabilities. The $14 million increase 

in Other Intragovernmental Liabilities relates to an increase in amounts due to Department 

of Justice for their share of fees collected under the Hart–Scott–Rodino (HSR) Act. The $8 

million increase in accounts payable relates to an overall higher volume of activity and 

accruals for various expenditures for general property and equipment. The liability for 

Divestiture Fund Due represents a non-entity liability corresponding to the divestiture fund 

held until distribution is ordered per terms of the court case agreement. 

Liabilities by Type (Dollars Shown in Millions)

Other Liabilities,
 

Intragovernmental
 Accounts Payable $17 (6%) $16 (6%) Other Liabilities,
 

Nonfederal
 

$17 (6%)
 

Redress Receivables 

Accrued Due to Claimants 

$88 (33%) 

Divestiture Fund Due 

$45 (17%) 

Undisbursed Redress 

$85 (32%) 

 Management’s Discussion and Analysis 27 
 

Net Position. Net Position is the sum of Unexpended Appropriations and the 

Cumulative Results of Operations. At the end of FY 2008, the agency’s Net Position on the 

Balance Sheet and the Statement of Changes in Net Position is $50 million, decreasing by 

$23 million or 32 percent over the FY 2007 ending Net Position of $73 million. Financing 

sources from appropriations used during the year were $96 million and imputed financing 

sources totaled $7 million. The imputed financing consisted $2 million in future retirement 

benefits and $5 million in future health and life insurance benefits accrued in FY 2008 

which will be paid by entities other than the FTC. The net costs of operations totaling 

$126 million (gross costs of $246 million less exchange revenues from fees of $119 million) 

exceeded the financing sources described above by $23 million for a decrease to total net 

position. The amount (zero) of Unexpended Appropriations did not change. 

Results of Operations. Total gross costs for the period ended September 30th were 

$246 and $225 million for FY 2008 and 2007 respectively. The gross costs are inclusive of all 

costs involved in FTC’s ongoing operations. However, fees collected in relation to the HSR 

Act and the Do Not Call Registry offset the gross costs in determining net costs. FY 2008 

net costs of $126 million increased by $68 million over the FY 2007 level of $58 million due 

to a decline in the amount of fees collected of $48 million. As described below, during FY 

2007 FTC collected $29 million in excess HSR fees (that were unavailable for use) while HSR 

collections in FY 2008 were $36 million less than anticipated. The FTC also receives general 

fund appropriations and other financing sources that are not included in determining net 

costs. The following table summarizes net cost by Strategic Goal. 

Strategic Goal 1 Strategic Goal 2 FY 2008 Net Costs by Strategic Goal Protect Consumers Maintain Competition

 Gross Costs $ 140,705 $ 104,853

 Less: Earned Revenue (16,202) (103,192)

 Net Program Costs $ 124,503 $ 1,661 

28 Performance and Accountability Report—Fiscal Year 2008 
 

 

 

 

 

 

 

 

 

 

 

Budgetary Resources. The Statement of Budgetary Resources (SBR) provides 

information on budgetary resources made available to the agency and the status of these 

resources at the end of the fiscal year. For FY 2008, total Budgetary Resources apportioned 

and available for allotment were $257 million. This represents an increase of $32 million, or 

14 percent, over the Total Budgetary Resources available for allotment of $225 million in FY 

2007. Additionally, new budget authority (excluding unobligated balances brought forward 

and prior year recoveries) was $244 million in FY 2008, an increase of $2 million or 1 percent 

over FY 2007. In FY 2008, spending authority derived from offsetting collections totaled $148 

million, and general fund appropriations totaling $96 million comprised 61 and 39 percent of 

new budgetary authority respectively. Pursuant to Public Law 110-161, the FTC’s current year 

collections of $119 million ($103 million for HSR fees and $16 million for Do Not Call Registry) 

were supplemented by $29 million of prior year excess fees that were previously unavailable 

pursuant to Public Law No. 110-5. The SBR includes $15 million representing DOJ’s share 

of HSR fees which have not yet been disbursed to DOJ. There was a significant increase of 

$49 million in the amount reported as Distributed Offsetting Receipts on the Statement of 

Budgetary Resources. However, these are the non-entity and non-budgetary funds that are 

recorded in Miscellaneous Receipt Accounts and are attributable to civil penalties and other 

miscellaneous receipts that by law ar not retained by the FTC. Disgorgements of amounts 

that are undistributed from the redress program and court appointed receivers are included 

in this line item as they are returned to the Department of the Treasury. The chart below 

summarizes new budget authority for FY 2008. 

General Fund 

Appropriation 

$96 (39%) 

Spending Authority from 

Offsetting Collections 

$119 (49%) 

Offsetting Collections 

Previously Unavailable 

$29 (12%) 

new Budget Authority for FY 2008 (Dollars Shown in Millions)

 Management’s Discussion and Analysis 29 
 

Limitations of Financial Statements 

FTC management has prepared its FY 2008 financial statements from the books and 

records of the agency in accordance with the requirements of the Office of Management 

and Budget (OMB) Circular A-136, Financial Reporting Requirements, as amended. The 

financial statements represent the financial position and results of operations of the agency 

pursuant to the requirements of Chapter 31 of the U.S. Code section 3515(b). While these 

statements have been prepared from the agency’s books in accordance with the formats 

prescribed by the OMB, the statements are in addition to the financial reports used to 

monitor and control budgetary resources, which are prepared from the same books and 

records. These statements should be read with the understanding that they are for a 

component of the U.S. government, a sovereign entity. One implication is that unfunded 

liabilities cannot be liquidated without legislation that provides resources to do so. 

Financial Management Indicators 

Financial Management Indicators for FY 2008 

Debt Management 

Debt Transferred to Treasury 

Funds Management 

Fund Balance with Treasury (Identifies the difference between the 

fund balance reported in Treasury reports and the agency fund 

balance with Treasury recorded in its general ledger on a net basis) 

Payment Management 

Timely Vendor Payments (per Prompt Payment Act) 

Percentage Interest Penalties Paid to Invoices Processed 

Percentage of total dollars outstanding in current status* 

(good standing) for Individually Billed Travel Account holders 

Percentage of total dollars outstanding in current status* 

(good standing) for Centrally Billed Travel Accounts 

Percentage of total dollars outstanding in current status* 

(good standing) for Purchase Cards 

100% 

100% reconciled 

99% 

1⁄2 (or .5)% 

99% 

100% 

100% 

*The Office of Management and Budget threshold for delinquency is 61 days. 

30 Performance and Accountability Report—Fiscal Year 2008 
Performance Section 

Introduction to Performance 

T

he Performance Section presents detailed 

information on the performance results of 

the FTC’s programs and includes a discussion 

of strategies and factors affecting performance. 

This section also includes trend data, a summary of 

methods used to verify and validate performance 

data, and a summary of completed program 

evaluations. 

In FY 2006, the FTC revised its Strategic Plan for 

the fiscal years 2006–2011. This effort encompassed 

updating the agency’s performance framework 

to better define and measure its activities. As part 

of the update, a fourth objective and associated 

performance measures were added to each of the 

strategic goals. Because FY 2007 was the first year 

these changes were applied, the majority of the 

FTC’s performance measures have only one year of 

trend data. Years without trend data are indicated 

as not available (N/A) in the performance tables that follow. In FY 2007, some performance 

measure targets indicated that a baseline would be evaluated and established based on 

prior year results. The FY 2008 performance tables include the targets that were set based 

on last year’s data. Additionally, for performance measures with five-year cumulative targets, 

the shaded portions of the performance tables indicate those fiscal years included in the 

five-year targets. 

The FTC will undergo another update of its Strategic Plan in FY 2009 for the fiscal years 

2009–2014. This will provide the FTC with an opportunity to better define its performance 

framework and develop outcome performance measures. Furthermore, the agency 

expects that its multiyear implementation of a new financial system that began in FY 2007 

will aid in determining the cost of strategic goals and objectives. This will provide another 

opportunity to use more efficiency measures and make other refinements to the Strategic 

Plan in an effort to measure the outcomes of the FTC’s performance more precisely. 

Relationship of Outputs to Outcomes 

The goals of the FTC are to protect consumers and maintain and promote competition 

in the marketplace. The FTC has a number of desired outcomes of these goals, including (1) 

stopping fraud and anticompetitive mergers or conduct through strategic law enforcement 

actions; (2) educating consumers and businesses on their rights and responsibilities; and 

(3) influencing policymakers, legislators, and the judiciary to issue and interpret policies 

and laws that are pro-consumer and pro-competitive. However, it remains difficult, 

if not impossible, to measure precisely the value (in monetary terms or otherwise) of 

deterrence, education, and advocacy. But the agency is confident—taking into account 

 Performance Section 

Relief detail from the Federal Trade Commission’s 

headquarters building in Washington, DC.

33 
 

the information it gains through its performance measures—that consumers benefit from 

the FTC’s deterring unfair or deceptive acts and anticompetitive mergers or conduct, 

providing accurate consumer information, and advocating agency positions. The agency’s 

current performance measures include both input/output and outcome measures; 

however, the FTC is continuously reviewing its performance measures with the aim of 

developing additional outcome measures. The agency also added two efficiency measures 

(Performance Measures 2.2.6 and 2.2.7) in FY 2007. Some examples that highlight the 

agency’s focus toward measuring desired outcomes follow. 

A measurable outcome of the FTC’s goals is substantial financial savings to consumers 

through law enforcement actions to stop specific frauds and anticompetitive conduct or 

mergers. The FTC has developed five long-term outcome performance measures directed 

at these law enforcement actions, as discussed below. Even so, the FTC continues to strive 

to develop performance measures that directly reflect whether desired outcomes were 

achieved. For example, two output measures (Performance Measures 1.4.3 and 2.4.3), 

added in FY 2007, count the number of advocacy comments filed by the agency. The FTC 

is looking to take the next step to measure the outcome of its advocacy (e.g., whether 

proposed laws were changed or abandoned in a way that benefitted or prevented harm to 

consumers and/or competition as a result of the FTC filing). Under its consumer protection 

goal, in addition to counting consumer complaints added to the FTC’s database, a new 

measure (Performance Measure 1.1.2) was adopted in FY 2007 to determine the percentage 

of the agency’s consumer protection law enforcement actions that were responsive to the 

consumer complaint information gathered by the agency. Although this is another output 

measure, it brings the FTC closer to determining its role in the ultimate desired outcome of 

a marketplace free of fraud, deception, and unfair practices that cause consumer injury. 

Two years ago, the FTC added two outcome measures to its maintain competition goal. 

These two measures (Performance Measures 2.2.2 and 2.2.4) seek to measure the consumer 

savings that result from merger and nonmerger enforcement. The FTC now measures its 

achievement of outcomes using five long-term performance measures: (1) the five-year 

consumer protection performance goal (Performance Measure 1.2.1) to save consumers 

approximately $2 billion through law enforcement actions stopping consumer fraud; (2) 

the five-year maintain competition performance goal (Performance Measure 2.2.3) to 

take action against anticompetitive mergers in markets with a total of at least $125 billion 

in annual sales; (3) the five-year maintain competition performance goal (Performance 

Measure 2.2.5) to take law enforcement action against anticompetitive nonmerger conduct 

in markets with a total of at least $40 billion in annual sales; (4) the five-year maintain 

competition performance goal (Performance Measure 2.2.2) to achieve at least $2.5 billion 

in savings for consumers through merger enforcement; and (5) the five-year maintain 

competition performance goal (Performance Measure 2.2.4) to achieve at least $400 

million in savings for consumers through nonmerger enforcement. These five performance 

measures, in addition to annual outcome performance measures, continue to provide 

valuable indicators of how the FTC is progressing toward achieving its strategic goals to 

protect consumers and maintain competition. 

34 Performance and Accountability Report—Fiscal Year 2008 
 

 

Verification and Validation of 

Performance Data 

The financial data and performance results described in this report enable the FTC to 

administer its programs, gauge their success, and make adjustments necessary to improve 

program quality for the public. The FTC has taken the following steps to ensure the 

performance information it reports is complete, accurate, and consistent: 

◆	 Developed policy and documented the procedures used to ensure timely reporting of 

complete, accurate, and reliable actual results relative to the key performance measures, 

as specified in the current Strategic Plan. 

◆	 Held program managers accountable to set meaningful and realistic targets that 

also challenge the agency to leverage its resources. This includes ensuring ongoing 

monitoring of performance targets so they are updated to reflect changes in key factors 

that impact the agency’s ability to achieve such results. Further, when appropriate, 

program managers are required to explain how they will improve performance when 

targets are not met. 

◆	 Worked with the Office of Inspector General to ensure an independent review of the 

systems and methodologies used for collecting performance data and ensured that 

senior economists from the Bureau of Economics reviewed statistical data, as appropriate. 

◆	 Subjected performance measurement results to periodic senior management and 

Commission review throughout the fiscal year. This process includes substantiating 

that actual results reported are indeed correct whenever those results reveal significant 

discrepancies or variances from the target. 

Agency program managers also monitor and maintain automated systems and databases 

that collect, track, and store performance data, with support provided by the Information 

and Technology Management Office. In addition to the general controls in place over the 

network that ensure only authorized staff can access key systems, each application (system), 

such as the Consumer Sentinel Network, incorporates internal validation edits to ensure the 

accuracy of data contained therein. These application edits include checks for reasonableness, 

consistency, and accuracy. Cross-checks between other internal automated systems also 

provide assurances of data reasonableness and consistency. In addition to internal monitoring 

of each system, experts outside of the business units (i.e., the Bureaus of Consumer Protection 

and Competition) routinely monitor the data collection. For example, senior economists 

from the Bureau of Economics review statistical data used by the other bureaus to calculate 

performance results. Finally, in addition to the items described above, the FTC will update its 

Strategic Plan in FY 2009. During our update in FY 2009, the agency will reassess the validation 

procedures to ensure that changes to or addition of performance measures will be properly 

recorded and accurately reported. 

The Financial Management Office is responsible for providing direction and support on 

data collection methodology and analysis, ensuring that data quality checks are in place, and 

accurately reporting performance management data. Within the Performance Section, the FTC 

has identified the data sources for each performance measure.

 Performance Section 35 
 

 

Performance Measure Summary Table 

The tables that follow capture FY 2008 targeted performance compared to actual results. 

Strategic Goal 1: Protect Consumers 

Performance Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

Objective 1.1 Identify Fraud, Deception, and Unfair Practices That Cause the Greatest Consumer Injury 

1.1.1 Collect and enter complaints and inquiries into the 

consumer database. 1.75 million 3.05 million  N/A 

1.1.2 KEY MEASURE: The percentage of the 

agency’s consumer protection law enforcement 

actions that are responsive to the consumer complaint 

information gathered by the agency. 

65% 71%  N/A 

Objective 1.2 Stop Fraud, Deception, Unfairness, and Other Unlawful Practices Through Law Enforcement 

1.2.1 KEY MEASURE: Stop economic injury to 

consumers each year through law enforcement. 

$400 million $474 million  $2 billion 

1.2.2 Stop fraudulent, deceptive, unfair, and other 

unlawful practices by obtaining orders or conducting 

other direct interventions with businesses, resulting in 

a change in business conduct. 

130 orders 132 orders  N/A 

Objective 1.3 Prevent Consumer Injury Through Education 

1.3.1 Track consumer protection messages accessed 

online or in print. 

50 million 

messages 

49.2 million 

messages X N/A 

1.3.2 Track consumer protection messages related to 

identity theft, accessed online or in print. 

9 million 

messages 

11.4 million 

messages 

N/A 

1.3.3 Track consumer protection messages in Spanish, 

accessed online or in print. 

3 million 

messages 

2 million 

messages X N/A 

1.3.4 KEY MEASURE: Track (a) the number of 

times print media publish articles that refer to FTC 

consumer protection activities and (b) the circulation of 

media that publish those articles. 

(a) 2,500 

articles 

(b) 675 million 

circulation 

(a) 3,100 articles 

(b) 791 million 

circulation 





N/A 

36 Performance and Accountability Report—Fiscal Year 2008 
 

 

Strategic Goal 1: Protect Consumers (continued)
 

Performance Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

Objective 1.4 Enhance Consumer Welfare Through Research, Reports, Advocacy, and International 

Cooperation and Exchange 

1.4.1 KEY MEASURE: Convene or participate 

substantially in workshops and conferences on novel or 

challenging consumer protection problems or issues. 

6 workshops 

and conferences 

16 workshops 

and conferences 30 

1.4.2 Issue reports on novel or challenging consumer 

protection problems or issues. 8 reports 12 reports  40 

1.4.3 File public and advocacy comments with other 

federal and state government agencies. 

6 advocacy 

filings 

6 advocacy 

filings  30 

1.4.4 Cooperate with foreign government agencies on 

enforcement matters with cross-border components. 

20 foreign 

government 

agencies 

46 foreign 

government 

agencies 

100 

1.4.5 Provide consumer protection–related policy or 

technical input to foreign government agencies or 

international organizations. 

20 instances of 

policy or input 

88 instances of 

policy or input  100 

 Signifies that the target was met or exceeded or that the FTC is on track to meet the five-year target. 

X Signifies that the target was not met or that the FTC is not on track to meet the five-year target. 

N/A Signifies that the performance measure does not have a cumulative five-year target. 

 Performance Section 37
 

Strategic Goal 2: Maintain Competition
 

Performance Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

Objective 2.1 Identify Anticompetitive Mergers and Practices That Cause the Greatest Consumer Injury 

2.1.1 KEY MEASURE: Achieve positive outcomes* 

in matters in which Hart-Scott-Rodino (HSR) Act requests 

for additional information are issued. 

90% 100%  N/A 

2.1.2 KEY MEASURE: Percentage of significant 

nonmerger investigations that result in a positive 

outcome.* 

90% 100%  N/A 

2.1.3 Track the number of enforcement actions for the 

total mission, for (a) the merger and (b) nonmerger 

programs. 

Establish 

baseline 

(a) 21 

(b) 4 N/A 

2.1.4 Report the number of (a) second requests, 

(b) reportable transactions for which premerger 

notifications were received, (c) HSR investigations that 

resulted in enforcement action, (d) transactions in 

which antitrust issues were resolved through voluntary 

abandonment or restructuring because of FTC concerns, 

and (e) investigations closed because the evidence 

indicated that a competitive problem was unlikely. 

Establish 

baseline 

(a) 21 

(b) 1,656 

(c) 12 

(d) 2 

(e) 7 

N/A 

2.1.5 Track the number of significant nonmerger 

investigations closed each year (a) with enforcement 

action and (b) without enforcement action. 

Establish 

baseline 

(a) 4 

(b) 14 N/A 

Objective 2.2 Stop Anticompetitive Mergers and Business Practices Through Law Enforcement 

2.2.1 KEY MEASURE: Positive result* of cases 

brought by the FTC due to alleged violations. 

80% 96%  N/A 

2.2.2 Achieve savings for consumers through merger 

enforcement. $500 million $360 million X $2.5 billion 

* See respective performance measure discussion in the Performance Section for definitions of “positive outcome” and “positive result.” 

continued 

38 Performance and Accountability Report—Fiscal Year 2008 
 

Strategic Goal 2: Maintain Competition (continued)
 

Performance Measure FY 2008 

Target 

FY 2008 

Actual 

Five-Year 

Target 

2.2.3 Take action against mergers likely to harm 

competition in markets with a total of at least $125 billion in 

sales over a five-year period, $25 billion in sales each year.

 $25 billion $14.9 billion X $125 billion 

2.2.4 Achieve savings for consumers through nonmerger 

enforcement. $80 million $28 million X $400 million 

2.2.5 Take action against anticompetitive conduct in 

markets with a total of at least $40 billion in annual sales 

over a five-year period, $8 billion each year. 

$8 billion $0.4 billion X $40 billion X

2.2.6 Save consumers at least six times the amount of 

agency resources allocated to the merger program over a 

five-year period. (Efficiency Measure) 

600% 

(annual) 1,121%  600% (cumulative) 

2.2.7 Save consumers at least four times the amount of 

agency resources allocated to the nonmerger program 

over a five-year period. (Efficiency Measure) 

400% 

(annual) 164% X 400% (cumulative) X

Objective 2.3 Prevent Consumer Injury Through Education 

2.3.1 Quantify number of hits on antitrust information on 

the FTC’s website. 

15 million 

hits 12.5 million X N/A 

2.3.2 KEY MEASURE: Track (a) the number of 

times print media publish articles that refer to FTC 

competition activities and (b) the circulation of media 

that publish those articles. 

(a) 2,500 

articles 

(b) Establish 

baseline 

(a) 1,858 

articles 

(b) 397 

million 

X

N/A 

 Signifies that the target was met or exceeded or that the FTC is on track to meet the five-year target. 

X Signifies that the target was not met or that the FTC is not on track to meet the five-year target. 

N/A Signifies that the performance measure does not have a cumulative five-year target. 

continued

 Performance Section 39 
 

 

 

Strategic Goal 2: Maintain Competition (continued)
 

Performance Measure FY 2008 

Target 

FY 2008

 Actual 

Five-Year 

Target 

Objective 2.4 Enhance Consumer Welfare Through Research, Reports, Advocacy, and International 

Cooperation and Exchange 

2.4.1 Convene or participate substantially in workshops, 

conferences, seminars, and hearings involving significant 

competition-related issues. 

4 workshops, 

conferences, 

seminars, or 

hearings 

5 workshops, 

conferences, 

seminars, or 

hearings 

20 

2.4.2 KEY MEASURE: Issue studies, reports, and 

working or issues papers on significant competitionrelated issues. 

