On this day in economic and financial history...
President Woodrow Wilson established the Federal Trade Commission on Sept. 26, 1914. The FTC was one of Wilson's major legislative achievements, and the agency has served as an enforcement arm against monopolistic and unfair business practices for nearly a century. It has played important roles in many notable antitrust cases, including:
United States v. Paramount Pictures (a subsidiary of Viacom
), decided in 1948: This broke up the vertically integrated Hollywood studio system, which had previously allowed studios to control the entire film production and distribution chain from script to theater. (Nasdaq: VIA)
- Federal Trade Commission v. Morton Salt, decided in 1948: This prevented companies from offering quantity discounts only to those customers with the greatest purchasing power.
Federal Trade Commission v. Procter & Gamble
, decided in 1967: This held that the consumer products giant's 1957 acquisition of Clorox violated antitrust laws, establishing the precedent that a potential competitor cannot acquire a smaller company with a dominant market share, regardless of its present participation in that market. (NYSE: PG)
United States v. Microsoft