8 studies, 

reports, and 

papers 

7 studies, 

reports, and 

papers X

40 

2.4.3 KEY MEASURE: Make advocacy filings with 

other federal and state government agencies urging 

them to assess the competitive ramifications and costs 

and benefits to consumers of their policies. 

6 advocacy 

filings 

12 advocacy 

filings  30 

2.4.4 Issue advisory opinions to persons seeking agency 

review of proposed business actions. 2 to 3 opinions 1 opinion X 12 X

2.4.5 File amicus briefs with courts addressing 

competition-related issues. 2 to 3 briefs 1 brief X 12 

2.4.6 Track the volume of traffic on www.ftc.gov relating 

to competition, research, reports, advocacy, and internal 

cooperation and exchange. 

1.1 million 1.2 million  N/A 

2.4.7 KEY MEASURE: Track the number of (a) 

cases in which the FTC cooperated with a foreign 

competition authority, (b) consultations with or 

comments to foreign competition authorities, (c) written 

submissions to international fora, (d) international events 

attended, and (e) leadership positions held by FTC staff in 

international competition organizations. 

(a) 30 cases 

(b) 25 

consultations 

or comments 

(c) 7 

submissions 

(d) 8 events 

(e) 5 positions 

(a) 79 cases 

(b) 89 

consultations or 

comments 

(c) 30 

submissions 

(d) 68 events 

(e) 9 positions 











N/A 

40 Performance and Accountability Report—Fiscal Year 2008 
Strategic Goal 1: Protect Consumers 

Prevent Fraud, Deception, and Unfair Business Practices in the Marketplace 

I. Strategic View 

As the nation’s premier consumer protection agency, the FTC strives to protect consumers 

by preventing fraud, deception, and unfair business practices in the marketplace. The 

agency applies four related objectives to achieve this broad-reaching goal. 

Objective 1.1	 Identify fraud, deception, and unfair practices that cause 

the greatest consumer injury. 

The FTC identifies practices that cause consumer injury by analyzing the consumer 

complaint data collected in its Consumer Sentinel Network (CSN) database, holding 

public discussions, and monitoring the marketplace. 

Objective 1.2	 Stop fraud, deception, unfairness, and other unlawful practices 

through law enforcement. 

The FTC uses information gathered under Objective 1.1 to target its law enforcement 

efforts. Its law enforcement program aims to stop and deter fraud and deception, 

protect consumers’ privacy, and increase compliance with its consumer protection 

statutes. 

Objective 1.3	 Prevent consumer injury through education. 

The FTC targets its education efforts to give consumers the information they need 

to protect themselves from injury and to explain to businesses how to comply with 

applicable laws. 

Objective 1.4	 Enhance consumer welfare through research, reports, advocacy, 

and international cooperation and exchange. 

The FTC complements its law enforcement and education efforts by gathering, 

analyzing, and making public certain information concerning the nature of business 

practices in the marketplace. 

 Performance Section 41 
 

II. Strategic Analysis
 

Objective 1.1	 Identify fraud, deception, and unfair practices that cause 

the greatest consumer injury. 

Identifying the practices that cause the greatest consumer injury is the first step in 

preventing fraud, deception, and unfair business practices in the marketplace. 

Our Strategy 

To identify consumer protection problems, the FTC collects and analyzes data from 

many sources. Its Consumer Response Center receives consumer complaints and inquiries 

via a toll-free number (1-877-FTC-HELP); an Internet complaint form, available at www.ftc. 

gov; and the mail. Partners such as Better Business Bureaus, the Internet Crime Complaint 

Center (a partnership between the Federal Bureau of Investigation (FBI) and the National 

White Collar Crime Center), the U.S. Postal Inspection Service, Phone Busters (the Canadian 

fraud database), and the National Fraud Information Center of the National Consumers 

League also share with the FTC the consumer complaint data they collect. The FTC 

continues to pursue new international partnerships to increase its collection of information 

from consumer agencies in other countries. For example, through the econsumer website 

(www.econsumer.gov), the agency partners with other members of the International 

Consumer Protection Enforcement Network, an international group that identifies and 

shares information about worldwide consumer protection issues. 

This information is entered into a database within the FTC’s CSN, which replaced the 

Consumer Information System database, and is analyzed by FTC staff to identify current 

trends and to target fraudulent, deceptive, and unfair business practices. The agency 

shared the more than 12.2 million consumer fraud, identity theft, financial, and Do Not 

Call (DNC) Registry complaints that it has collected through FY 2008 with more than 1,700 

law enforcement organizations in the United States, Canada, and Australia via a secure 

CSN network. Although the FTC does not act on behalf of individual consumers, the 

consumer complaint database enables the FTC and its law enforcement partners to quickly 

spot trends and target the most serious consumer frauds reported by consumers, and 

coordinate law enforcement efforts. The ongoing input and analysis of current complaint 

data allows the FTC to move rapidly to stop illegal practices before they can cause more 

harm to consumers. 

Consumers can call the FTC’s identity theft toll-free number, 1-877-ID-THEFT, or view 

its website (www.consumer.gov/idtheft/) to obtain information about, and report, identity 

theft. At the end of FY 2008, the CSN contained more than 1.7 million identity theft 

complaints. The FTC uses this data to spot patterns that can help criminal law enforcement 

agencies prosecute identity theft and help individuals and businesses avoid the financial 

consequences of this crime. 

42 Performance and Accountability Report—Fiscal Year 2008 
 

 

 

The FTC and U.S. Secret Service Case Referral Program jointly identify criminal cases, 

and strong leads are referred to regional task forces, many led by the Secret Service 

Financial Crimes Division. The FTC’s Criminal Liaison Unit identifies law enforcement 

agencies and case agents for referral of specific types of consumer fraud cases. They also 

educate criminal law enforcement authorities about the FTC and its mission, and coordinate 

training of FTC staff by criminal law enforcement authorities to help staff prepare cases for 

referral and ensure smooth progress of parallel prosecutions. 

The FTC, in partnership with the Secret Service and the Department of Justice (DOJ), 

initiated a training program in 2002 to provide local and state law enforcement officers with 

practical tools to enhance combined efforts to combat identity theft, including information 

about accessing consumer complaint data. This training program provided on-site training 

to more than 900 officers from more than 250 agencies in FY 2008. To date, the FTC and its 

partners, who now include the U.S. Postal Inspection Service, the American Association of 

Motor Vehicle Administrators and the FBI, have conducted a total of 31 seminars, training 

more than 4,100 law enforcement officers from more than 1,350 agencies. 

Performance Results 

The key performance measure under this objective measures the percentage of 

agency consumer protection law enforcement actions that are responsive to the consumer 

complaint information gathered by the agency (Performance Measure 1.1.2). This measure 

Top Consumer Fraud Complaints in Calendar Year 2007 

Rank Category % of Total Complaints 

1 Identity Theft 32 

2 Shop-at-Home/Catalog Sales 8 

3 Internet Services 5 

4 Foreign Money Offers 4 

5 Prizes/Sweepstakes and Lotteries 4 

6 Computer Equipment and Software 3 

7 Internet Auctions 3 

8 Health Care Claims 2 

9 Travel, Vacations, and Timeshares 2 

10 Advance-Fee Loans and Credit Protection/Repair 2 

For the eighth year in a row, identity theft is the number one consumer fraud complaint 

category, accounting for 32 percent of the 813,899 total complaints received between January 

and December 2007. To learn more, visit www.ftc.gov/opa/2008/02/fraud.shtm.

 Performance Section 43 
 

 was added in the FTC’s 2006–2011 Strategic Plan to take the agency a step beyond 

counting the number of complaints collected to examining the extent to which these 

complaints help set the consumer protection agenda under this objective. 

Performance Measure 1.1.1 requires the FTC to collect and enter complaints and 

inquiries into the CSN. The large number of consumer complaints and inquiries collected 

provides the agency a broad view of what reporting consumers are experiencing. The 

CSN allows the FTC and its law enforcement partners to identify and develop cases against 

operators engaging in deceptive, fraudulent, and unfair practices that cause the greatest 

consumer injury. By analyzing consumer complaints, the FTC targets its enforcement and 

education efforts to the top areas of consumer complaints. Not only does the CSN help 

identify the most serious and commonly reported consumer protection problems, but the 

real-time analysis quickly informs the agency of emerging scams so it can move rapidly to 

stop ongoing consumer injury. Identity theft topped the annual list of top 10 complaint 

categories gathered by the agency. The FTC continues to focus law enforcement and 

education resources on this area of continuing concern to consumers and businesses, as 

well as the other areas identified as priorities. 

The following performance measures ensure that the agency’s enforcement activities 

are targeted at areas of greatest consumer concern. The results help the FTC to be 

responsive to consumer needs and changes in the marketplace, and use its consumer 

protection resources most efficiently and effectively. They also help the agency to 

effectively leverage its resources by sharing this valuable information with its domestic and 

international law enforcement partners. 

Performance Measure 1.1.1 

Collect and enter complaints and inquiries into the consumer database. (Numbers shown in thousands.) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

700 994 700 1,015 950 1,011 1,000 1,100 1,750 3,050 

Data Source: The FTC’s Consumer Sentinel Network. 

Target Exceeded. To aid in assessing its effectiveness in identifying fraudulent, deceptive, and unfair practices, 

the FTC measures the number of consumer complaints and inquiries added to its CSN each fiscal year. In FY 

2008, the FTC added more than three million entries into its database, 174 percent of the target of 1.75 million. 

This total includes the more than 1.75 million consumer complaints alleging DNC Registry violations that were 

added to the CSN for the first time in FY 2008. Due to the extent by which the FTC exceeded this target, the 

agency will reevaluate this performance measure and target in the 2009 update of the FTC Strategic Plan. 

44 Performance and Accountability Report—Fiscal Year 2008 
Key Measure: Performance Measure 1.1.2 

The percentage of the agency’s consumer protection law enforcement actions that are responsive to 

consumer complaint information gathered by the agency. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 50% 76% 65% 71% 

Data Source: Case managers report on e-questionnaires whether CSN complaints were used to identify the practices that resulted in a law 

enforcement action. 

Target Exceeded. In FY 2008, 71 percent, or 61 out of 87, of the agency’s actions were responsive to 

consumer complaint information. Other sources of information such as letters from consumers or businesses, 

congressional inquiries, and articles on consumer or economic subjects also may trigger FTC action. The 

target for this performance measure was based on an estimated percentage based on FY 2007 results. The 

target may be adjusted upward in FY 2009, and will continue to be monitored to determine a target that best 

represents the optimum use of these complaints.

 Performance Section 45
 

Objective 1.2	 Stop fraud, deception, unfairness, and other unlawful practices 

through law enforcement. 

Once fraud, deception, and unfair business practices are identified in the marketplace, 

the FTC focuses its law enforcement efforts on areas where it can have the greatest 

impact for consumers. 

Our Strategy 

Through its law enforcement efforts, the FTC stops 

fraudulent, deceptive, and unfair practices by obtaining 

court-ordered injunctions against defendants. Enforcement 

efforts include cases covering a range of topics, such as 

deceptive lending practices and credit counseling services, 

data security, DNC violations, technology abuses, and 

misleading environmental and health claims. 

The FTC plays a vital role in protecting consumers’ 

privacy, emphasizing both enforcement and education. 

It focuses on telemarketing, spam, identity theft, spyware 

and unauthorized adware, and financial privacy, through 

enforcement of the Controlling the Assault of Non-Solicited National Do Not Call Registry Pornography and Marketing Act of 2003 (CAN-SPAM), 

The FTC manages the National Do the Fair and Accurate Credit Transaction Act of 2003, the 

Not Call (DNC) Registry, which gives Gramm-Leach-Bliley Safeguards and Privacy Rules, the consumers the opportunity to limit Telemarketing Sales Rule, and Section 5 of the FTC Act. telemarketing calls. As of October 1, With advances in technology, spammers, spyware 2008, there were more than 172 million 

active registrations on the DNC Registry. operators, fraudulent telemarketers, and other scam 

The federal government created the artists can strike quickly on a global scale. An increasing 

national registry to make it easier and number of complaints the FTC receives involve 

more efficient for consumers to stop international transactions, and an increasing number getting unwanted telemarketing calls. of law enforcement investigations the FTC undertakes The Do-Not-Call Improvement Act of involve some international component. As a result, the FTC 2007, which became law in February has implemented a comprehensive program to combat 2008, ensures that telephone numbers 

placed on the DNC Registry will remain cross-border consumer protection law violations. The 

on it permanently. Consumers can FTC continues to develop new bilateral and multilateral 

register online at www.donotcall.gov or enforcement partnerships and to strengthen existing ones. 

call toll-free 1-888-382-1222 (TTY 1-866­ In the non-fraud area, the FTC works to ensure 290-4236) from the number they wish to compliance with the consumer protection statutes that it register. Registration is free. enforces. Given its broad jurisdiction and limited resources, 

it focuses on the most serious identified problems, using 

varied enforcement tools and encouraging self-regulation 

in appropriate situations. 

46 Performance and Accountability Report—Fiscal Year 2008 
Performance Results 

This objective has two performance measures. The key performance measure 

(Performance Measure 1.2.1) is to save consumers more than $400 million annually by 

stopping fraudulent, deceptive, and unfair practices in the marketplace. The second 

measure anticipates that the FTC will stop fraudulent, deceptive, unfair, and other unlawful 

practices by obtaining court orders or conducting other direct interventions that result in a 

change in business conduct in 130 actions (Performance Measure 1.2.2). 

These measures of the dollars saved and the number of orders obtained are important 

ones. The FTC’s experience in most cases is that once it files a complaint in federal district 

court and obtains a court order, the defendants stop their practices. If they fail to comply 

with an order, they are subject to contempt proceedings. By stopping these practices, the 

agency directly prevents further consumer losses caused by these defendants. Also, by 

publicizing these law enforcement actions and distributing consumer education materials, 

it alerts consumers to fraudulent and deceptive practices, educates them to avoid such 

practices in the future, and, ultimately, seeks to increase consumer confidence in the 

marketplace, while deterring similar behavior by would-be violators. 

The agency estimates consumer savings by assessing the economic injury to 

consumers during the 12 months prior to the FTC’s contacting the defendants or filing a 

complaint. In addition to obtaining court orders that stop these practices, Performance 

Measure 1.2.1 includes instances wherein which, as a result of FTC staff action directed 

specifically at a business, that business stops its allegedly unfair or deceptive practices, for 

example, where in one case, the staff issued a letter closing an investigation that outlines 

the business’ voluntary compliance. 

Key Measure: Performance Measure 1.2.1 

Stop economic injury to consumers each year through law enforcement. (Dollars shown in millions) 

Due to the potential of great variance of savings on an annual basis, this measure has a five-year 

target of $2 billion. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

$400 $349 $400 $366 $400 $293 $400 $519 $400 $474 

Data Source: To make dollar value assessments, staff uses company sales and other records, as well as information from employees and 

customers, where applicable. 

Target Exceeded. In FY 2008, the FTC saved consumers $474 million, 119 percent of its annual target.

 Performance Section 47 
 

Performance Measure 1.2.2 

Stop fraudulent, deceptive, unfair, and other unlawful practices by obtaining orders or conducting 

other direct interventions with businesses resulting in a change in business conduct. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 130 137 130 132 

Data Source: Various sources, such as litigation status reports, the Commission docket of adjudicative cases, reports of final consent orders 

accepted by the Commission, the Public Access to Court Electronic Records service, FTC press releases, and various other agency, bureau, 

division, and regional office reports. 

Target Exceeded. In FY 2008, the FTC obtained orders or conducted other direct interventions totaling 132, 102 

percent of its target. 

48 Performance and Accountability Report—Fiscal Year 2008 
 

 

 

 

Objective 1.3 Prevent consumer injury through education. 

An educated consumer and business community is a first line of defense against 

fraud and deception. 

Our Strategy 

The FTC is committed to using education and 

outreach as cost-effective methods to prevent consumer 

injury, increase business compliance, and leverage its 

law enforcement program. Virtually every consumer 

protection effort contains an educational component, 

from compliance efforts including Internet surfing and law 

enforcement sweeps to the announcement of new rules 

and regulations. Through FTC publications and websites, as 

well as external media, the agency reaches out to tens of 

millions of consumers and businesses every year on issues 

that directly impact their daily activities. 

The CSN helps the FTC tailor its education efforts to 

topical areas where fraud, deception, unfair practices, and 

information gaps are causing the greatest injury. Through 

the FTC’s education efforts, consumers are given the 

tools they need to spot potentially fraudulent and other 

illegal promotions, and businesses are advised of how 

they can comply with the law. As with the agency’s law 

enforcement activities, more of its educational efforts 

now involve the Internet. The Internet plays an integral 

role in the FTC’s education, deterrence, and enforcement 

efforts by permitting the agency to reach vast numbers 

of consumers and businesses quickly, efficiently, and 

inexpensively. Through the Internet, our education efforts 

have not only a national impact, but also a global effect. 

The FTC coordinates with hundreds of private and public 

partners to provide information about specific education 

campaigns, products, and services. 

To reach the growing population of Hispanic 

consumers in the United States, the FTC has expanded 

its Hispanic Outreach Program. The Spanish-language 

Consumer Information and the 

Mortgage Market 

With mortgage concerns on many 

minds, the FTC gave added priority to 

the mortgage/subprime credit area. 

The FTC published a variety of relevant 

articles for consumers in both English 

and Spanish, including “How to Manage 

Your Mortgage If Your Lender Closes or 

Files for Bankruptcy” and “Foreclosure 

Rescue Scams: Another Potential Stress 

for Homeowners in Distress.” To help 

consumers understand the jargon they 

may encounter when buying or selling a 

home, the FTC created “The Real Estate 

Marketplace Glossary: How to Talk the 

Talk.” Learn more by visiting www.ftc.gov/ 

bcp/menus/consumer/credit/mortgage. 

shtm. In addition, a consumer alert, 

“Looking for the Best Mortgage: Shop, 

Compare, and Negotiate,” can be found 

at www.ftc.gov/bcp/edu/pubs/consumer/ 

homes/rea09.shtm.

page on the FTC website, www.ftc.gov/ojo, continues to increase its library of translated 

consumer publications. 

Going forward, the FTC will continue to focus consumer and business education efforts 

on emerging consumer protection issues as well as those subjects identified by its 

 Performance Section 49 
 

 

 

 

consumer complaint databases where information gaps cause the greatest injury. The FTC 

will continue to use technology creatively, including new interactive media, to extend the 

reach of its consumer and business education. 

Performance Results 

The FTC’s key performance measure under this objective gauges the agency’s impact 

by tracking the number of times print media publish articles that refer to FTC consumer 

protection activities and the circulation of media that publish those articles (Performance 

Measure 1.3.4). This measure takes a step beyond counting the number of hits on the FTC’s 

consumer protection web pages. 

The remaining three measures (Performance Measures 1.3.1, 1.3.2, and 1.3.3) help the 

FTC gauge the impact of its education efforts by tracking the number of consumer and 

business education publications it distributes in response to requests from the public. 

These performance measures help ensure that the agency is engaging in a sufficient 

amount of educational activity and that the educational materials are aimed at particularly 

vulnerable populations. 

The FTC seeks to alert as many consumers as possible to the telltale signs of fraud, 

deception, unfair business practices, and other critical consumer protection issues through 

dissemination of its education messages. Ideally, the agency would like to measure the 

extent to which its educational materials improve consumer understanding and help 

consumers get better value for their money. This effect would be extremely difficult to 

measure, but tracking the distribution of publications provides a rough idea of how many 

consumers the FTC is reaching. The measure of the number of publications distributed by 

the FTC indicates its impact in educating consumers, although it does not fully capture the 

millions of FTC publications that are distributed to consumers through the FTC’s partners. 

Performance Measure 1.3.1 

Track consumer protection messages accessed online or in print. (Numbers shown in millions.) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

15 26.5 20 35.3 25 53 45 47 50 49.2 

Data Source: The FTC tracks its publication inventory to determine the number of print messages accessed, and uses a computer software 

program to compile the number of FTC website accesses. 

Target Not Met. In FY 2008, the FTC accomplished 99 percent of its target of 50 million publications. Of the 

49.2 million consumer protection messages accessed, nearly 40 million were accessed online and more than 

nine million were print publications distributed by the FTC. While the number of print publications distributed 

has remained relatively static over the last decade, the number of publications accessed through the Internet 

has soared as more consumers and businesses have gone online. The performance measure and target will be 

re-evaluated in the 2009 update of the FTC Strategic Plan. 

50 Performance and Accountability Report—Fiscal Year 2008 
Performance Measure 1.3.2 

Track consumer protection messages related to identity theft, accessed online or in print. 

(Numbers shown in millions.) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

2.5 3.7 3 3.7 3.3 9.4 8 9.6 9 11.4 

Data Source: As a subset of the totals tracked in Performance Measure 1.3.1, the FTC tracks the number of consumer protection messages 

related to the high-profile and emerging issues of data security and identity theft. The FTC tracks its publication inventory to determine 

the number of print messages accessed, and uses a computer software program to compile the number of FTC website accesses. 

Target Exceeded. In FY 2008, the FTC accomplished 127 percent of its target of nine million. The 11.4 million 

result includes more than eight million messages accessed online, and nearly three million print publications 

distributed, including nearly 25,000 consumer education how-to kits provided to community members 

interested in giving presentations on identity theft. The performance measure and target will be re-evaluated 

in the 2009 update of the FTC Strategic Plan. 

Performance Measure 1.3.3 

Track consumer protection messages in Spanish, accessed online or in print. 

(Numbers shown in millions.) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

0.4 0.7 0.5 1.1 0.6 2.4 2.2 2.2 3.0 2.0 

Data Source: As a subset of the totals tracked in Performance Measure 1.3.1, the FTC tracks the number of consumer protection messages, in 

Spanish, accessed online or in print. The FTC tracks its publication inventory to determine the number of print messages accessed, and uses a 

computer software program to compile the number of FTC website accesses. 

Target Not Met. In FY 2008, the FTC accomplished 66 percent of its target of three million. The two million 

result includes nearly 1.5 million messages accessed online, and more than 500,000 print publications 

distributed. Although the FY 2008 target, based on past growth, was not met, the agency’s media outreach 

continues to be active, its list of partnerships is growing, and community outreach efforts through its 

newsletter and conference participation continue to be strong. 

 Performance Section 51
 

Key Measure: Performance Measure 1.3.4 

Track (a) the number of times print media publish articles that refer to the FTC consumer protection 

activities and (b) the circulation of media that publish those articles. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A Establish 

Baseline 

(a) 3,066 

(b) 863 

million 

(a) 2,500 

articles 

(b) 675 

million 

circulation 

(a) 3,100 

articles 

(b) 791 

million 

circulation 

Data Source: To determine the number of articles, the agency performs a LexisNexis search of the “U.S. Newspapers and Magazines” database. 

This includes national newspapers, local newspapers, hundreds of magazines, and industry sources. Data on average circulation are drawn 

from The Standard Periodical Directory (Twenty-eighth edition, 2005), or directly from the publishers of the periodicals. 

Targets Exceeded. In FY 2008, the FTC accomplished 125 percent of its target of 2,500 articles, and 117 percent 

of its target of a circulation of 675 million. As this was a new measure in FY 2007, the actual results were used 

to establish a baseline for the FY 2008 target. The performance measure and target will be re-evaluated in the 

2009 update of the FTC Strategic Plan. 

52 Performance and Accountability Report—Fiscal Year 2008 
Objective 1.4	 Enhance consumer welfare through research, reports, advocacy, 

and international cooperation and exchange. 

Research, reports, advocacy, and international cooperation and exchange complement 

law enforcement and education to enhance the welfare of consumers. 

Our Strategy 

This fourth objective and its related performance 

measures were added in the FTC’s 2006–2011 Strategic 

Plan to capture the FTC’s increasing use of a variety of 

strategies in addition to law enforcement and education 

to enhance consumer welfare. It was the agency’s first 

attempt to quantify these important activities. Notably, the 

agency convenes conferences and workshops through 	

which experts and other experienced and knowledgeable 

parties identify novel or challenging consumer protection 

issues and discuss ways to address those issues. The FTC 

also issues reports that the Congress has mandated or 

that the agency has prepared on its own initiative that 

analyze consumer protection problems and suggest public 

and private sector policies to address them, such as selfregulatory efforts. Further, the FTC files comments with 

federal and state government bodies advocating policies 

that promote the interests of consumers and highlight the 

role of consumer and empirical research in their decision 

making. The agency also testifies before the Congress on 

consumer protection issues. 

Cross-Border Fraud 

Cross-border fraud is a serious 

problem—and it appears to be growing. 

Consumers in the United States and 

other countries lose billions of dollars 

each year to telemarketers operating 

from “boiler rooms” across the border 

who pitch bogus products, services, 

and investments. Consumers also lose 

money to Internet scam artists who 

operate anonymously from places 

outside the United States. The most 

common cross-border frauds pushed 

by telemarketers, spam emailers, or 

misleading advertisements involve 

phony prize promotions, foreign lottery 

schemes, advance-fee loan rip-offs, 

travel offer scams, and unnecessary 

credit card loss “protection.” Visit 

www.ftc.gov/bcp/conline/edcams/

crossborder/ to learn more.

The FTC also engages in a variety of international 

cooperation, exchange, and advocacy activities designed 

to promote market-based consumer protection policies 

and effective cross-border coordination. Finally, the FTC 

files amicus briefs (friend of the court briefs) to aid courts’ 

considerations of important consumer protection issues. 

Adding this objective and related performance measures is just the first step to 

capturing the impact of these activities. Going forward, the FTC will develop new 

performance measures under this objective to help determine the outcome of its efforts to 

augment its enforcement and education activities by encouraging discussions among all 

interested parties, as well as careful study of and empirical research on novel or challenging 

consumer protection problems, such as green marketing and behavioral advertising. 

These activities will continue to enhance consumer welfare by guiding the FTC’s consumer 

protection policy decisions, as well as the decisions of other state, federal, and international 

policymakers. 

 Performance Section 53 
 

Performance Results 

The key performance measure under this objective gauges the FTC’s efforts to 

enhance consumer welfare by tracking the number of workshops on novel or challenging 

consumer protection problems or issues the FTC convenes or substantially participates in 

(Performance Measure 1.4.1). Various industries have given great weight to the FTC’s policy 

efforts that have resulted in part from what has been learned through its workshops. For 

example, after convening a workshop on marketing, self-regulation, and childhood obesity, 

the FTC has continued to encourage industry self-regulation in this area. 

The FTC also gauges the impact of its efforts to enhance consumer welfare by 

tracking the number of reports it issues on novel or challenging consumer protection 

issues (Performance Measure 1.4.2) and tracking the number of public and advocacy 

comments it files with other federal and state government agencies (Performance Measure 

1.4.3). The agency tracks its international consumer protection efforts to cooperate with 

foreign government agencies on enforcement matters with cross-border components 

(Performance Measure 1.4.4), and to provide consumer protection related policy or 

technical input related to foreign government agencies or international organizations 

(Performance Measure 1.4.5). 

As stated above, these performance measures assist the FTC in determining the impact 

of its activities using these important tools. Its next step will be to attempt to measure their 

impact on consumers, businesses, industry, partners, and other stakeholders, and related 

policy, in order to assure the most efficient and effective use and leveraging of agency 

resources in these areas. The FTC will undertake this effort in the next update of its Strategic 

Plan in 2009. 

Key Measure: Performance Measure 1.4.1 

Convene or participate substantially in workshops and conferences on novel or challenging 

consumer protection problems or issues. The five-year target is 30 workshops. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 6 10 6 16 

Data Source: The agency counts the number of workshops and conferences by examining various sources, such as agency reports, FTC press 

releases, weekly Bureau planners, and responses to direct inquiries to divisions and regional offices. 

Target Exceeded. In FY 2008, the FTC exceeded its target and convened or participated substantially in 16 

workshops and conferences on novel or challenging consumer protection problems or issues. The five-year 

target is 30 workshops. The performance measure and target will be re-evaluated in the 2009 update of the 

FTC Strategic Plan. 

54 Performance and Accountability Report—Fiscal Year 2008 
Performance Measure 1.4.2 

Issue reports on novel or challenging consumer protection problems or issues. The five-year target is 

40 reports. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A NA NA N/A N/A N/A 8 8 8 12 

Data Source: Various sources, such as FTC press releases, weekly Bureau reports, and responses to direct inquiries of divisions and regional 

offices. 

Target Exceeded. In FY 2008, the FTC accomplished 150 percent of its target of eight reports. The five-year 

target is 40 reports. The performance measure and target will be re-evaluated in the 2009 update of the FTC 

Strategic Plan. 

Performance Measure 1.4.3 

File public and advocacy comments with other federal and state government agencies. The five-year 

target is 30 advocacy filings. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 6 7 6 6 

Data Source: Various sources, such as agency reports, FTC press releases, weekly Bureau planners, and responses to direct inquiries to divisions 

and regional offices. 

Target Met. In FY 2008, the FTC accomplished 100 percent of its target of six public and advocacy comments. 

The five-year target is 30 advocacy filings. The performance measure and target will be re-evaluated in the 

2009 update of the FTC Strategic Plan.

 Performance Section 55
 

Performance Measure 1.4.4 

Cooperate with foreign government agencies on enforcement matters with cross-border 

components. The five-year target is 100 government agencies, or 20 per year. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 20 23 20 46 

Data Source: Internal weekly reports to the Chairman, litigation assistance case logs, trip and visitor logs, and other informal sources. 

Target Exceeded. In FY 2008, the FTC accomplished 230 percent of its target of 20 matters. The five-year target 

is 100 matters, or 20 per year. The performance measure and target will be re-evaluated in the 2009 update of 

the FTC Strategic Plan. 

Performance Measure 1.4.5 

Provide consumer protection related policy or technical input to foreign government agencies or 

international organizations. The five-year target is 100 instances, or 20 per year. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 20 34 20 88 

Data Source: Internal weekly reports to the Chairman, litigation assistance case logs, trip and visitor logs, and other informal sources. 

Target Exceeded. In FY 2008, the FTC accomplished 440 percent of its target of 20 instances. The five-year 

target is 100 instances, or 20 per year. The performance measure and target will be re-evaluated in the 2009 

update of the FTC Strategic Plan. 

Resources Utilized—Strategic Goal 1 

(Dollars shown in millions) 

2004 2005 2006 2007 2008 

Full-Time Equivalents 555 546 548 570 591 

Obligations $105 $115 $116 $126 $140 

Net Cost $90 $94 $98 $105 $124 

Note: Differences between these obligations and net costs and the financial statements are due to rounding. 

56 Performance and Accountability Report—Fiscal Year 2008 
Strategic Goal 2: Maintain Competition 

Prevent Anticompetitive Mergers and Other Anticompetitive Business 

Practices in the Market Place

I. Strategic View 

A key function of the FTC is to protect and strengthen the free and open markets that are 

the cornerstone of a vibrant economy. Aggressive competition among sellers in an open 

marketplace gives consumers the benefit of lower prices, higher quality products and 

services, maximum choice, and innovation, leading to beneficial new products and services. 

The FTC seeks to promote vigorous competition by using the antitrust laws to prevent 

anticompetitive mergers and to stop business practices that diminish competition, such 

as agreements among competitors about prices or other aspects of competition (referred 

to as nonmerger enforcement). The agency applies four related objectives to achieve this 

broad-reaching goal. 

Objective 2.1 Identify anticompetitive mergers and practices that cause 

the greatest consumer injury. 

The FTC identifies mergers and business practices that have resulted in or are likely to 


result in anticompetitive effects by conducting thorough factual investigations and 


applying economic analysis to distinguish between actions that threaten the operation 


of free markets and those that are benign or procompetitive. 


Objective 2.2 Stop anticompetitive mergers and business practices 

through law enforcement. 

When the FTC identifies a harmful or potentially harmful merger or business practice, 


it takes enforcement action under the antitrust laws to stop it, either through an 


administrative challenge or in federal court. In many instances, the agency is able to 


reach an agreement with the parties that remedies its competitive concerns and avoids 


litigation. 


Objective 2.3 Prevent consumer injury through education. 

The FTC seeks to prevent anticompetitive activity by educating businesses and 


consumers about the antitrust laws and its efforts to ensure competitive markets. 


Objective 2.4 Enhance consumer welfare through research, reports, advocacy, 

and international cooperation and exchange. 

The FTC seeks to advance its mission to maintain competition and enhance consumer 


welfare by gathering, analyzing, and making public certain information concerning the 


nature of competition as it affects U.S. commerce.
 

 Performance Section 57 
 

II. Strategic Analysis
 

Objective 2.1 Identify anticompetitive mergers and practices that cause 

the greatest consumer injury. 

Identifying anticompetitive mergers and anticompetitive business conduct is the first 

step in effective antitrust enforcement. 

Our Strategy 

The FTC seeks to identify anticompetitive mergers and practices with as much accuracy 

as possible. While certain business conduct (such as price fixing among competitors) is 

clearly anticompetitive, mergers and many other forms of business conduct can benefit, 

harm, or have no effect on consumers. Consequently, both under- and over-enforcement 

can harm consumers’ interests. The agency seeks to take enforcement action against 

transactions or conduct that harms or is likely to harm consumers, but at the same time, 

avoid taking enforcement action that prevents businesses from completing transactions 

or engaging in practices that fundamentally benefit consumers or have no competitive 

effect. The FTC also tries to identify enforcement targets as efficiently as possible so that 

it can devote the bulk of its resources to further investigation of, and possible challenge 

to, the most problematic mergers and practices. A related, but important, consideration 

is to conduct the inquiry in a way that minimizes the cost or inconvenience to businesses, 

while still enabling the agency to gather sufficient information to support its enforcement 

decisions. 

Merger Activities. The premerger notification requirements of the Hart-ScottRodino (HSR) Act provide the FTC with an effective starting point for identifying potentially 

anticompetitive mergers, acquisitions, and joint ventures (collectively referred to as mergers) 

before they are consummated. The HSR Act requires companies to report certain proposed 

mergers to the FTC and the DOJ (which jointly enforce the HSR Act) and wait for a specified 

period (usually 30 days) to allow for antitrust review. 

FTC staff examine each transaction to determine whether it poses a threat to 

competition. In most cases, a reasonable judgment can be made about whether the 

merger has the potential to be anticompetitive based on the materials filed with the HSR 

Act notification. A formal request for additional information may be issued by the FTC. 

This is referred to as a “second request.” Because the HSR statute permits only one request 

for additional information, an investigation extended by the issuance of a second request 

typically requires a significant investment of FTC resources and the parties involved. 

Despite filing thresholds that are now adjusted annually for inflation, and some decline 

in merger activity from the historic peak levels reached during the late 1990s, the FTC 

continued to face a demanding merger review workload in FY 2008. Since the low point in 

reportable transactions observed in FY 2004, filings have steadily climbed at an average rate 

58 Performance and Accountability Report—Fiscal Year 2008 
of around 20 percent per year, reaching a peak of 2,108 reported transactions in FY 2007. FY 

2008 data show that, at least temporarily, this trend has reversed itself. Indeed, in the last 

fiscal year, the number of reportable transactions declined by approximately 20 percent, 

reaching 1,656 transactions. This has been accompanied by an even sharper downturn in 

the value of reported transactions, which decreased by over 40 percent. Notwithstanding 

the difficulty inherent in predicting trends in HSR filings, the data seem to suggest that 

filings in the upcoming fiscal year could approximate the levels reached in FY 2004 or FY 

2005, or between 1,400 or 1,500 reportable transactions, although it is too early to tell 

how significant changes in the financial markets may be impacting the funding available 

for business or stock acquisitions. The expectation regarding the level of reportable 

2,300 

2,200 

2,100 

2,000 

1,900 

1,800 

1,700 

1,600 

1,500 

1,400 

1,300 

1,200 

1,100 

1,000 

900 

800 

700 

600 

500 

400 

300 

200 

100 

0 

50 

48 

46 

44 

42 

40 

38 

36 

34 

32 

30 

28 

26 

24 

22 

20 

18 

16 

14 

12 

10 

8 

6 

4 

2 

0 

Reportable & Billable Transactions 

HSR Reportable & Billable Transactions 

Second Requests 

Merger Enforcement Actions 

Second Requests & Enforcement Actions 

2002 2003 2004 2005 2006 2007 2008 

Fiscal Year 

This graph shows the level of merger activity for FY 2002 though 2008. The green line, 

plotted against the left hand vertical axis, shows the number of transactions for which a 

second request could have been issued. The yellow and blue lines, plotted against the right 

hand vertical axis, display, respectively, the number of second requests issued by the FTC in 

each fiscal year and the number of merger enforcement actions obtained in the same period. 

The trends exhibited show that the agency has continued to vigorously review merger filings 

and to challenge those transactions that are likely to harm competition. Indeed, between 

FY 2007 and FY 2008, while the number of transactions declined by approximately 20 

percent, the number of second requests issued declined by only 14 percent, and the ratio of 

enforcement actions to the number of transactions increased by more than 20 percent. 

Trends in Merger Activity

 Performance Section 59
 

transactions for the upcoming year, coupled with the increased attention placed on 

complex merger matters relating to intellectual property and high-tech industries, means 

that the FTC will continue to devote considerable resources to the merger review process. 

A review of enforcement data for FY 2008 reveals that even though filings have decreased 

from FY 2007 to FY 2008, the number of merger investigations opened has remained 

almost the same, while the number of enforcement actions has actually risen slightly. 

While the major HSR Act amendments in 2001 reduced the number of mergers 

subject to the advance reporting requirement, they did not change the standard of 

legality for mergers. The vast majority of potentially problematic mergers continue to be 

subject to the revised HSR filing requirements, but smaller merger transactions may still be 

anticompetitive. Consequently, the FTC continues to devote attention to the identification 

of unreported, usually consummated, mergers that could harm consumers. This effort 

involves monitoring the trade press, industry sources, and the Internet to stay informed 

of industry developments; following up on case leads from congressional offices, other 

Executive Branch agencies, and state and local governments; and encouraging consumers, 

businesses, and the bar to notify the FTC of possible anticompetitive mergers. 

Nonmerger Activities. In the nonmerger area, agency staff review complaints 

received from consumers, businesses, congressional offices, and elsewhere to identify 

potentially anticompetitive nonmerger business practices. In addition to responding to 

complaints, the FTC has pursued a “positive agenda” of planned initiatives; that is, the 

agency has taken a systematic and proactive approach to identifying specific conduct likely 

to pose the greatest threat to consumer welfare. Fundamentally, the focus continues to be 

on the types of practices, such as agreements among competitors, that are most likely to 

harm consumers. 

Other considerations include whether the relevant sector of the economy, such as 

energy, health care, real estate, or high technology, is one that has a significant impact 

on consumers’ daily lives. Also, the agency considers the deterrent effects of antitrust 

enforcement on businesses and whether the FTC has enforcement experience in an area 

that will enable the agency to make an impact quickly and efficiently. Finally, consideration 

is given to whether the matter presents an opportunity to contribute positively to the 

development of antitrust law. 

Performance Results 

There are two key performance measures under this objective. They are to obtain 

a positive outcome in at least 90 percent of HSR requests for additional information 

(Performance Measure 2.1.1) and to conclude at least 90 percent of significant nonmerger 

investigations (those with at least 150 hours of investigative effort) with a positive outcome 

(Performance Measure 2.1.2). 

Success on these two key outcome measures indicates that the FTC is effectively 

screening HSR reported mergers and nonmerger investigations to identify those that raise 

60 Performance and Accountability Report—Fiscal Year 2008 
significant antitrust issues and warrant further investigation and possible enforcement 

action while at the same time permitting deals or conduct that are neutral or beneficial to 

consumers to proceed unimpeded. The three remaining measures (Performance Measures 

2.1.3, 2.1.4, and 2.1.5) under this objective require that the FTC report detailed supplemental 

information on its merger and nonmerger activities. These measures are directly related 

to Performance Measures 2.1.1 and 2.1.2, and their purpose is to provide an informative 

backdrop against which the key performance measures can be contextualized. Thus, 

for example, the result obtained in key Performance Measure 2.1.1 (95 percent positive 

outcomes), taken by itself, reveals the extent to which the agency was successful in 

challenging mergers subject to second request investigation. 

The three remaining measures provide the underlying data used to generate the 95 

percent result and an indication of the breadth and scope of the agency’s merger review 

process. For example, Performance Measure 2.1.4 specifies that the agency will track and 

report on the number of reportable transactions and related second requests, the number 

of HSR enforcement actions, and investigations closed because the evidence indicated 

that a competitive problem was unlikely. As such, the agency has not set targets for these 

measures and is tracking the results.

 Performance Section 61 
 

Key Measure: Performance Measure 2.1.1 

Achieve positive outcomes in matters in which HSR requests for additional information are issued 

(note: final outcome of cases are reported in Performance Measure 2.2.1). 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

60–80% 55% 60–80% 52% 60–80% 59% 90% 100% 90% 100% 

Data Source: Information on the outcome of second request investigations is obtained from FTC press releases, agency databases, as well 

as internal communications from staff attorneys. Press releases are the source of information for public actions, such as consent orders, 

preliminary injunctions, and the results of judicial review, while internal communications are used to identify those investigations that 

were closed because parties abandoned a transaction or because staff did not find that the transaction potentially could harm competition. 

Internal communications are also used to identify those matters that were originally closed, but where subsequent events indicated that the 

transaction injured competition. These data are then cross referenced with the list of known second request investigations as recorded in the 

official agency database to calculate the performance measure. 

Target Exceeded. The FTC obtained a positive outcome in 20 out of 20 second request investigations that 

were concluded in FY 2008, or 100 percent. The FTC obtained 10 consent orders, authorized staff to file one 

preliminary injunction in federal court seeking to block a merger, raised anticompetitive concerns causing 

the parties to withdraw two transactions, and finally, closed seven investigations without subsequent events 

indicating that the transaction injured competition. In the case where staff was authorized to file a preliminary 

injunction, the Commission also issued an administrative complaint; however, for measurement purposes this 

investigation is counted only once. For mergers, a positive outcome includes: 

•	 Commission authorization of a complaint for preliminary injunction in federal court 

•	 Issuance of an administrative complaint 

•	 Acceptance of a consent agreement 

•	 The parties’ voluntary abandonment or restructuring of a proposed transaction 

based on FTC antitrust concerns

•	 Closing of an investigation without subsequent events indicating that the transaction 

injured competition 

Negative outcomes would include closing investigations that are later determined to raise significant 

antitrust issues. 

62 Performance and Accountability Report—Fiscal Year 2008 
 Performance Section 63

Key Measure: Performance Measure 2.1.2 

Percentage of significant nonmerger investigations that result in a positive outcome. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

60–80% 63% 60–80% 50% 60–80% 40% 90% 100% 90% 100% 

Data Source: Information on the outcome of significant nonmerger investigation is obtained from press releases, various agency and Bureau 

databases, as well as internal communications. Press releases are the source of information for public actions, such as consent orders, 

permanent injunctions, and the results of judicial review, while internal communications are used to identify those matters that were 

originally closed, but where subsequent events indicated that the business practice injured competition. These data are then cross referenced 

with information on the number of hours logged to each investigation to identify those that meet the significance threshold (i.e., more than 

150 hours). 

Target Exceeded. The FTC achieved a positive outcome in 18 out of 18 significant nonmerger investigations, 

or 100 percent. Specifically, the FTC obtained three consent orders, filed one permanent injunction in federal 

court, and closed 14 significant nonmerger investigations without subsequent events indicating that the 

business practice injured competition. For nonmergers, a positive outcome includes: 

•	 Commission authorization to file a complaint in federal court 

•	 Issuance of an administrative complaint 

•	 Acceptance of a consent agreement 

•	 Resolution of antitrust concerns without enforcement action 

•	 Closing of an investigation without subsequent events indicating that the business 

practice injured competition 

As with Performance Measure 2.1.1, a negative outcome would include closing investigations that are later 

determined to raise significant antitrust issues.
 

Performance Measure 2.1.3 

Track the number of enforcement actions for the total mission, for the (a) merger and (b) nonmerger 

actions. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A Establish 

Baseline 

(a) 22 

(b) 11 

Establish 

Baseline 

(a) 21 

(b) 4 

Data Source: Information on merger and nonmerger enforcement actions is taken from the FTC’s press releases and internal communications 

from staff attorneys. Press releases are the source of information for public actions, such as consent orders and preliminary and permanent 

injunctions, while internal communications are used to identify those merger enforcement matters where the parties voluntarily abandoned 

or restructured a proposed transaction based on FTC antitrust concerns. 

As mentioned above, this measure is intended to provide the supporting information needed to place the two 

key Performance Measures 2.1.1 and 2.1.2 in the appropriate context and is not intended to be evaluated as a 

stand-alone measure. Thus, where the result under Performance Measure 2.1.1 states that the agency obtained 

a positive outcome in 100 percent of second request investigations, this measure tells how many (output) of 

those positive outcomes are enforcement actions. 

Enforcement actions include Commission authorization of a complaint for preliminary injunction or 

permanent relief in federal court, issuance of an administrative complaint, acceptance of a consent agreement, 

and, for mergers, the parties’ voluntary abandonment or restructuring of a proposed transaction based on 

FTC antitrust concerns. In FY 2008, the FTC obtained 21 merger enforcement actions and four nonmerger 

enforcement actions. In addition to the 10 merger consent agreements accepted for comment and the two 

withdrawn transactions that are cited under Performance Measure 2.1.1, which tracks the positive outcomes 

of second request investigations, the FTC obtained three other consent agreements and three additional 

abandoned or restructured transactions in non-second request merger investigations. 

64 Performance and Accountability Report—Fiscal Year 2008 
Performance Measure 2.1.4 

Report the number of (a) second requests, (b) reportable transactions for which premerger 

notifications were received, (c) HSR investigations that resulted in enforcement action, (d) transactions 

in which antitrust issues were resolved through voluntary abandonment or restructuring because 

of FTC concerns, and (e) investigations closed because the evidence indicated that a competitive 

problem was unlikely. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A Establish 

Baseline 

(a) 31 

(b) 2,108 

(c) 20 

(d) 5 

(e) 11 

Establish 

Baseline 

(a) 21 

(b) 1,656 

(c) 12 

(d) 2 

(e) 7 

Data Source: Information on the number of second requests and the number of reportable transactions is obtained from the FTC’s Premerger 

Office and cross-referenced with data from the agency matter management database, while information on the number of enforcement 

actions and on the investigations closed without enforcement action is obtained from press releases and internal communications. 

This measure reports detailed supplemental information on the FTC’s merger activities and is intended to 

provide the context against which to assess the results obtained under key Performance Measure 2.1.1. This 

measure tells us how many transactions were reports that could have been subject to a second request, how 

many second requests were actually issued, and the outcome of these investigations. 

Performance Measure 2.1.5 

Track the number of significant nonmerger investigations closed each year, (a) with enforcement 

action and (b) without enforcement action. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A Establish 

Baseline 

(a) 11 

(b) 17 

Establish 

Baseline 

(a) 4 

(b) 14 

Data Source: Information on significant nonmerger investigations is obtained from press releases, various agency and Bureau databases, 

as well as internal communications. Press releases are the source of information for public actions, such as consent orders and permanent 

injunctions, while the internal matter management database is used to identify those nonmerger matters that were closed without an 

enforcement action. These data are then cross referenced with information on the number of hours logged to each investigation to identify 

the ones that meet the significance threshold (i.e., more than 150 hours). 

As in the case of the two previous measures, this measure reports detailed supplemental information on the 

FTC’s nonmerger (Key Performance Measure 2.1.2) activities, and is intended to facilitate evaluation of the 

results of that measure.

 Performance Section 65
 

Objective 2.2 Stop anticompetitive mergers and business practices 

through law enforcement. 

Law enforcement represents the most direct method by which the FTC pursues its 

goal of stopping mergers and business practices that significantly threaten competition 

and harm consumers. 

Our Strategy What is Antitrust? 

In both merger and nonmerger enforcement, the FTC 

focuses primarily on transactions or practices most likely to 

harm consumers, that is, mergers of firms competing in the 

same market or markets, and agreements among direct 

competitors. Other activities, such as unilateral action 

by a single firm, or a merger or agreement involving a 

supplier and customers or between a firm and a potential 

competitor, also may threaten competition and therefore 

are subject to FTC scrutiny. Given the agency’s limited 

resources and given that the FTC and DOJ jointly enforce 

the antitrust laws, the FTC directs much of its attention 

and resources to certain segments of the economy that 

are particularly important to consumers and in which it 

has particular expertise. These include energy, health care, 

pharmaceuticals, real estate, and technology. 

The word “antitrust” dates from the 

late 1800s, when powerful companies 

dominated industries, working together 

as “trusts” to stifle competition. Thus, 

laws aimed at protecting competition 

have long been labeled “antitrust laws.” 

Fast forward to the 21st century: You 

hear “antitrust” in news stories about 

competitors merging or companies 

conspiring to reduce competition. The 

FTC enforces antitrust laws by challenging 

business practices that could hurt 

consumers by resulting in higher prices, 

lower quality, or fewer goods or services. 

To stop potentially anticompetitive mergers and 

practices through law enforcement, the FTC seeks legal remedies under the antitrust laws, 

through federal court action, administrative proceedings, or negotiated settlements. For 

mergers, the preferred—that is, the most effective and cost-efficient—strategy has been 

to prevent anticompetitive mergers before they occur. The agency has implemented this 

strategy primarily through its authority to seek a federal court injunction preventing the 

transaction. In many cases, the merging parties elect not to defend a court challenge 

and instead agree to resolve competitive concerns through a consent agreement. This 

approach is suitable when the competitive problem relates to only a portion of the 

transaction, such that a divestiture of assets will be sufficient to preserve or restore 

competition while allowing other competitively neutral or beneficial aspects of the merger 

to go forward. In other instances, the parties may abandon a transaction after assessing the 

likely outcome of an FTC court challenge. When a merger already has been consummated, 

the FTC generally relies on administrative litigation to restore competition lost as a result of 

the merger. 

In nonmerger matters, the FTC seeks to stop ongoing activity that harms competition. 

The Commission may initiate administrative proceedings before an Administrative Law 

Judge to adjudicate the issues and establish a basis for an order that the parties to the 

66 Performance and Accountability Report—Fiscal Year 2008 
 

proceeding “cease and desist” from the conduct. The 

FTC also has the authority to seek relief in federal courts, 

although it historically has used this option sparingly 

in nonmerger matters. Again, the agency is often able 

to negotiate a consent agreement with the parties that 

remedies the problem without need for litigation. 

In both merger and nonmerger matters, thorough 

investigation, as well as sophisticated legal and economic 

analysis, are of critical importance to ensuring accurate 

assessment of the potential for competitive harm resulting 

from the transaction or conduct in question and, if 

necessary, demonstrating the likelihood of harm before 

an adjudicative body. When the FTC concludes that the 

likelihood of such harm indicates a law violation, and 

no settlement is possible, the Commission authorizes 

its staff to litigate the matter. The frequency with which 

the agency obtains positive outcomes is an important 

indicator of its success in producing tangible benefits 

for consumers. This is not to say that the FTC, or any law 

enforcement agency, should win every case. Some cases 

involve very close issues, on which reasonable minds 

can and do differ. Other cases may be very difficult from 

a litigation standpoint, but are still worth pursuing. All 

of the FTC’s antitrust challenges are defended by highly 

competent and well-financed counsel. In addition, the 

FTC’s responsibilities include taking action to help shape 

the development of the antitrust laws. To fulfill this duty, 

the agency inevitably must bring cases that pose litigation 

risks—especially where there is no clear precedent and 

the FTC is seeking to establish a new legal principle. The 

FTC also helps consumers by bringing cases to clarify, or 

improve upon, existing precedent. 

The Commission issues complaints when, based 

on the findings of staff investigations, it has “reason to 

believe” the merger or conduct is anticompetitive. The 

agency’s complaints are also founded on sound policy 

considerations. However, the ultimate outcomes depend 

on legal determinations often made by courts following 

appeal of Commission decisions, as well as development 

of a full factual record. The FTC’s mission includes bringing 

cases that highlight difficult issues and seeking to persuade 

Health Care Cases 

In FY 2008, the FTC continued to devote 

considerable resources to challenging 

anticompetitive mergers and conduct in 

the health care industry. 

The FTC settled charges stemming from 

three proposed merger transactions 

that would have limited competition 

in the market for minimally invasive 

vertebral compression fracture 

treatment products, the market for the 

anticonvulsant drug carbamazapine, and 

the market for an iron drug (Venofer) 

used in U.S. dialysis clinics. In addition 

to obtaining these three consent orders, 

the FTC successfully challenged the 

proposed acquisition by INOVA of the 

Prince William Health System, when 

the parties announced that they would 

abandon the transaction after the FTC 

filed for a preliminary injunction in 

the U.S. District Court for the Eastern 

District of Virginia. On the nonmerger 

side, the FTC issued a consent order 

settling charges with two chiropractic 

associations that had implemented a 

collective refusal to deal with a costsavings health plan in Connecticut. The 

FTC also obtained a significant result 

in the Cephalon matter, by filing for a 

permanent injunction in federal court 

challenging the conduct that prevented 

competitors from entering the market 

with the generic version of a branded 

sleep disorder medication.

 Performance Section 67 
 

the courts of the merit of its views on what the law should be. Bringing cases that test the 

boundaries of the law is an important part of the FTC’s responsibilities, even though the 

results are far from certain. The target for the key Performance Measure 2.2.1 reflects the 

reality that, even when the agency brings a meritorious case and litigates it well, success is 

not ensured. In addition, setting the standard too high could be detrimental if the effect 

were to deter the agency from bringing important, but risky, cases. 

Performance Results 

The key performance measure (Performance Measure 2.2.1) under this objective tracks 

obtaining a positive result in matters in which the FTC had reason to believe that a merger 

or a course of conduct was anticompetitive. Additionally, for both merger and nonmerger 

enforcement, the agency measures the volume of commerce and estimates consumer 

savings in markets in which it takes successful enforcement action as an indicator of the 

scope of the FTC’s antitrust enforcement activities. As noted in the FTC’s 2006–2011 

Strategic Plan, external factors, such as level of merger activity, may cause the results to 

fluctuate significantly from year to year. Consequently, the two volume-of-commerce 

targets (Performance Measures 2.2.2 and 2.2.3) and the two consumer savings targets 

(Performance Measures 2.2.5 and 2.2.6) are each expressed in terms of an aggregate target 

for the five-year strategic plan period, using annual targets as gauges of progress toward 

the five-year target. This is also a result of the fact that duration of nonmerger investigations 

is often measured in years. 

In addition to measuring consumer savings in absolute terms, the Strategic Plan also 

establishes efficiency measures that state the FTC will try to save consumers more than the 

amount of agency resources allocated to the merger and nonmerger programs 

(Performance Measures 2.2.6 and 2.2.7). 

68 Performance and Accountability Report—Fiscal Year 2008 
Key Measure: Performance Measure 2.2.1 

Positive result of cases brought by the FTC due to alleged violations. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

60–80% 100% 80% 95% 60–80% 100% 80% 100% 80% 96% 

Data Source: Information on the result of cases brought by the FTC due to alleged violations is obtained from FTC press releases, agency 

databases, as well as internal communications from staff attorneys. Press releases are the source of information for public actions, such as 

consent orders and preliminary and permanent injunctions and the results of judicial review, while internal communications are used to 

identify those investigations that were closed because parties abandoned or restructured a transaction. 

Target Exceeded. The agency exceeded its target, achieving relief through litigation, reaching a successful 

settlement agreement, or persuading parties not to proceed with an anticompetitive acquisition in 26 out 

of 27, or 96 percent, of enforcement matters brought to conclusion during the fiscal year. The FY 2008 actual 

results do not include cases that were not final as of September 30, 2008, or are on appeal. At the end of FY 

2008, litigation was pending for one significant matter. The outcome of this significant matter will be reflected 

in the actual results reported in appropriate future fiscal years. Positive results include: 

•	 The parties’ abandonment of an anticompetitive transaction after antitrust concerns are identified 

•	 An administrative consent agreement to resolve antitrust concerns 

•	 A successful challenge in court 

In the course of FY 2008, the FTC obtained one negative result when, after the U.S. district court in New 

Mexico denied the agency’s motion for a preliminary injunction in the Giant Industries/Western Refining 

matter, the FTC dismissed its administrative complaint, concluding that further prosecution would not be 

in the public interest.

 Performance Section 69
 

Performance Measure 2.2.2 

Achieve savings for consumers through merger enforcement. The five-year target for consumer 

savings in markets in which the agency took successful action to stop anticompetitive mergers is $2.5

billion, or $500 million per year. (Dollars shown in millions) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A $500 $805 $500 $360 

Data Source: Estimates of consumer savings associated with merger enforcement actions are prepared by the lead attorney responsible for 

an individual investigation, and subsequently subject to scrutiny and review by staff economists. In the absence of case specific information 

(such as price and sales data), the estimate is generated using the volume of commerce in the affected markets as a basis for the calculation. 

Target Not Met. In FY 2008, the FTC did not surpass the annual objective, saving consumers an estimated 

$360 million. However, considering the results obtained in the first two years of the five-years covered by this 

measure, it appears that the agency is on track to meet the overall, long term, target. Indeed, the agency has 

reached approximately 46 percent of its target in 40 percent of the time allotted by the measure. 

Performance Measure 2.2.3 

Take action against mergers likely to harm competition in markets with a total of at least $125 billion 

in sales over a five-year period; $25 billion in sales each year. (Dollars shown in billions) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

$40 $8.5 $40 $61.8 $40 $13.4 $25 $42.6 $25 $14.9 

Data Source: Estimates of the volume of commerce associated with merger enforcement actions are prepared by the lead attorney responsible 

for an individual investigation, and subsequently subject to scrutiny and review by staff economists. The estimate is generated using the 

volume of commerce for the affected markets using public sources as well as confidential data submitted by the parties during the course of 

the investigations. 

Target Not Met. The FTC’s merger enforcement actions have affected markets in which the total estimated 

volume of commerce was approximately $15 billion. However, after the first two of the five years covered 

by this performance measure, the agency has taken action against anticompetitive mergers in markets 

with a total of around $57.5 billion, and is thus currently exceeding its five-year target by approximately 15 

percent. During FY 2008, the FTC has taken action against 20 anticompetitive mergers, resulting in 13 consent 

agreements and six abandoned or restructured transactions. In the case of consent agreements, the actions 

taken by the FTC consist primarily of structural remedies, accompanied in some cases by conditions restricting 

the future conduct of the merged entity. In 10 out of the 13 consent agreements stipulated in FY 2008, the 

parties agreed to divest certain crucial assets to resolve the competitive concerns raised by the Commission. 

70 Performance and Accountability Report—Fiscal Year 2008 
Performance Measure 2.2.4 

Achieve savings for consumers through nonmerger enforcement. The five-year target for consumer 

savings in markets in which the agency took successful action to stop anticompetitive conduct is 

$400 million, or $80 million per year. (Dollars shown in millions) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A $80 $75 $80 $28 

Data Source: Estimates of consumer savings associated with nonmerger enforcement actions are prepared by the lead attorney 

responsible for an individual investigation, and subsequently subject to scrutiny and review by staff economists. In the absence of 

case specific information (such as price and sales data), the estimate is generated using the volume of commerce in the affected 

markets as a basis for the calculation. 

Target Not Met. During FY 2008, the FTC did not reach the annual target of $80 billion, obtaining just $28 

million in estimated consumer savings. Thus, during the first two years covered by this five-year target, the 

agency has obtained just over $100 million out of the overall goal of $400 million, or around 40 percent of the 

total. Given the high variability in the year-to-year results for this measure, at this stage in the implementation 

of the Strategic Plan, there is still a good probability that the five-year target can be reached.

 Performance Section 71
 

Performance Measure 2.2.5 

Take action against anticompetitive conduct in markets with a total of at least $40 billion in annual 

sales over a five-year period; $8 billion each year. (Dollars shown in billions) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

Establish 

Baseline $2.6 $20 $19.4 $20 $1.4 $8 $2.6 $8 $0.4 

Data Source: Estimates of the volume of commerce associated with nonmerger enforcement actions are prepared by the lead attorney 

responsible for an individual investigation, and subsequently subject to scrutiny and review by staff economists. The estimate is generated 

using the volume of commerce for the affected markets using public sources as well as confidential data submitted by the parties during the 

course of the investigations. 

Target Not Met. In FY 2008, the FTC’s nonmerger enforcement actions affected markets in which the total 

volume of commerce was $0.4 billion, five percent of the annual target of $8 billion. Coupled with the result 

obtained in FY 2007, this year’s result would seem to suggest that the agency is not on track to reach the 

five-year goal. However, given the degree to which this measure has fluctuated historically, it is not possible 

to predict with accuracy if the overall long term goal will be met. Indeed, if in the next three years the FTC 

takes action against one or more restrictive business practices involving significantly sized relevant product 

markets, the target may still be reached. Despite this possibility, if performance actuals were to remain at this 

level for the next three years, the agency would not reach the five-year target. During FY 2008, the FTC has 

taken action in three nonmerger matters, resulting in an equal number of consent agreements that impose 

remedies that resolve the concerns raised by the agency. At a general level, the principal effect of the actions 

taken by the FTC is to prevent the parties involved from persevering in their anticompetitive conduct, and to 

thus generate savings for the affected consumers. 

72 Performance and Accountability Report—Fiscal Year 2008 
Performance Measure 2.2.6 

Save consumers at least six times the amount of agency resources allocated to the merger program 

over a five-year period. (Efficiency Measure) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 600% 2,500% 600% 1,121% 

Data Source: The ratio of consumer savings in merger enforcement actions to the amount of resources allocated to the merger program is 

calculated using data on consumer savings obtained under Performance Measure 2.2.2, divided into the amount of monetary resources 

expended on the merger program as reported by the FTC’s Financial Management Office. 

Target Exceeded. During FY 2008, the agency saved consumers approximately 13 times the amount of 

resources devoted to the merger program. As in the case of the previously mentioned Performance Measures 

2.2.2 and 2.2.3, the agency has thus far exceeded its annual targets and will likely exceed the five-year target as 

well, which is set at 600 percent. 

Performance Measure 2.2.7 

Save consumers at least four times the amount of agency resources allocated to the nonmerger 

enforcement program over a five-year period. (Efficiency Measure) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 400% 424% 400% 164% 

Data Source: The ratio of consumer savings in nonmerger enforcement actions to the amount of resources allocated to the merger program 

is calculated using data on consumer savings obtained under Performance Measure 2.2.4, divided into the amount of monetary resources 

expended on the nonmerger program as reported by the FTC’s Financial Management Office. 

Target Not Met. During FY 2008, the FTC took enforcement action in three nonmerger matters, saving 

consumers approximately one and one-half the amount of monetary resources expended on the nonmerger 

program. Data from the first two years of the five-year target suggest that the agency may be on track to mee

or exceed the overall target. Despite this possibility, if performance actuals were to remain at this level for the 

next three years, the agency would not reach the five-year target. This trend needs to be carefully monitored, 

however, given the unpredictability of future nonmerger enforcement activity, specifically with regard to the 

size and scope of the relevant geographic and product markets involved in each individual investigation, and 

thus to the amount of estimated consumer savings.

t 

 Performance Section 73
 

Objective 2.3 Prevent consumer injury through education. 

In addition to its law enforcement activity, the FTC provides substantial information 

to the business community and consumers about the role of the antitrust laws and 

businesses’ obligations under those laws. 

Our Strategy 

The FTC uses education and outreach to help prevent consumer injury, increase 

business compliance, and augment its law enforcement efforts. The agency pursues this 

strategy through guidance to the business community; outreach efforts to federal, state, 

and local agencies, business groups, and consumers; development and publication of 

antitrust guidelines, policy statements, and reports; and speeches and testimony. By using 

these mechanisms to signal its enforcement policies and priorities, the FTC seeks to deter 

would-be violators of the antitrust laws. FTC law enforcement efforts also are made more 

effective by making the public aware of what types of conduct are likely to be challenged 

as law violations. The FTC seeks to make its law enforcement presence visible and its 

enforcement policies transparent in order to serve its objectives through deterrence. Each 

successful enforcement action not only promotes competition in one or more relevant 

markets, but also serves to communicate to the business and legal communities that the 

FTC can and will move successfully to challenge similar transactions or conduct in the 

future. The agency explains the relevant facts and issues of cases in which it obtains a 

consent agreement in press releases and in published “Analyses to Aid Public Comment” 

so the nature of the problem is clear. Through press releases about FTC actions and 

publication of related materials on the agency website, www.ftc.gov, the public facts 

underlying FTC actions provide bases for companies to evaluate the likelihood that other 

transactions would face challenge. 

In FY 2008, the FTC filed one new administrative complaint and continued to pursue 

four other administrative cases that have reached various stages of adjudication and 

appeal. Each of these cases may provide (or has provided) an opportunity for the FTC 

to set out in detail its analysis of important legal issues and to have that analysis tested 

in the federal courts. Understanding fully the types of transactions or conduct the FTC 

is likely to challenge, and the reasons for the agency’s actions, greatly facilitates antitrust 

lawyers’ counseling of their clients and prevents many anticompetitive mergers from being 

proposed or anticompetitive practices from being implemented. 

In addition, the FTC educates the public through guidelines, congressional or other 

types of testimony, conferences, hearings, and workshops (such as the series of conferences 

on health care related issues or the workshop on unilateral effects analysis); advisory 

opinions (addressing issues such as the applicability of the Non-Profit Institutions Act to 

certain commercial activities by health maintenance organizations); and reports (such as the 

reports on activities in the oil and natural gas industries). 

74 Performance and Accountability Report—Fiscal Year 2008 
As a complement to FTC enforcement activity, the 

agency also advises, when asked, other federal and 

state government officials about the possible effect that 

various regulatory proposals may have on competition. By 

providing economic analysis and other informed guidance, 

the FTC can help policymakers better understand the 

impact of their decisions in creating, maintaining, or 

forestalling competitive markets. The FTC has a long 

and distinguished history in this area. The FTC advocates 

market-based solutions through the publication of studies 

and reports, as well as participation in state and federal 

legislative and regulatory fora. The agency also participates 

as an amicus curiae (friend of the court) in judicial 

proceedings when substantial questions of antitrust law 

or competition policy are involved, especially when the 

FTC may add a different perspective to the deliberations 

because of its specialized knowledge or experience. 

Finally, in an effort to continue educating consumers 

and businesses on the important role of competition in 

providing the most valuable and efficient mix of price, 

choice, and innovation, in FY 2008, the FTC implemented 

substantial changes to the agency’s maintaining 

competition web pages and continued to publish and 

disseminate reference and case-related documents. The 

objective has been to improve how topical information 

and reference documents are organized – in an effort to 

aid visitors in searching and finding relevant information – 

and to continuously update the growing body of reference 

material. 

Of note, in FY 2008, the agency published a series of 

interpretative guides on the application of the U.S. antitrust 

Bureau of Competition Consumer 

Resources 

The Bureau of Competition has 

developed a variety of resources to 

help explain its work. Competition 

Counts explains how consumers win 

when businesses compete and provides 

an overview of the types of matters 

investigated by the bureau. Download 

the brochure from www.ftc.gov/bc/edu/ 

pubs/consumer/general/zgen01.pdf. 

An FTC Guide to the Antitrust Laws is 

a plain-language guide for consumers 

and businesspeople with questions 

about the antitrust laws. The Guide 

summarizes the core laws that ban unfair 

business practices and prevent mergers 

that harm consumers, and it explains 

how antitrust cases are brought by U.S., 

state, and international authorities, as 

well as private parties. Download the 

material from http://ftc.gov/bc/antitrust/ 

factsheets/antitrustlawsguide.pdf.

laws to promote transparency and encourage compliance with the law. These guides 

contain a more in-depth discussion of competition issues for those with specific questions 

about individual facets of the antitrust laws. These Individual Fact Sheets cover a variety of 

competition topics, and contain examples of cases’ frequently asked questions. The FTC 

also published an updated version of the Bureau of Competition User’s Guide to provide 

the general public and practitioners with a roadmap of how the Bureau of Competition 

is organized and which employees deal with individual sectors or specific issues. The 

FTC continues to develop educational materials to help explain its work, and in the fall of 

2008, it launched a website for middle-school students with games and videos explaining 

how consumers of all ages benefit from competition. The website features a movie about 

 Performance Section 75 
 

the history of the antitrust laws and an interactive pricing game that allows students to 

explore the concepts of supply and demand. Finally, an effort has also been made to clarify 

the role played by the DOJ in enforcing the federal antitrust laws and how enforcement 

responsibilities are shared between the two sister agencies. 

Performance Results 

The FTC uses two performance measures to assess its performance in preventing 

consumer injury through education. The key measure (Performance Measure 2.3.2) tracks 

the number of external print media, such as newspapers, magazines, business and trade 

journals, and professional journals that publish articles that refer to FTC competition 

activities, and the circulation of the media that publish those articles. The second measure 

(Performance Measure 2.3.1) tracks the volume of traffic on the FTC website on antitrustrelated pages that are relevant to policymakers, the business and legal communities, 

and the public at large. These performance measures are good indicators of the flow of 

information provided to the public and are designed to keep abreast of the developments 

in the technology of information dissemination. 

Successful outreach and education efforts, as reflected by the above measures, will 

help consumers, because increased knowledge and understanding of the antitrust laws will 

help businesses stay in compliance. These measures also will help ensure that the agency 

engages in consumer, business, and international education that advances the culture of 

competition, which enhances consumer welfare. 

The results of these two measures indicate a significant continued public interest in 

the FTC and its Maintain Competition strategic goal. In addition, the broad and increasing 

distribution of educational and policy materials through electronic channels represents 

important leveraging of the agency’s resources. 

76 Performance and Accountability Report—Fiscal Year 2008 
Performance Measure 2.3.1 

Quantify the number of hits on antitrust information on the FTC’s website. (Numbers shown in 

millions.) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

Establish 

Baseline 11.0 10 9.8 10 10.6 15 15.7 15 12.5 

Data Source: The number of hits on antitrust related pages on the FTC’s internet website is calculated using data generated by the 

agency’s web tracker software. The raw data are run through a computer program that uses a logical algorithm to classify the 

majority of the pages as pertaining to competition or not. The remaining pages, which cannot be processed in this automated 

fashion, are then classified manually. 

Target Not Met. Although the current Strategic Plan does not set a target for this measure, in FY 2007, the 

FTC identified a provisional target of at least 15 million hits by extrapolating from information acquired in 

the previous three fiscal years. However, since rapid changes in technology and in the patterns of Internet 

utilization by the general population may render this target obsolete, the FTC will continue to closely monitor 

this measure. Furthermore, since the FTC is in the process of replacing the current legacy web tracker software 

with a new system that will allow for more accurate monitoring of web traffic, it may well be that either 

the measure itself or the target, at the very least, will be revisited. Indeed, the availability of comprehensive 

metadata generated by the new system could permit the agency to create new performance measures as well 

as allow for a more accurate and detailed accounting of each individual visit to the FTC’s website. 

Key Measure: Performance Measure 2.3.2 

Track (a) the number of times print media publish articles that refer to FTC competition activities and 

(b) the circulation of the media that publish those articles. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

(a) 2,982 (a)2,500 (a) 1,858 

N/A N/A N/A N/A N/A N/A Establish 

Baseline 

articles 

(b) 635 

articles 

(b) Establish 

articles 

(b) 397 

million Baseline million 

Data Source: The data used to generate the results for this measure are extracted from the Lexis/Nexis “U.S. Newspapers and Magazines” 

database and are cross-referenced with circulation data obtained from public sources or directly from the publishers. 

Target Not Met. This performance measure tracks the number of external print media, such as newspapers, 

magazines, business and trade journals, and professional journals that publish articles that refer to FTC 

competition activities, and the circulation of the media that publish those articles. The print media that 

published articles covering the competition-related activities of the FTC encompasses publications with 

varying degrees of territorial distribution (from local to national) and with circulations ranging from less than 

fifty thousand to more than one million copies.

 Performance Section 77 
 

 

 

Healthcare Workshop 

The Federal Trade Commission (FTC) 

held a workshop in May 2008 to discuss 

collaborations among health care 

providers to improve the provision of 

health care services and reduce costs. 

The workshop, titled “Clinical Integration 

in Health Care: A Check-Up,” featured 

health care providers, government 

officials, health insurers and other payers, 

employers, attorneys, and others who 

provided insight on various aspects of 

“clinical integration” among health care 

providers. “Clinical integration” describes 

certain types of collaboration among 

otherwise independent health care 

providers to improve quality and contain 

costs. The 1996 joint FTC/Department 

of Justice Statements of Antitrust 

Enforcement Policy in Health Care 

expressly recognize the potential benefits 

of this type of integration, and that 

more-extensive antitrust analysis of the 

competitive effects of such arrangements 

may be warranted when collective 

negotiation and contracting with payers 

is reasonably necessary to achieve clinical 

efficiencies. The workshop was part 

of the FTC’s ongoing efforts to study 

developments in health care delivery and 

financing that can inform its antitrust 

analysis, to ensure that consumers 

are protected from anticompetitive 

conduct, and to ensure that legitimate 

efficiency-enhancing joint ventures are 

not discouraged. Materials relating to the 

application of antitrust principles to health 

care markets can be found at www.ftc. 

gov/bc/healthcare. 

Objective 2.4 Enhance consumer welfare through 

research, reports, advocacy, and 

international cooperation and exchange. 

As a complement to its activities aimed at preventing 

consumer injury through education, the FTC provides 

substantial information to the business community 

and consumers about the role of the antitrust laws and 

businesses’ obligations under those laws. 

Our Strategy 

The FTC has unique jurisdiction to gather, analyze, and 

make public certain information concerning the nature of 

competition as it affects U.S. commerce. The FTC uses that 

authority to hold public hearings, convene conferences 

and workshops, conduct economic studies on competition 

issues of significant public importance, and issue reports 

of its findings. This authority advances the competition 

mission in numerous ways and is a fundamental 

component in the FTC’s strategy to enhance consumer 

welfare. The agency uses the information it develops 

internally to refine the theoretical framework for analyzing 

competition issues and the empirical understanding of 

industry practices, which contributes substantially to an 

effective response to changing marketplace conditions. 

The information gained through this authority, combined 

with the agency’s professional expertise on competition 

issues, also contributes to a better understanding of 

business practices and their competitive and economic 

implications by various entities, including the business 

sector, the legal community, other enforcement 

authorities, the judiciary, foreign competition agencies, and 

governmental decision makers and policymakers at the 

federal, state, and local levels. 

The FTC pursues its objective of enhancing consumer 

welfare by actively developing its international cooperation 

and exchange program. Staff members regularly 

participate in dialogue with competition authorities 

of other countries and international organizations on 

transnational competition issues that affect American 

78 Performance and Accountability Report—Fiscal Year 2008 
consumers and businesses and that promote sound consumer welfare-based competition 

policy. Part of this program includes participating in technical assistance missions to 

countries with new competition regimes. 

Performance Results 

The key measures used to gauge the FTC’s success under this objective are the ones 

relating to the publication of reports and studies on competition issues (Performance 

Measure 2.4.2), making advocacy filings (Performance Measure 2.4.3), and international 

cooperation and exchange (Performance Measure 2.4.7). 

These measures, in conjunction with Performance Measures 2.4.1, 2.4.4, 2.4.5, and 2.4.6, 

help to ensure that the agency is engaging in appropriate types and sufficient levels of 

research, reports, advocacy, and international cooperation and exchange and that they are 

relevant to consumers, policymakers, businesses, and the legal community. The Strategic 

Plan establishes the target for these measures by setting a minimum level of activity that 

the agency is expected to achieve. Thus, for example, in the case of Performance Measure 

2.4.1, the Plan states that the FTC shall “[c]onvene, or participate substantively in, at least 20 

workshops, conferences, seminars, and hearings involving significant competition-related 

issues over a five-year period.” As expressed in these terms, the Strategic Plan recognizes 

that these output measures relate to processes or events whose upper limits are not 

intrinsically defined, unlike the case for other relative outcome measures for which the Plan 

states, for example, that the FTC shall achieve between 80 and 100 percent of a certain goal. 

Performance Measure 2.4.1 

Convene or participate substantially in workshops, conferences, seminars, and hearings involving 

significant competition-related issues. The target is for the FTC to convene or participate substantially 

in at least 20 conferences, workshops, or hearings that are related to significant competition issues 

over a five-year period, or at least four per year. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 4 7 4 5 

Data Source: Information on conferences involving significant competition related issues is taken from the FTC website (www.ftc.gov/ftc/ 

workshops.shtm). 

Target Exceeded. During FY 2008, the FTC held five conferences on competition-related topics, ranging 

from health care, international technical assistance, and unilateral effects. Combined with the results of FY 

2007, these achievements place the FTC on par to meet or exceed the five-year target set by the Strategic Plan. 

 Performance Section 79
 

Key Measure: Performance Measure 2.4.2 

Issue studies, reports, and working or issues papers on significant competition-related issues. The 

target is for the FTC to issue at least 40 studies, reports, and working papers or issues papers on 

significant competition-related issues over a five-year period, or at least eight such reports per year. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 8 18 8 7 

Data Source: Information on studies and reports on significant competition-related issues is taken from the FTC website (www.ftc.gov/be/ 

research.shtm and www.ftc.gov/reports/index.shtm). 

Target Not Met. In FY 2008, the FTC issued a total of seven staff reports on competition-related matters, thus 

not meeting the annual target set by the Strategic Plan. However, taken together, the 2007 and 2008 results 

show that the agency has already published a grand total of 25 reports, which represents 60 percent of its fiveyear target in just the first two years, or 40 percent of the time allotted. 

Key Measure: Performance Measure 2.4.3 

Make advocacy filings with other federal and state government agencies urging them to assess the 

competitive ramifications and costs and benefits to consumers of their policies. The target is for the 

FTC to make at least 30 advocacy filings with other state and federal government agencies urging 

them to assess the competitive impact of their policies over a five-year period, or six per year. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 6 11 6 12 

Data Source: Information on competition-related advocacy filings is drawn from the FTC website (www.ftc.gov/opp/advocacy_date.shtm). 

Target Exceeded. In FY 2008, the FTC made 12 advocacy filings, thus exceeding the annual target of six filings. 

As in the case of Performance Measure 2.4.2, given the results obtained in the first two years of the period 

covered by the Strategic Plan, the agency appears to be on pace to meet or exceed the five-year target. 

80 Performance and Accountability Report—Fiscal Year 2008 
Performance Measure 2.4.4 

Issue advisory opinions to persons seeking agency review of proposed business actions. The target is 

for the FTC to issue 12 advisory opinions over the five-year period covered by the Strategic Plan, or at 

least two or three per year. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 2 to 3 2 2 to 3 1 

Data Source: Information on competition-related advisory opinions is drawn from the FTC website (www.ftc.gov/ftc/opinions.shtm). 

Target Not Met. The FTC responded to one request for an advisory opinion from a health maintenance 

organization, and thus did not meet its annual target. The FTC’s performance under this goal is necessarily 

constrained by the fact that the decision to issue advisory opinions is not entirely under the control of the 

agency, as requests for advisory opinions are generated by private parties. Thus, assessing the agency’s 

long-term performance based on just two years’ worth of data may not be possible. Indeed, changes in the 

regulatory framework of specific industries or even developments in the business models adopted by private 

parties — events over which the FTC has relatively little control — could drive future requests for advisory 

opinions. 

Performance Measure 2.4.5 

File amicus briefs with courts addressing competition-related issues. The target is for the FTC to file 

at least 12 amicus briefs with courts addressing competition-related issues in the five-year period 

covered by the Strategic Plan, or at least two to three per year. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 2 to 3 4 2 to 3 1 

Data Source: Information on amicus briefs addressing competition-related issues is drawn from the FTC website (www.ftc.gov/ogc/briefs. 

shtm). 

Target Not Met. In FY 2008, the FTC did not meet the annual target set by the Strategic Plan, it filed only one 

amicus brief. However, the cumulative results obtained over the first two years covered by the five-year plan 

suggest that the agency should be on track to meet the overall goal of 12 amicus briefs, having issued just over 

40 percent of the total target in 40 percent of the time covered by the Strategic Plan. 

 Performance Section 81
 

Performance Measure 2.4.6 

Track the volume of traffic on www.ftc.gov relating to competition research, reports, advocacy, and 

international cooperation and exchange. (Numbers shown in millions.) 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A 1.1 1.1 1.1 1.2 

Data Source: The number of hits on the FTC website relating to competition research, reports, and advocacy is calculated using data generated 

by the agency’s web tracker software. 

Target Exceeded. This performance measure relates to the volume of traffic on FTC web pages that relate to 

competition research, reports, advocacy, and international cooperation. Although the Strategic Plan does not 

set a specific target for this measure, the FTC set a provisional target for each of the remaining years. In FY 

2008, there were approximately 1.2 million visits that met the criteria set by this measure. If the FTC continues 

to develop its activities in the area of research, advocacy, and international cooperation, it is plausible to 

assume that the target for the next four years should be set at a level that surpasses the current fiscal year 

results. As in the case of Performance Measure 2.3.2, since the FTC is in the process of replacing the current 

legacy web tracker software with a new system that will allow for more accurate monitoring of web traffic, it 

may well be that either the measure itself or the target, at the very least, will be revisited. Indeed, the possibility 

of cataloging web pages more accurately and the availability of comprehensive metadata generated by 

the new system could permit the agency to create new performance measures as well as allow for a more 

accurate and detailed accounting of each individual visit to the FTC’s website. 

82 Performance and Accountability Report—Fiscal Year 2008 
Key Measure: Performance Measure 2.4.7 

Track the number of (a) cases on which the FTC cooperated with foreign competition authority, 

(b) consultations with or comments to foreign competition authorities, (c) written submissions to 

international fora, (d) international events attended, and (e) leadership positions held by FTC staff in 

international competition organizations. 

2004 2005 2006 2007 2008 

Target Actual Target Actual Target Actual Target Actual Target Actual 

N/A N/A N/A N/A N/A N/A Establish 

Baseline 

(a) 61 

(b) 70 

(c) 19 

(d) 48 

(e) 8 

(a) 30 

(b) 25 

(c) 7 

(d) 8 

(e) 5 

(a) 79 

(b) 89 

(c) 30 

(d) 68 

(e) 9 

Data Source: Information on the international activities of the FTC is produced by the agency’s Office of International Affairs. 

Targets Exceeded. The third key performance measure under this objective relates to international cooperation 

and convergence in the field of competition enforcement and policy development. Based on the experience 

accumulated over recent years in the area of international cooperation, the agency set preliminary targets 

for this measure; however, recent trends in the level of activity suggest that these may have to be revisited 

upward to more realistically reflect the expenditure of resources in this arena. Indeed, during FY 2008, the FTC 

substantially exceeded the provisional targets. Agency staff cooperated with foreign competition authorities 

in 79 instances, provided 89 consultations or comments to foreign competition authorities, presented 30 

submissions to international fora, attended 68 international events, and held nine leadership positions in 

international organizations. 

Resources Utilized—Strategic Goal 2 

(Dollars shown in millions) 

2004 2005 2006 2007 2008 

Full-Time Equivalents 498 470 457 489 502 

Obligations $83 $86 $86 $94 $103 

Net Cost ($3) ($16) ($23) ($47) $2 

Note: Differences between these obligations and net costs and the financial statements are due to rounding.

 Performance Section 83
 

Summary of Program Evaluations
 

The FTC at 100: Into Our Second Century 

In anticipation of its 100-year anniversary in 2014, the FTC is engaging in a multipart, 

critical self-analysis known as The FTC at 100: Into Our Second Century. The aim of the project 

is to determine whether the agency is fulfilling the destiny that Congress envisioned for it in 

1914 and what type of institution it should be as it begins its second century. 

The progress of the FTC in its modern era has built heavily upon the willingness of its 

people to assess their work critically and explore possibilities for improvement. The FTC 

at 100 self-assessment continues and extends this tradition. Its goals are to encourage 

acceptance of a norm of periodic self-assessment, to create a template for the agency 

to engage regularly in an analysis of its performance, and to identify approaches for 

improvement over both the short and long term. 

The FTC is seeking to bring rigor, visibility, and accountability to this project by not 

limiting its assessment to internal deliberations, but also encouraging and facilitating 

inclusive stakeholder participation and feedback. Since July 2008, the agency has held 

a series of public roundtables nationally and internationally. Participants have included 

current and former FTC Commissioners and senior staff, officials from federal and state 

governments, consumer and industry representatives, members of the antitrust and 

consumer protection bars, university professors and other representatives from academia, 

policy experts from non-profit institutions, and high-ranking members of competition and 

consumer protection agencies around the globe. 

The FTC will use the recommendations and findings of these public roundtables, in 

conjunction with the results of its internal deliberations, to improve agency policies and 

procedures, set benchmarks to evaluate its performance, and adapt to the ever-expanding 

global marketplace and ever-changing technology. The FTC’s ultimate goal is to remain in 

the front ranks of the competition and consumer protection agencies in the world. 

For more information on the project, the FTC has created a website at www.ftc.gov/ftc/ 

workshops/ftc100/index.shtm. Links are provided to related speeches and the transcripts of 

the public roundtables the FTC has hosted across the United States and abroad. 

The American Antitrust Institute 

During FY 2008, the American Antitrust Institute (AAI) conducted a review of antitrust 

institutions, including the FTC. The full report is available at www.antitrustinstitute.org/ 

Archives/transitionreport.ashx. 

Overview 

The American Antitrust Institute (AAI) released “The Next Antitrust Agenda: The 

American Antitrust Institute’s Transition Report on Competition Policy to the 44th 

President of the United States.” The report is the result of a year-long effort undertaken by 

11 committees of the AAI Advisory Board. It outlines both the philosophy and the policy 

84 Performance and Accountability Report—Fiscal Year 2008 
 

 

 

 

agenda of the AAI, and offers specific suggestions 

for legislation and enforcement priorities to the next 

administration. 

AAI contends that the effectiveness of the antitrust 

laws depends on the institutions that create the context 

and the means for their enforcement. They identify the 

three public agencies of antitrust law enforcement in 

this country as the FTC, DOJ, and, collectively, the state 

attorneys general. The AAI looks at where antitrust should 

go over the longer term and advocates strengthening 

these institutions by improving public education and 

transparency. 

Recommendations 

The AAI made several recommendations for the 

antitrust agencies, including specific recommendations 

for the FTC. In summary: (1) the administration should 

select administrative law judges with prior experience 

in economics and antitrust law, (2) the FTC’s research 

agenda should include general studies on the competitive 

landscape in particular industries, (3) the FTC should 

continue to sponsor public workshops on issues of 

particular importance to competition policy, (4) the FTC 

should take the lead in developing structured rules of 

reason for particular recurring situations, (5) the FTC should 

continue and expand on its recent initiatives to develop 

Section 5 as a tool for addressing anticompetitive threats 

Press Release: The FTC Received Privacy 

Innovation Award 

For Release: September 23, 2008 

FTC Earns 2008 Privacy Innovation Award 

The FTC received the 2008 HP/IAPP 

Privacy Innovation Award for excellence 

in protecting personally identifiable 

information. The annual award is 

sponsored by Hewlett-Packard and 

the world’s largest association of 

privacy professionals, the International 

Association of Privacy Professionals. 

“To be recognized by the privacy industry 

for our efforts to protect personal 

information, and to have earned the 

industry’s premier award, is a true 

honor,” FTC Chairman William E. Kovacic 

said, noting the leadership of the FTC’s 

Chief Privacy Officer, Marc Groman, 

in spearheading the agency’s privacy 

program. “Privacy considerations are 

woven into every aspect of our work,” 

Kovacic added. Learn more at www.ftc. 

gov/opa/2008/09/privacyaward.shtm.

and conditions that may not be effectively reachable by the Sherman or Clayton Act, and 

(6) it should be affirmed that the 13(b) standard for FTC preliminary injunctions in merger 

cases is not based on a traditional “balance of hardships” evaluation rather it involves a 

more lenient “public interest” analysis. 

 Performance Section 85 
Photograph of the Federal Trade Commission’s headquarters building in Washington, DC. The foreground shows 

one of a pair of sculptures found outside of the building entitled “Man Controlling Trade,” completed in 1942 by 

New York sculptor Michael Lantz. 
Financial Section
During the past fiscal year, the FTC upheld its 

commitment to protect American consumers and 

maintain competition in a fiscally responsible manner. I 

am pleased to report that the FTC’s financial condition remains 

sound and that we look back on a long list of accomplishments 

from FY 2008. Notably, for the 12th consecutive year, the agency 

obtained an unqualified (clean) opinion on its consolidated 

financial statements. We also realigned our accounting code 

structure to facilitate linking performance goals and objectives Steven A. Fisher to actual cost data. Over time, this work will enhance agency Chief Financial Officer

performance by improving the quality, access, and timeliness of 

management information throughout the FTC.

The above accomplishment highlights the connection between the financial and 

programmatic dimensions of our work. Likewise, this report bridges these two areas by 

presenting overall performance relative to strategic goals and objectives and presenting 

financial results of our operations. The Financial Section that follows explains the FTC’s 

financial position as of September 30, 2008, and lays out how financial resources were 

expended to achieve performance results. Some of the key accomplishments of the past 

year are noted below.

In the area of stewardship and financial reporting—

◆ We collected and returned more than $33 million in redress funds to victims of fraud 

and scams following successful prosecution of defendants that resulted in courtordered judgments or settlements.

◆ Our auditors confirmed they found no material weaknesses, significant control 

deficiencies, or nonconformances with the Federal Managers’ Financial Integrity 

Act and other applicable laws and regulations. This attests to the core values of 

accountability, reliability, and integrity imbued within the FTC. 

◆ The Association of Government Accountants recognized the agency with a 

Certificate of Excellence in Accountability Reporting for our FY 2007 “Performance 

and Accountability Report,” citing it as clearly written and informative. This award is 

a testament to the FTC’s commitment to transparency. 

◆ The FTC avoided paying interest on late payments, as required by the Prompt 

Payment Act, by paying 99 percent of all invoices received from vendors on time. 

◆ We obtained a green rating from the Department of Treasury on the accuracy and 

timeliness of financial reporting practices involving Fund Balance with Treasury 

transactions.

Message from the Chief Financial Officer

8888 Performance and Accountability Report—Fiscal Year 2008
The accompanying notes are an integral part of these statements. 

 

With regard to our financial system— 

◆	 The FTC partnered with the Department of the Interior’s National Business Center to 

successfully transition to a new core financial system. The new system has improved 

the degree of integration, accessibility, and availability of real-time financial 

information for use by agency managers. 

◆	 We partnered with the General Services Administration to roll out major upgrades 

of our travel management system (TMS) to improve usability. We also updated the 

accounting code in the TMS and developed an interface with the new financial 

system. 

◆	 We began work to modernize and integrate our procurement system with the core 

financial system. 

In the procurement arena— 

◆	 As a means of showing support to our nation’s veterans, the FTC exceeded its goal 

to allocate total contract dollars to companies owned by service-disabled veterans. 

For our efforts, the FTC was one of only seven agencies government-wide awarded 

the Champions of Veterans Enterprise Award by the Department of Veterans Affairs. 

◆	 We updated the agency’s computer-based training course to educate Contracting 

Officers’ Technical Representatives on their responsibilities and emphasize compliance 

with the Federal Acquisition Regulation. 

Looking ahead, the FTC will continue to modernize its business systems. A key part of 

our strategy includes integrating procurement functionality with the core financial system. 

Upcoming efforts will build on the FY 2008 completion of a comprehensive set of acquisition 

system requirements. Finally, I remain grateful to the Chairman, the Commissioners, and 

senior agency managers for promoting a culture of accountability throughout the agency. 

Effective financial management remains a key driver of mission success, and at the FTC this 

starts at the top. I am also proud of the outstanding efforts of the financial management 

staff, diligent stewards of public resources. Together, we will continue to protect the interests 

of the American consumer. 

Steven A. Fisher 

Chief Financial Officer 

November 14, 2008

 Financial Section 89 
Independent Auditor’s Report

90 Performance and Accountability Report—Fiscal Year 2008
 Financial Section 91
92 Performance and Accountability Report—Fiscal Year 2008
2008 2007 

Assets (Note 2): 

Intragovernmental: 

Fund balance with Treasury (Note 3) $ 86,792 $ 85,848 

Investments (Note 5) 117,514 — 

Accounts receivable, net (Note 6) 48 23 

Total intragovernmental 204,354 85,871 

Cash and other monetary assets (Note 4) 10,485 123,309 

Accounts receivable, net (Note 6) 87,982 125,185 

General property and equipment, net (Note 7) 15,098 11,655 

Total assets $ 317,919 $ 346,020 

Liabilities: 

Intragovernmental: 

Accounts payable $ 21 $ 1,557 

Other (Note 9) 17,028 2,651 

Total intragovernmental 17,049 4,208 

Accounts payable 15,591 5,879 

Accrued redress receivables due to claimants 87,800 123,974 

Redress collected but not yet disbursed 85,021 80,180 

Divesture fund due 45,485 44,570 

Other (Note 9) 16,897 14,606 

Total liabilities (Note 8 and Note 9) 267,843 273,417 

Net position: 

Unexpended appropriations - other funds — — 

Cumulative results of operations - other funds 50,076 72,603 

Total net position

Total liabilities and net position

 $ 50,076 $ 72,603 

 $ 317,919 $ 346,020 

Principal Financial Statements 

Balance Sheet 

As of September 30, 2008 and 2007 

(Dollars shown in thousands) 

 Financial Section 93 
 

 

 

Principal Financial Statements 

Statement of Net Cost 

For the years ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

2008 2007 

Program costs: 

Maintain Competition (MC) Strategic Goal: 

Gross costs (Note 12) $ 104,853 $ 97,916 

Less: earned revenue (Note 13) (103,192) (145,285) 

Net program costs (revenue) 1,661 (47,369) 

Consumer Protection (CP) Strategic Goal: 

Gross costs (Note 12) 140,705 126,662 

Less: earned revenue (Note 13) (16,202) (21,675) 

Net program costs (revenue) 124,503 104,987 

Net cost of operations $ 126,164 $ 57,618 

94 Performance and Accountability Report—Fiscal Year 2008 
2008 2007 

Cumulative Results of Operations: 

Beginning balance, adjusted $ 72,603 $ 49,121 

Budgetary Financing Sources: 

Appropriations used 96,226 73,688 

Other Financing Sources (non-exchange): 

Imputed financing 7,411 7,412 

Total Financing Sources 103,637 81,100 

Less: Net Cost of Operations 126,164 57,618 

Net Change (22,527) 23,482 

Cumulative Results of Operations 50,076 72,603 

Unexpended Appropriations: 

Beginning balance, adjusted — 14 

Budgetary Financing Sources: 

Appropriations received 96,226 74,608 

Less: Appropriations transferred out — 14 

Less: Other adjustments (recissions) — 920 

Less: Appropriations used 96,226 73,688 

Total Budgetary Financing Sources — (14) 

Total Unexpended Appropriations

Net Position

— — 

 $ 50,076 $ 72,603 

Principal Financial Statements 

Statement of Changes in Net Position 

For the years ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

 Financial Section 95 
2008 2007 

Budgetary Resources: (Note 15) 

Unobligated balance, brought forward, October 1: $ 11,068 $ 10,875 

Recoveries of prior year unpaid obligations 1,322 8,299 

Budget authority 

Appropriation 96,226 74,608 

Spending authority from offsetting collections 

Earned 

Collected 134,728 166,992 

Change in receivables from Federal sources 25 (32) 

Change in unfilled customer orders

without advance from Federal sources (53) 84 

Previously unavailable

Subtotal

28,561 

259,487 

— 

241,652 

Nonexpenditure transfers, net, anticipated and actual — (14) 

Temporarily not available pursuant to public law (15,357) (28,561) 

Permanently not available

Total Budgetary Resources

—

$ 256,520 

(920) 

$ 231,331 

Status of Budgetary Resources: 

Obligations incurred 

Direct 243,186 219,376 

Reimbursable 271 887 

Subtotal 243,457 220,263 

Unobligated balance 

Apportioned 13,063 4,238 

Unobligated balance not available 

Total status of budgetary resources

—

$ 256,520 

6,830 

$ 231,331 

Change in Obligated Balance: 

Obligated balance, net 

Unpaid obligations, brought forward, October 1 $ 44,815 $ 47,250 

Less: Uncollected customer payments from 

Federal sources, brought forward, October 1

Total unpaid obligated balance, net

(252)

44,563 

(201) 

47,049 

Obligations incurred, net 243,457 220,263 

Less: Gross outlays (230,862) (214,399) 

Less: Recoveries of prior year unpaid 

obligations, actual (1,322) (8,299) 

Change in uncollected customer payments 

from Federal sources (+/-) 28 (52) 

Obligated balance, net , end of period
 

Unpaid obligations 56,088 
 44,815 

Uncollected customer payments from Federal sources 

Total, unpaid obligated balance, net, end of period

(224)

55,864 

(253) 

44,562 

Net Outlays:
 

Gross outlays 230,862 
 214,399 

Less: Offsetting collections (134,728) (166,992) 

Less: Distributed offsetting receipts

Net Outlays

(55,014)

$ 41,120 

(5,962) 

$ 41,445 

96 Performance and Accountability Report—Fiscal Year 2008 

Principal Financial Statements 

Statement of Budgetary Resources 

For the years ended September 30, 2008 and 2007 

(Dollars shown in thousands) 
 

MC CP 2008 2007 

Revenue Activity: (Note 17) 

Sources of Collections: 

Premerger Filing Fees (Net of Refunds) (a) $ 102,916 $ — $ 102,916 $ 144,561 

Civil Penalties and Fines (b) — 13,475 13,475 5,562 

Redress (c) — 101,859 101,859 71,748 

Investment Interest — 412 412 — 

Divestiture Fund (d) 915 — 915 1,516 

Funeral Rule Violations — 187 187 31 

Court Registry — 3,072 3,072 359 

Total Cash Collections 103,831 119,005 222,836 223,777 

Accrual Adjustments (e) — (37,212) (37,212) (11,783) 

Total Custodial Revenue $ 103,831 $ 81,793 $ 185,624 $ 211,994 

Disposition of Collections: (Note 17) 

Transferred to Others: 

Treasury General Fund 215 68,459 68,674 11,436 

Department of Justice 87,559 — 87,559 154,787 

Receivers (f) — — — 3 

Redress to Claimants (g) — 33,313 33,313 41,304 

Contractor Fees Net of Interest Earned (h) — 12,119 12,119 3,826 

Investment Expense — 37 37 — 

Attorney Fees — 236 236 19 

Court Registry — — — 199 

(Increase)/Decrease in Amounts Yet to be 

Transferred

Net Custodial Activity

(16,057)

$ —

32,371 

$ — 

16,314 

$ — 

(420) 

$ — 

 Financial Section 

Principal Financial Statements 

Statement of Custodial Activity 

For the years ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

97 
Principal Financial Statements

Notes to the Statements of Custodial Activity

Accrual Adjustments

September 30, 2008 and 2007

(Dollars shown in thousands)

CP 2008 2007

Part 1 Civil Penalty Redress Subtotal CP Total Total

Judgments Receivable - Net Beginning $ 1,211 $123,974 $125,185 $125,185 $136,968 

Add:

 Current Year Judgments (Note 17j) 14,399 151,706 166,105 166,105 256,019 

 Prior Year Recoveries (Note 17k) — 3,865 3,865 3,865 857 

Less:

 Collections by FTC/Contractors/ Receivers (13,475) (101,859) (115,334) (115,334) (77,310)

 Collections by Court Registry — (3,072) (3,072) (3,072) —

 Collections by DOJ for Litigation Fees/Other (416) — (416) (416) (169)

Less:

 Adjustments to Allowance (Note 17 l) (1,546) (86,814) (88,360) (88,360) (191,180)

Judgments Receivable - Net, Ending $ 173 $ 87,800 $ 87,973 $ 87,973 $125,185 

 

Part 2 

Judgments Receivable - Net Ending $173 $87,800 $ 87,973 $ 87,973 $125,185 

Judgments Receivable - Net Beginning 1,211 123,974 125,185 125,185 136,968 

Accrual Adjustment $ (1,038) $(36,174) $(37,212) $(37,212) $(11,783)

98 Performance and Accountability Report—Fiscal Year 2008
Principal Financial Statements

Notes to the Statements of Custodial Activity

Change in Liability

September 30, 2008 and 2007

(Dollars shown in thousands)

MC CP 

Pre-Merger Divestiture Civil 

Penalty

Subtotal 

MC

Civil 

Penalty Redress SubtotalCP Total

Liabilities at 09/30/08 $ 15,357 $ 45,485 $ — $ 60,842 $ 173 $172,821 $172,994 $233,836 

Liabilities at 09/30/07 215 44,570 — 44,785 1,211 204,154 205,365 250,150 

Change in Liability 

Accounts $ 15,142 $ 915 $ — $ 16,057 $(1,038) $(31,333) $(32,371) $(16,314)

 Financial Section 99
 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

Note 1 – Summary of Significant Accounting Policies 

(a) Reporting Entity 

The Federal Trade Commission (FTC) is an independent United States (U.S.) 

Government agency, established by the Federal Trade Commission Act of 1914. The FTC 

enforces a variety of federal antitrust and consumer protection laws. The agency is headed 

by five Commissioners, nominated by the President and confirmed by the Senate, each 

serving a seven-year term. The President chooses one Commissioner to act as Chairman. 

No more than three Commissioners can be of the same political party. 

The FTC has three major bureaus: The Bureau of Competition (BC), which supports 

the strategic goal of maintaining competition; the Bureau of Consumer Protection (BCP), 

which supports the strategic goal of protecting consumers; and the Bureau of Economics 

(BE), which supports both bureaus and strategic goals. Additionally, various Offices provide 

mission support functions and services. 

The majority of FTC staff is located in Washington, DC, however, the FTC’s regions 

cover seven geographic areas. The regional offices work with the BC and BCP to conduct 

investigations and litigation; provide advice to state and local officials on the competitive 

implications of proposed actions; recommend cases; provide local outreach services to 

consumers and business persons; and coordinate activities with local, state, and regional 

authorities. The regional offices frequently sponsor conferences for small businesses, local 

authorities, and consumer groups. 

The financial statements include the accounts of all funds under the FTC’s control. As 

further described throughout these notes, in addition to appropriations received for salaries 

and necessary expenses, the FTC maintains control over funds that are primarily comprised 

of proceeds derived from court ordered judgments and settlements held for subsequent 

distribution to approved claimants. These proceeds are considered non-entity and are 

reported as such on the Balance Sheet and related activity is reported on the Statement of 

Custodial Activity. 

(b) Fund Accounting Structure 

The FTC’s financial activities are accounted for using various funds (i.e., Treasury Account 

Symbols (TAS)). They include the following for which the FTC maintains financial records: 

General Fund TAS 29X0100 consists of salaries and expense appropriation 

accounts used to fund agency operations and capital expenditures. Offsetting 

collections received during the year are also recorded in the general fund. (See Note 

13 - Exchange Revenues.) 

Deposit Fund TAS 29X6013 consists of monies held temporarily by the FTC as an 

agent for others (e.g. redress funds) prior to distribution through the consumer redress 

program. 

100 Performance and Accountability Report—Fiscal Year 2008 
Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands)

Suspense Fund TAS 29F3875 represent receipts awaiting proper classification, or held 

in escrow, until ownership is established and proper distributions can be made. This fund 

was discontinued in fiscal year 2008 due to new Treasury regulations. 

Miscellaneous Receipt Accounts TAS 29 1040 and 29 3220 reflect civil penalties and 

other miscellaneous receipts that by law are not retained by the FTC. Cash balances 

are automatically transferred to the general fund of the Treasury at the end of each 

fiscal year. 

(c) Basis of Accounting and Presentation 

The accompanying financial statements present the financial position, net cost of 

operations, changes in net position, budgetary resources, and custodial activities of 

the FTC. As noted above, the FTC maintains a single fund to account for salaries and all 

necessary expenses. Further, there are no intra-entity transactions with any other fund (e.g. 

deposit fund) that would require eliminating entries to present consolidated statements. 

Accordingly the statements are not labeled consolidated nor is the Statement of Budgetary 

Resources presented as combined. The financial statements have been prepared from the 

accounting records of the FTC on an accrual basis, in conformity with generally accepted 

accounting principles (GAAP) of the United States of America and with the form and 

content of financial statements specified by the Office of Management and Budget (OMB) 

Circular A-136, Financial Reporting Requirements (as revised June 2008). GAAP for Federal 

entities incorporate the standards prescribed by the Federal Accounting Standards Advisory 

Board. 

The preparation of financial statements in conformity with generally accepted 

accounting principles requires management to make estimates and assumptions that affect 

the reported amounts of assets and liabilities at the date of the financial statements and the 

reported amounts of revenues and expenses during the reporting period. Actual results 

could differ from those estimates. 

Certain amounts have been reclassified to reflect the change in method of classifying 

obligations from budgetary resources derived from offsetting collections of user fees 

from non-federal sources. Obligations incurred attributable to resources from user fees 

are categorized as direct obligations. The change is consistent with OMB guidance for 

reporting offsetting collections as specified in OMB Circular A-11. The change is reflected in 

external reports resulting in a change in the amount of obligations reported as direct and 

reimbursable on the Statement of Budgetary Resources and accompanying notes. Other 

reclassifications to prior-year balances have been made in the accompanying financial 

statements to make disclosures consistent with those of the current year. 

 Financial Section 101 
 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

(d) Budget Authority 

Congress passes appropriations annually that provide the FTC with authority to 

obligate funds for necessary expenses to carry out mandated program activities. These 

funds are available until expended, subject to OMB apportionment and to Congressional 

restrictions on the expenditure of funds. Also, the FTC places internal restrictions on fund 

expenditures to ensure the efficient and proper use of all funds. Appropriated funding 

is derived from various revenues and financing sources. The Statement of Budgetary 

Resources reflects the single general fund (e.g. TAS 29X0100) for which the FTC has budget 

authority. 

(e) Fund Balance with Treasury 

The FTC’s Fund Balance with Treasury includes appropriated funds and amounts that 

are not invested but held in the deposit fund TAS 29X6013 for subsequent disbursement 

to claimants. Amounts are carried forward until such time as goods or services are 

received and payment is made or until the funds are returned to the Treasury (relative 

to miscellaneous receipts or redress disgorgement). All cash receipts are deposited with 

Treasury and all disbursements for payroll and vendor invoices are disbursed by the 

Department of Treasury. 

(f) Investments 

In protecting consumers, the FTC collects proceeds from defendants in accordance 

with court ordered judgments and settlement agreements for consumer redress and holds 

these proceeds in a deposit fund TAS 29X6013 established with the Department of Treasury. 

The FTC also holds monies in its deposit fund in connection with a judgment that stipulates 

the divestiture of assets by the defendant. Under an agreement with the Department of 

Treasury, the portion of such judgments and settlements that are not immediately needed 

for cash disbursements are invested in Treasury securities. (See Note 5 Investments.) 

(g) Cash and Other Monetary Assets

 The FTC’s consumer redress agents process claims and disburse redress proceeds 

to approved claimants. Upon approval of the redress office, amounts necessary to cover 

current disbursement schedules are held as cash in interest bearing custodial accounts. (See 

accompanying Statement of Custodial Activity.) 

(h) Accounts Receivable 

Accounts receivable consist of amounts due from other federal entities and from 

current and former employees and vendors. Non-entity accounts receivable include 

102 Performance and Accountability Report—Fiscal Year 2008 
Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands)

uncollected civil monetary penalties imposed as a result of the FTC’s enforcement activities 

and uncollected redress judgments. Since the FTC does not retain redress receipts, a 

corresponding liability is also recorded for these non-entity accounts receivable. Gross 

receivables are reduced to net realizable value by an allowance for uncollectible accounts. 

(See Note 6 Accounts Receivable.) 

(i) Accrued Liabilities and Accounts Payable 

Accrued Liabilities and Accounts Payable represent a probable future outflow or other 

sacrifices of resources as a result of past transactions or events. Liabilities are recognized 

when they are incurred, regardless of whether they are covered by budgetary resources. 

Liabilities can not be liquidated without legislation that provides the resources to do so. 

Also, the government, acting in its sovereign capacity, can abrogate FTC liabilities (other 

than contracts). (See Note 8 for information on “Liabilities Not Covered by Budgetary 

Resources” and Note 9 for information on “Other Liabilities”). 

(j) Employee Health Benefits and Life Insurance 

FTC employees are eligible to participate in the contributory Federal Employees Health 

Benefit Program (FEHBP) and the Federal Employees Group Life Insurance Program (FEGLIP). 

The FTC contributes a percentage to each program to pay for current benefits. 

(k) Employee Retirement Benefits 

FTC employees participate in either the Civil Service Retirement System (CSRS) or the 

Federal Employees Retirement System (FERS). Employees hired after December 31, 1983, are 

covered by FERS and Social Security, while employees hired prior to January 1, 1984, may 

elect to either join FERS or remain in CSRS. Approximately 19 percent of FTC employees 

participate in CSRS. For employees participating in CSRS, the FTC contributes seven 

percent of the employee’s gross earnings to the CSRS Retirement and Disability Fund. For 

employees participating in FERS, the FTC contributes 11.2 percent to the Federal Employees’ 

Retirement Fund. Employees participating in FERS are covered under the Federal 

Insurance Contributions Act (FICA) for which the FTC contributes a matching amount to 

the Social Security Administration. FTC contributions are recognized as current operating 

expenses. The Thrift Savings Plan (TSP) is a defined contribution retirement savings and 

investment plan for employees covered by either CSRS or FERS. Participating employees 

may contribute any dollar amount or percentage of basic salary to TSP, not to exceed an 

annual dollar amount of $15,500, for 2008. CSRS participating employees do not receive 

a matching contribution from the FTC. FERS employees receive an agency automatic 

one percent contribution of gross pay to the TSP. The FTC also matches 100 percent of 

the first three percent contributed and 50 percent of the next two percent contributed. 

 Financial Section 103 
2008 Total 2007 Total 

Pension Expense Pension Expense 

Civil Service Retirement System $ 3,474 $ 3,774 

Federal Employees Retirement System 10,949 9,617 

Thrift Savings Plan 

Total 

4,276 

$ 18,699 

3,707 

$ 17,098 

 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

Such FTC contributions are recognized as current operating expenses. Although the FTC 

contributes a portion for pension benefits and makes the necessary payroll withholdings, 

it is not responsible for managing contribution refunds, employee’s retirement benefits, 

or the retirement plan assets. Therefore, the FTC financial statements do not report CSRS 

and FERS assets, accumulated plan benefits, or unfunded liabilities, if any, which may be 

applicable to employees. Such reporting is the responsibility of the Office of Personnel 

Management (OPM). However, the FTC recognizes the full cost of providing future pension 

benefits to covered employees at the time the employees’ services are rendered. OPM has 

provided the FTC with certain cost factors that estimate the true service cost of providing 

the pension benefits to covered employees. The cost factors used to arrive at the service 

cost are 25.2 percent of basic pay for CSRS covered employees and 12 percent of basic 

pay for FERS covered employees during fiscal years 2008 and 2007. The pension expense 

recognized in the financial statements equals this service cost to covered employees less 

amounts contributed by these employees. If the pension expense exceeds the amount 

contributed by the FTC as employer, the excess is recognized as an imputed financing cost. 

The excess total pension expense over the amount contributed by the agency must be 

financed by the OPM and is recognized as an imputed financing source, non-exchange 

revenue. 

Pension expenses in 2008 and 2007 consisted of the following: 

(l) Other Post-Employment Benefits 

FTC employees eligible to participate in the FEHBP and the FEGLIP may continue to 

participate in these programs after their retirement. The OPM has provided the FTC with 

certain cost factors that estimate the true cost of providing the post-retirement benefit 

to current employees. The FTC recognizes a current cost for these and Other Retirement 

Benefits (ORB) at the time the employee’s services are rendered. The ORB expense is 

financed by the OPM, and offset by the FTC through the recognition of an imputed 

financing source. During fiscal years 2008 and 2007, the cost factors relating to FEHBP were 

$5,220 and $5,572, respectively, per employee enrolled. During fiscal years 2008 and 2007, 

the cost factor relating to the FEGLIP was 0.02 percent of basic pay per employee enrolled. 

104 Performance and Accountability Report—Fiscal Year 2008 
Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands)

(m) Net Position 

The FTC’s net position is composed of the following: 

Unexpended appropriations include the amount of unobligated balances and 

undelivered orders. Unobligated balances are the amount of budgetary authority remaining 

after deducting the cumulative obligations from the amount available for obligation. 

Cumulative results of operations represent the net results of operations since 

inception, the cumulative amount of prior period adjustments, the remaining book value of 

capitalized assets, and future funding requirements. 

(n) Revenues and Other Financing Sources 

The FTC’s revenues are derived from spending authority from offsetting collections 

and from direct appropriation. Spending authority from offsetting collections is comprised 

of amounts received for services performed under reimbursable agreements with other 

Federal agencies and amounts received from the collection of fees under the authority 

of the Hart-Scott-Rodino Antitrust Improvements (HSR) Act of 1976 and the Do-Not-Call 

Implementation Act. Revenue is recognized (accrued) when services are performed under 

reimbursable agreements. Revenues from fees are recognized when collected. All of FTC’s 

offsetting collections are exchange revenues. (See Note 13 Exchange Revenues.) 

In addition to exchange revenue, the FTC receives financing sources through direct 

appropriation from the general fund of the Treasury to support its operations. A financing 

source, appropriations used, is recognized to the extent these appropriated funds have 

been consumed. The FTC received a financing source in the form of a direct appropriation 

that represented approximately 40 percent of total revenues and financing sources realized 

in fiscal year 2008 and 30 percent in fiscal year 2007. 

(o) Methodology for Assigning Cost 

Total costs are allocated to each strategic goal based on two components: the direct 

costs charged to each strategic goal and the indirect costs attributed to each strategic goal, 

based on the percentage of direct FTE used by each strategic goal. 

 Financial Section 105 
 

 

 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

Note 2 – Non-entity Assets 

The following summarizes non-entity assets as of September 30, 2008 and 2007:

2008 2007 

Intragovernmental: 

Fund balance with Treasury $ 2,507 $ 1, 656 

Investments (Note 5) 117, 514 — 

Total intragovernmental $ 120,021 $ 1,656 

Cash and other monetary assets (Note 4) 10, 485 123,309 

Accounts receivable 87,982 125,185 

Total non-entity assets 218,488 250,150 

Total entity assets 99,431 95,870 

Total assets $ 317,919 $ 346,020 

Non-entity Fund Balance with Treasury is comprised of undisbursed premerger filing 

fees (see Note 13) and deposits held for the consumer redress program. Cash and other 

Monetary Assets consist of amounts on deposit with FTC distribution agents. 

106 Performance and Accountability Report—Fiscal Year 2008 
2008 2007 

Fund Balance: 

Appropriated funds (General) $ 84,285 $ 84,192 

Suspense fund–undisbursed premerger filing fees — 215 

Deposit funds–redress 2,507 1,441 

Total $ 86,792 $ 85,848 

Status of Fund Balance with Treasury 2008 2007 

Unobligated balance 

Apportioned $ 13,063 $ 4,238 

Unavailable — 6,830 

Temporarily not available pursuant to Public Law 15,357 28,561 

Obligated balance not yet disbursed 55,865 44,563 

Non-Budgetary fund balance with Treasury 

Suspense fund–undisbursed HSR filing fees — 215 

Deposit funds–redress 

Total 

2,507 1,441 

$ 86,792 $ 85,848

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

Note 3 – Fund Balance with Treasury 

Fund balance with Treasury consisted of the following at September 30, 2008 and 2007: 

Obligated Balance not yet Disbursed includes accounts payable and undelivered 

orders that have reduced unexpended appropriations but have not yet decreased the cash 

balance on hand. Temporarily not available pursuant to Public Law represents offsetting 

collections in excess of appropriated resources. (The amount reported as obligated balance 

not yet disbursed for FY 2008 differs from the statement of budgetary resources by $1 due 

to rounding.) 

Other Information The $2.5 million in deposit funds (redress) above are not available to 

finance FTC activities and are classified as non-entity assets, and a corresponding liability is 

recorded. 

 Financial Section 107 
2008 2007 

Other Monetary Assets: 

Redress contractors $ 10,485 $ 78,739 

Divestiture fund 

Total other monetary assets 

— 44,570 

$ 10,485 $ 123,309 

Amounts for 2008 Balance Sheet Reporting 

Amortized Market 

Amortization (Premium) Interest Investment Other Value 

Intragovernmental: 

Cost Method Discount Receivable Net Adjustments Disclosure 

Securities: 

Non-Marketable: 

Market-Based 

Total 

$ 117,514 

$ 117,514 n/a 

$ — $ — $ 117,514 $ — 

$ — $ — $ 117,514 $ — 

$ 117,514 

$ 117,514 

 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

Note 4 – Cash and Other Monetary Assets 

In connection with the consumer redress program, cash amounts necessary to 

cover current disbursement schedules are held at financial institutions in interest bearing 

accounts pursuant to court orders and are reported as non-entity assets. A corresponding 

liability is recorded for these assets. The FTC’s consumer redress agents process claims 

and disburse redress proceeds to claimants upon approval of the redress office. (See 

accompanying Statement of Custodial Activity.) 

Cash and other monetary assets consisted of the following as of September 30, 2008 

and 2007: 

Note 5 – Investments 

Collections against monetary judgments are deposited in a deposit fund (29X6013) 

with the Department of Treasury. Funds not needed to cover immediate disbursements are 

invested in special Government Account Series (GAS) securities under an agreement with 

the Bureau of Public Debt. The GAS is non-marketable market based Treasury securities 

that are not traded on any securities exchange but mirror the prices of particular Treasury 

securities trading in the Government securities market. 

Investments consisted of the following as of September 30, 2008: 

108 Performance and Accountability Report—Fiscal Year 2008 
Gross Allowance for 

Entity assets:
 

Receivables Uncollectible Accounts 2008 Net 2007 Net 

Intragovernmental
 

Accounts receivable $ 48 $ — $ 48 $ 23
 

Non-entity assets:
 

Accounts receivable $ 9
 $ — $ 9 $ — 

Consumer redress 764,508 676,708 87,800 123,974 

Civil penalties 1,719 1, 546 173 1,211 

Total non-entity 

assets $ 766,236 $ 678,254 $ 87,982 $ 125,185 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands)

Note 6 – Accounts Receivable 

Opening accounts receivable balances reflect the Federal Accounting Standards 

Advisory Board (FASAB) standard for the recognition of losses using the collection 

criterion of “more likely than not.” This criterion results in receivable balances that are more 

conservatively stated than those valued by the private sector under generally accepted 

accounting principles. The Board states that it is appropriate to recognize the nature of 

federal receivables, which, unlike trade accounts of private firms or loans made by banks, 

are not created through credit screening procedures. Rather, these receivables arise 

because of the assessment of fines from regulatory violations. In these circumstances, 

historical experience and economic realities indicate that these types of claims are 

frequently not fully collectible. 

The method used to estimate the allowance for uncollectible receivables consists of 

individual case analysis by the attorney case manager with respect to the debtor’s ability 

and willingness to pay, the defendant’s payment record, and the probable recovery amount 

including the value of the sale of assets. Based on the aforementioned, cases are referred 

to the Treasury Offset Program for collection activities after the receivable becomes six 

months delinquent in payment. 

Accounts receivable consisted of the following as of September 30, 2008 and 2007: 

 Financial Section 109 
Service Acquisition Accumulated 2008 Net 2007 Net 

Asset Class 

Equipment 

Life 

5-20 yrs. 

Value 

$ 7,491 

Depreciation 

$ 6,497 

Book Value 

$ 994 

Book Value 

$ 1,471 

Leasehold 

improvements 10-15 yrs. 11,297 2,334 8,963 5,528 

Software 3 yrs. 10,612 5,471 5,141 3,656 

Software-indevelopment 

Total 

5 yrs. — 

$ 29,400 

— 

$ 14,302 

— 

$ 15,098 

1,000 

$ 11,655 

 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

Note 7 – General Property and Equipment, Net 

FTC capitalizes property and equipment with an initial cost of $100 thousand or 

greater and a useful life over two years. Such assets are depreciated using the straight-line 

method of depreciation with service lives ranging from five to twenty years. Additionally, 

internal use software development and acquisition costs of $100 thousand or greater are 

capitalized as software development-in-progress until the development stage has been 

completed and the software successfully tested. Upon completion and testing, software 

development-in-progress costs are reclassified as internal use software costs and amortized 

using the straight-line method over the estimated useful life of three years. Purchased 

commercial software that does not meet the capitalization criteria is expensed. Capitalized 

property and equipment, net of accumulated depreciation, consisted of the following as of 

September 30, 2008 and 2007: 

Amounts reported as Equipment are comprised mostly of computer hardware and 

other building equipment. The FTC does not own buildings, but rather, in partnership with 

GSA leases both federally owned (by GSA) and commercial space. (See Note 10 Leases.) 

The leasehold improvements above consist of improvements made to FTC headquarters 

building located in Washington, DC (which is owned by the GSA), and to FTC commercially 

leased space also located in Washington, DC. 

Depreciation expense was $4,786 and $4,957 for fiscal years ending September 30, 

2008 and 2007, respectively and is contained in the accumulated depreciation. 

110 Performance and Accountability Report—Fiscal Year 2008 
 

20 0 8 20 07 

Intragovernmental: 

Undisbursed premerger fees liability $ 15,357 $ 215 

Civil penalty collections due to Treasury 173 1,211 

FECA liability 361 391 

1,817 Total intragovernmental liabilities not covered by budgetary 

resources 15,891 

With the Public: 

Accrued leave 9,058 8,206 

Actuarial FECA 1,925 1,965 

Undisbursed consumer redress 85,021 80,180 

Divestiture fund due 45,485 44,570 

Accrued consumer redress due to claimants 

Total liabilities not covered by budgetary resources 

87,800 

$ 245,180 

123,974 

$ 260,712 

Total liabilities covered by budgetary resources 

Total liabilities 

$ 22,663 

$ 267,843 

$ 12,705 

$ 273,417 

 

 Financial Section 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands)

Note 8 – Liabilities Not Covered by Budgetary Resources 

Intragovernmental liabilities and liabilities with the public not covered by budgetary 

resources as of September 30, 2008 and 2007 are shown below: 

(a) Intragovernmental and With the Public 

(b) Other Information 

Undisbursed Premerger Fees Liability represents undisbursed filing fees collected 

under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, which are due to 

the Department of Justice in a subsequent period. 

Civil Penalty Collections Due to Treasury represents the corresponding liability 

relative to accounts receivable due for civil monetary penalties, which will be transferred to 

the general fund of the Treasury upon receipt. 

Federal Employee’s Compensation Act (FECA) Liability represents the unfunded 

liability for workers’ compensation claims payable to the Department of Labor (DOL) and 

an actuarial liability for future workers’ compensation claims. The actuarial liability is based 

on the liability to benefits paid ratio provided by DOL multiplied by the average of benefits 

paid over three years. Fiscal year 2007 liability was reclassified to be consistent with fiscal 

year 2008 presentation. (See Note 1c.) 

111 
 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

Accrued Leave represents a liability for earned leave and is reduced when leave is 

taken. The balance in the accrued annual leave account is reviewed quarterly and adjusted 

as needed to accurately reflect the liability at current pay rates and leave balances. Accrued 

annual leave is paid from future funding sources and, accordingly, is reflected as a liability 

not covered by budgetary resources. Sick and other leave is expensed as taken. 

Undisbursed Consumer Redress represents a non-entity liability corresponding to 

amounts reported as non-entity assets (including Cash, Investments and Fund Balance with 

Treasury for TAS 29X6013). These funds are held until distributed to consumers or returned 

to Treasury through disgorgement. 

Divestiture Fund Due represents the corresponding liability offsetting the amount 

reported as non-entity assets (investments) held by FTC pending divesture of assets 

pursuant to a court ordered judgment. These funds are currently invested in Treasury 

Securities. (See Note 5 Investments.) 

Accrued Consumer Redress Due to Claimants represents the contra account for 

accounts receivable due from judgments obtained as a result of the agency’s consumer 

redress litigation. 

112 Performance and Accountability Report—Fiscal Year 2008 
Note 9 – Other Liabilities

The following summarizes Other Liabilities as of September 30, 2008 and 2007:

2008

Non-Current

2008

Current

2008

Total

Intragovernmental:

FECA liability $ 361 $ — $ 361

Civil penalty collections due to Treasury 35 138 173

Accrued benefits — 1,137 1,137

Undisbursed premerger fees liability — 15,357 15,357

Total Intragovernmental 396 16,632 17,028

Accrued leave — 9,058 9,058

Actuarial FECA 1,925 — 1,925

Accrued salary — 5,914 5,914

Total other liabilities $ 2,321 $ 31,604 $ 33,925

2007

Non-Current

2007

Current

2007

Total

Intragovernmental:

FECA liability $ 391 $ — $ 391

Civil penalty collections due to Treasury 104 1,107 1,211

Accrued benefits — 834 834

Undisbursed premerger fees liability — 215 215

Total Intragovernmental 495 2,156 2,651

Accrued leave — 8,206 8,206

Actuarial FECA 1,965 — 1,965

Accrued salary — 4,435 4,435

Total other liabilities $ 2,460 $ 14,797 $ 17,257

For a description of FECA liability see Note 8 (b) and 1 (c).

Note 10 – Leases

Leases of commercial property are made through and managed by GSA. The 

Commission has leases on four government-owned properties and ten commercial 

properties. The FTC’s current leases expire at various dates through 2017. Two leases provide 

for tenant improvement allowances totaling approximately $7,300 and provide that these 

Notes to the Financial Statements

For the Years Ended September 30, 2008 and 2007

(Dollars shown in thousands)

 Financial Section 113
Fiscal Year 

2009 $ 12,471 

2010 12,598 

2011 12,799 

2012 10,847 

2013 1,359 

Thereafter 

Total Future Minimum Lease Payments 

4,938 

$ 55,012 

 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

costs be amortized over the length of the leases. Under the terms of the leases, the FTC 

agrees to reimburse the landlord for the principal balance of the unamortized portion of 

the tenant improvement allowance in the event the agency vacates the space before lease 

expiration. The FTC rents approximately 595,000 square feet of space in both commercial 

and government-owned properties for use as offices, storage and parking. All FTC leases 

are operating leases. Rent expenditures for the years ended September 30, 2008 and 2007, 

were approximately $19,143 and $17,412, respectively. 

Future minimum lease payments due under leases of government-owned property as 

of September 30, 2008, are as follows: 

Fiscal Year 

2009 $ 5,890 

2010 303 

2011 292 

2012 260 

2013 206 

Total Future Minimum Lease Payments $ 6,951 

Future minimum lease payments under leases of commercial property due as of 

September 30, 2008 are as follows: 

Note 11 – Commitments and Contingencies 

Contingencies The FTC is a party in various administrative proceedings, legal actions, 

and claims brought by or against it. In the opinion of FTC management and legal counsel, 

the ultimate resolution of these proceedings, actions, and claims, will not materially affect 

the financial position or the results of operation of the FTC. 

114 Performance and Accountability Report—Fiscal Year 2008 
Note 12 – Intragovernmental Costs and Exchange Revenues

For ‘exchange revenue with the public,’ the buyer of the goods or services is a nonfederal entity. For ‘intragovernmental costs’ the buyer and seller are both federal entities. If 

a federal entity purchases goods or services from another federal entity and sells them to 

the public, the exchange revenue would be classified as ‘with the public,’ but the related 

costs would be classified as ‘intragovernmental.’ The purpose of this classification is to 

enable the federal government to provide consolidated financial statements, and not to 

match public and intragovernmental revenue with costs that are incurred to produce 

public and intragovernmental revenue.

2008 2007

Maintain Competitive Strategic Goal:

Intragovernmental gross costs $ 24,696 $ 24,449

Public costs 80,157 73,467

Total Maintaining Competition costs 104,853 97,916

Intragovernmental earned revenue (276) (723)

Public earned revenue (102,916) (144,562)

Total Maintaining Competition net earned revenue (103,192) (145,285)

Maintaining Competition net (revenue) costs 1,661 (47,369)

Consumer Protection Strategic Goal:

Intragovernmental gross costs 33,140 31,626

Public costs 107,565 95,036

Total Consumer Protection costs 140,705 126,662

Intragovernmental earned revenue (42) (73)

Public earned revenue (16,160) (21,602)

Total Consumer Protection net earned revenue (16,202) (21,675)

Consumer Protection net (revenue) costs 124,503 104,987

Net cost of operations $ 126,164 $ 57,618

Note 13 – Exchange Revenues

Exchange revenues are earned through the collection of fees under the Hart-ScottRodino (HSR) Act. This Act, in part, requires the filing of premerger notifications with 

the FTC and the Antitrust Division of the Department of Justice (DOJ) and establishes a 

waiting period before certain acquisitions may be consummated. Mergers with transaction 

Notes to the Financial Statements

For the Years Ended September 30, 2008 and 2007

(Dollars shown in thousands)

 Financial Section 115
20 0 8 20 07 

HSR premerger filing fees $ 102,917 $ 144,562 

Do Not Call registry fees 16,159 21,602 

Reimbursable agreements 318 796 

Total $ 119,394 $ 166,960 

 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

amounts over $50 million (adjusted annually based on the gross national product) require 

the acquiring party to pay a filing fee. The filing fees are based on the transaction amount 

and follow a three-tiered structure: $45, $125 and $280. The FTC collects all HSR premerger 

fees, retains one-half, and remits 50 percent to the DOJ Antitrust Division pursuant to public 

law. Revenue is recognized upon collection of the appropriate fee and verification of proper 

documentation. 

Exchange revenues are also earned through the collection of fees for the national Do 

Not Call Registry. This registry operates under Section 5 of the FTC Act, which enforces 

the Telemarketing Sales Rule (TSR). The Do-Not-Call Implementation Act, Public Law No. 

108-010, gives the FTC authority to establish fees sufficient to offset enforcement of the 

provisions related to the Do Not Call Registry. Telemarketers are required to pay an annual 

subscription fee and download from the Do Not Call Registry database a list of telephone 

numbers of consumers who do not wish to receive calls. Fees are based on the number of 

area codes downloaded. Effective October 1, 2008, the minimum charge decreased from 

$62 to $54 to download one area code. The maximum charge decreased from $17,050 to 

$14,850 for all area codes within the United States. Revenue is recognized when collected 

and the Telemarketer is given access to the requested data. 

Exchange revenue is also earned for services provided to other government agencies 

through reimbursable agreements. The FTC recovers the full cost of services, primarily 

salaries and related expenses. Revenue is earned at the time the expenditures are incurred 

against the reimbursable order. All exchange revenues are deducted from the full cost of 

the FTC’s programs to arrive at net program cost. 

Exchange revenue consisted of the following: 

116 Performance and Accountability Report—Fiscal Year 2008 
2008 2007 

Direct Obligations: 

Category A $ 243,186 $ 219,376 

Reimbursable Obligations: 

Category A — — 

Category B 271 887 

Total Reimbursable Obligations 

Total 

271 

$ 243,457 

887 

$ 220,263 

 Financial Section 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands)

Note 14 – Apportionment Categories of Obligations Incurred: Direct vs. Reimbursable 

Obligations 

Apportionment Categories of Obligations Incurred 

Obligations incurred reported on the Statement of Budgetary Resources in 2008 and 

2007 consisted of the following: 

Prior year direct and reimbursable obligations have been reclassified to reflect a change 

in the classification of obligations incurred. Obligations incurred attributable to offsetting 

collections from user fees have been reclassified as direct obligations pursuant to OMB 

Circular A-11. (See Note 1(c).) 

Note 15 – Explanation of Differences between the Statement of Budgetary Resources 

and the Budget of the United States Government 

There are no material differences between amounts reported in the Statement of 

Budgetary Resources and the actual amounts reported in the Budget of the United States 

Government. 

Note 16 – Explanation of Differences between Liabilities Not Covered By Budgetary 

Resources and Components Requiring or Generating Resources in Future Periods 

FECA Liability and Accrued Leave The changes in both of these balances 

between FY 2008 and FY 2007 are reflected as part of Components requiring or Generating 

Resources in Future Periods in Note 19, Reconciliation of Net Cost of Operations to Budget. 

The increase in Accrued Leave of $852,000 is included in the increase in Annual Leave 

Liability line on the Statement of Financing, and the increase in FECA Liability of $70 is 

included in the “Other” line as part of the resources that fund future periods. 

117 
 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

Note 17 – Custodial Activities 

The FTC functions in a custodial capacity with respect to revenue transferred or 

transferable to recipient government entities or the public. These amounts are not reported 

as revenue to the FTC. The major components of the FTC’s custodial activities are discussed 

below. For its custodial activities, the FTC accrues accounts receivable and a corresponding 

liability when a judgment is received from courts or a settlement is reached. Administrative 

expenses are recognized when incurred. 

(a) Premerger Filing Fees 

All Hart-Scott-Rodino (HSR) premerger filing fees are collected by the FTC pursuant to 

section 605 of Public Law No. 101-162, as amended, and are divided evenly between the 

FTC and the DOJ. The collected amounts are then credited to the appropriations accounts 

of the two agencies (the FTC’s “Salaries and Expenses” and the DOJ’s “Salaries and Expenses, 

Antitrust Division”). During fiscal years 2008 and 2007 FTC collected $205,833 and $289,122 

respectively, in HSR premerger filing fees. Total collections in the amount of $102,916 were 

retained for distribution, of which $87,559 of this collection was transferred to DOJ in 2008 

and $144,561 in 2007. As of September 30, 2008 the undistributed collections remaining in 

the amount of $15,357 represents amounts to be transferred to DOJ in a future period. 

(b) Civil Penalties and Fines 

Civil penalties collected in connection with the settlement or litigation of the FTC’s 

administrative or federal court cases are collected by either the FTC or DOJ as provided for 

by law. The DOJ assesses a fee equivalent to three percent of amounts collected before 

remitting them to the FTC. The FTC then deposits these collections into the Treasury. Civil 

penalties collected, also including amounts collected for undecided civil penalty cases, are 

held until final disposition of the case. 

(c) Redress 

The FTC obtains consumer redress in connection with the settlement or litigation of 

both its administrative and its federal court cases. The FTC attempts to distribute funds 

thus obtained to consumers whenever possible. If consumer redress is not practical, the 

funds are paid (disgorged) to the Treasury, or on occasion, other alternatives, such as 

consumer education, are explored. Major components of the program include eligibility 

determination, disbursing redress to claimants, and accounting for the disposition of these 

funds. Collections made against court-ordered judgments totaled $101,859 and $71,748 

during fiscal years 2008 and 2007, respectively. 

The sources of these collections are as follows: 

118 Performance and Accountability Report—Fiscal Year 2008 
2008 2007 

Agents $ 22 $ 22,761 

Receivers 568 6,740 

FTC 101,269 42,247 

Total $ 101,859 $ 71,748 

2008 2007 

Beginning Balance $ 44,570 $ 43,054 

Interest 1,547 2,228 

Expense (632) (712) 

Net Total 915 1,516 

Ending Balance $ 45,485 $ 44,570 

 Financial Section 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands)

(d ) Divestiture Fund 

One judgment (obtained by the FTC in support of its strategic goal to maintain 

competition) stipulates the divestiture of assets by the defendants into an interest-bearing 

account to be monitored by the agency. The account balance represents principal and 

related interest held in the Treasury’s Bureau of Public Debt. A corresponding liability is 

recorded. Net interest earned in fiscal year 2008 and 2007, was $915 and $1,516 respectively.

Divestiture Fund activity in fiscal years 2008 and 2007 consisted of the following: 

(e) Accrual Adjustments 

These adjustments represent the difference between the agency’s opening and closing 

accounts receivable balances. Accounts receivable are the funds owed to the agency (as a 

custodian) and ultimately to consumers or other entities. See Exhibit A for computation of 

accrual adjustments to the Statement of Custodial Activity. 

(f) Receivers 

Funds forwarded to receivers for distribution to consumers were $0 and $3 for fiscal 

year 2008 and 2007, respectively. 

(g) Redress to Claimants 

Redress to claimants consists of amounts distributed to consumers by the FTC, one 

of its contracted agents, the court appointed receiver, or the defendant. In fiscal year 

2008 a total of $33,313 was distributed to consumers: $32,745 was paid by the FTC and its 

119 
 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

contracted agents, and $568 was paid by receivers. In fiscal year 2007, a total of $41,304 

was distributed to consumers: $34,564 was paid by the FTC and its contracted agents, and 

$6,740 was distributed by receivers. 

(h) Contractor Fees Net of Interest Earned 

Immediately prior to distribution to claimants, investments in Treasury securities 

are liquidated and transferred to one of the Agency’s redress agents for distribution to 

consumers. These funds are deposited in interest-bearing custodial accounts at a financial 

institution approved by Treasury Financial Reserve Board. Earnings on the deposits are 

used to help fund administrative expenses. Administrative expenses are also paid from 

judgment proceeds in accordance with court orders. Agent expenses for the administration 

of redress activities and funds management amounted to $13,273 and $6,896 during the 

years ended September 30, 2008 and 2007, respectively. Interest earned was $1,154 and 

$3,070 during fiscal years 2008 and 2007 respectively, with the difference of $12,119 and 

$3,826 representing net expense. 

(i) Change in Liability Accounts 

Liability accounts contain funds that are in the custody of the agency or its agents, and 

are owed to others (consumers, receivers for fees, and/or the DOJ). See Exhibit B for the 

computation of liability account changes. 

(j) Current Year Judgments 

A judgment is a formal decision handed down by a court. Redress judgments include 

amounts that defendants have agreed, or are ordered to pay, for the purpose of making 

restitution to consumers deemed to have been harmed by the actions of the defendant(s) 

in the case. For purposes of presentation in Exhibit A, redress judgments include cases 

in which the FTC, or one of its agents, is directly involved in the collection or distribution 

of consumer redress. In fiscal years 2008 and 2007 the agency obtained and reported in 

Exhibit A monetary redress judgments against defendants totaling $151,706 and $250,076, 

respectively. (This amount excludes civil penalties.) 

The FTC does not include in the presentation of Exhibit A current redress judgment 

cases in which the FTC, or one of its agents, is not directly involved with the collection or 

distribution of consumer redress. These are cases in which the defendant, or other third 

party, has been ordered to pay redress directly to the consumers. In most of these cases, 

the judgment has ordered redress in the form of refunds or credits. 

The agency also obtained civil penalty judgments of $14,369 and $5,943 in fiscal years 

2008 and 2007, respectively. 

120 Performance and Accountability Report—Fiscal Year 2008 
Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands)

(k) Treasury Referrals and Recoveries 

Monetary judgments six months or more past due are referred to the Treasury for 

follow-up collection efforts in keeping with the Debt Collection Improvement Act of 

1996 (DCIA). Treasury’s Debt Management Services (DMS) administers the program, and 

deducts 18 percent from amounts ultimately collected for its fee. Collections, net of fees, 

are returned to the FTC for distribution to either consumers, in the form of redress, or 

to the general fund of the Treasury as disgorged amounts. In fiscal years 2008 and 2007, 

approximately $67 and $200 (net of fees) were collected by DMS based on FTC referrals 

and are reported as collections on the Statement of Custodial Activity. The FTC refers to 

DMS only those cases as defined in DCIA. This excludes cases that are in receivership, or 

bankruptcy or foreign debt. During 2008 and 2007, approximately $50,951 and $600 were 

referred to the DMS for collection. 

Collections for cases that were written off in a previous year were approximately $3,865 

and $857 for fiscal years 2008 and 2007, respectively. (See Exhibit A.) 

(l) Adjustments to the Allowance 

Adjustments to the allowance for redress, totaling $86,814 represent adjustments to the 

provision for uncollectible amounts. Adjustments to the allowance for civil penalty, totaling 

$1,546 represent adjustments to the provision for uncollectible amounts. 

Note 18 – Undelivered Orders at the End of the Period 

The amount of budgetary resources obligated for undelivered orders at the end of 

September 30, 2008 and 2007 is $33,427 and $31,634 respectively. 

 Financial Section 121 
2008 2007 

Resources Used to Finance Activities: 

Budgetary Resources Obligated 

Obligations incurred $ 243,457 $ 220,263 

Less: Spending authority from offsetting 

collections and recoveries (120, 693) (175,344) 

Obligations net of offsetting collections 

and recoveries 122,764 44,919 

Other Resources 

Imputed financing from costs absorbed by others 7,411 7,412 

Net other resources used to finance activities 7,411 7,412 

Total resources used to finance activities 

Resources Used to Finance Items not Part of the Net Cost 

of Operations: 

Change in budgetary resources obligated for goods, 

services and benefits ordered but not yet provided 

Resources that finance the acquisition of assets 

130,175 

(1,491) 

(8,512) 

52,331 

1,988 

(2,495) 

Total resources used to finance items not part of the net 

cost of operations 

Total resources used to finance the net cost of 

operations 

Components of the Net Cost of Operations that will not 

Require or Generate Resources in the Current Period: 

Components Requiring or Generating Resources in 

Future Periods: 

Increase in annual leave liability (Note 16) 

Other (Note 16) 

Total components of Net Cost of Operations that will 

(10,003) (507) 

120,172 51,824 

852 

70 

511 

44 

require or generate resources in future periods 922 555 

Components not Requiring or Generating Resources: 

Depreciation and amortization 4,786 4,957 

Losses on Disposition of Assets–Other 

Total Components of Net Cost of Operations that will 

284 282 

not require or generate resources 

Total components of net cost of operation that will not 

require or generate resources in the current period 

Net Cost of Operations 

5,070 5,239 

5,992 5,794 

$ 126,164 $ 57,618 

 

Notes to the Financial Statements 

For the Years Ended September 30, 2008 and 2007 

(Dollars shown in thousands) 

Note 19 – Reconciliation of Net Cost of Operations to Budget 

122 Performance and Accountability Report—Fiscal Year 2008 
Other Accompanying Information

Inspector General–Identified Management and Performance Challenges

 Financial Section 123
124 Performance and Accountability Report—Fiscal Year 2008
 Financial Section 125
126 Performance and Accountability Report—Fiscal Year 2008
Chairman’s Response to OIG Challenges

 Financial Section 127
128 Performance and Accountability Report—Fiscal Year 2008
 Financial Section 129
 

Summary of Financial Statement Audit and 

Management Assurances 

TABLE 1: SUMMARY OF FinAnCiAL STATEMEnT AUDiT 

Audit Opinion Unqualified 

Restatement No 

Material Weaknesses 

Beginning 

Balance New Resolved Consolidated Ending Balance 

0 0 0 0 0 

Total Material 

Weaknesses 0 0 0 0 0 

TABLE 2: SUMMARY OF MAnAGEMEnT ASSURAnCES
 

Effectiveness of Internal Control Over Financial Reporting (FMFIA Para. 2) 

Statement of 

Assurance Unqualified 

Material Weaknesses 

Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance 

0 0 0 0 0 0 

Total Material 

Weaknesses 0 0 0 0 0 0 

Effectiveness of Internal Control Over Operations (FMFIA Para. 2) 

Statement of 

Assurance Unqualified 

Material Weaknesses 

Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance 

0 0 0 0 0 0 

Total Material 

Weaknesses 0 0 0 0 0 0 

Conformance with Financial Management System Requirements (FMFIA Para. 4) 

Statement of 

Assurance Systems conform to financial management system requirements 

Nonconformances 

Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance 

0 0 0 0 0 0 

Total 

Nonconformances 0 0 0 0 0 0 

130 Performance and Accountability Report—Fiscal Year 2008 
Improper Payments Information Act 

The Improper Payments Information Act (Public Law No. 107-300) defined requirements 

to reduce improper and erroneous payments made by the federal government. The OMB 

also has established specific reporting requirements for agencies with programs that have a 

significant risk of erroneous payments and for reporting on the results of recovery auditing 

activities. A significant erroneous payment as defined by OMB guidance is an annual 

erroneous program payment that exceeds both 2.5 percent of the program payments and 

$10 million. The agency reviews its controls and systems under the FMFIA to ensure that the 

agency can rely on them. In this review, the agency has not identified any programs where 

significant erroneous payments have occurred within the FTC. The agency will continue to 

review its programs annually to determine if any significant erroneous payments exist.

 Financial Section 131 

Appendices 

Appendix A: Acronyms
 

AAI American Antitrust Institute 

ALJ Administrative Law Judge 

AMC Antitrust Modernization Commission 

BC Bureau of Competition 

BCP Bureau of Consumer Protection 

BPD Bureau of Public Debt 

CAN-SPAM Act Controlling the Assault of Non-Solicited Pornography 

and Marketing Act 

CFO Chief Financial Officer 

CG Comptroller General 

CIO Chief Information Officer 

CON Certificate of Need 

COPPA Children’s Online Privacy Protection Act 

CP Consumer Protection 

CRSS Consumer Response Systems and Service 

CSN Consumer Sentinel Network 

CSRS Civil Service Retirement System 

DCIA Debt Collection Improvement Act 

DMS Debt Management Services 

DNC Do Not Call 

DOJ Department of Justice 

DOL Department of Labor 

EFT Electronic Funds Transfer 

EISA Energy Independence and Security Act 

ESD Enterprise Service Desk 

FASAB Federal Accounting Standards Advisory Board 

FBI Federal Bureau of Investigation 

FEGLIP Federal Employees Group Life Insurance Program 

FEHBP Federal Employees Health Benefit Program 

FERS Federal Employees Retirement System 

FICA Federal Insurance Contributions Act 

FISMA Federal Information Security Management Act 

FMFIA Federal Managers’ Financial Integrity Act 

 Appendix A 135 
 

FTC Federal Trade Commission 

FTE Full-Time Equivalent 

FY Fiscal Year 

GAAP Generally Accepted Accounting Principles 

GAO Government Accountability Office 

GAS Government Account Series 

GSA General Services Administration 

HSR Act Hart-Scott-Rodino Act 

IG Inspector General 

IT Information Technology 

ITM Information and Technology Management 

ITMO Information and Technology Management Office 

MC Maintain Competition 

MD&A Management’s Discussion and Analysis 

OIG Office of Inspector General 

OMB Office of Management and Budget 

OPM Office of Personnel Management 

ORB Other Retirement Benefits 

PAR Performance and Accountability Report 

PART Program Assessment and Rating Tool 

PIA Privacy Impact Assessment 

PII Personally Identifiable Information 

P&E Property and Equipment 

PSC Privacy Steering Committee 

SAS Statement on Auditing Standard 

SAT Senior Assessment Team 

SHI Sensitive Health Information 

SNSP Shared Network Space Policy 

TAS Treasury Account Symbol 

TMS Travel Management System 

TSP Thrift Savings Plan 

TSR Telemarketing Sales Rule 

U.S. United States 

USSGL United States Standard General Ledger 

136 Performance and Accountability Report—Fiscal Year 2008 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix B: Contact Information 

and Acknowledgements 

Federal Trade Commission 

Address Federal Trade Commission 

600 Pennsylvania Avenue, NW 

Washington, DC 20580 

General Information Number 202-326-2222 

Internet Home Page www.ftc.gov 

FTC Spanish Home Page www.ftc.gov/ojo 

Strategic Plan Internet Site www.ftc.gov/strategicplan 

FTC Press Releases www.ftc.gov/opa/pressold.shtm 

Performance and Accountability Report (PAR) Specific 

The FTC welcomes comments or suggestions for improvement of its PAR. Please contact 

the agency to provide feedback or to request additional copies. 

PAR Internet Site www.ftc.gov/par 

PAR Contact Darlene Cossette 

PAR Telephone 202-326-3255 

PAR E-mail Address gpra@ftc.gov 

PAR Fax Number 202-326-2329 

PAR Mailing Address Federal Trade Commission 

Atten PAR, M/D H-774 

600 Pennsylvania Avenue, NW 

Washington, DC 20580 

Regions 

East Central (Cleveland, OH) 216-263-3455 

Midwest (Chicago, IL) 312-960-5634 

Northeast (New York, NY) 212-607-2829 

Northwest (Seattle, WA) 206-220-6350 

Southeast (Atlanta, GA) 404-656-1390 

Southwest (Dallas, TX) 214-979-9350 

Western (San Francisco, CA) 415-848-5100 

Western (Los Angeles, CA) 310-824-4343 

Consumer Response Center 

General Complaints 1-877-FTC-HELP (1-877-382-4357) 

Identity Theft Complaints 1-877-ID-THEFT (1-877-438-4338) 

Online General Complaints www.ftc.gov/complaint 

Identity Theft Education and Complaints www.ftc.gov/idtheft 

National Do Not Call Registry www.donotcall.gov 

Acknowledgments 

The FTC gratefully acknowledges the work of James Baker, Darlene Cossette, Jill Dunham, Nancy Lux, Diane 

Reinertson, and Lori Walsh-Van Wey of the Financial Management Office; Jeanine Balbach and Stefano 

Sciolli of the Bureau of Competition; and Beth Arvan Wiggins, Daniel Kaufman, and Jonathan Soileau of the 

Bureau of Consumer Protection for contributing to the development of this report. Editorial and design work 

supported by AOC Solutions, Inc., and EEI Communications, Inc.

 Appendix B 131377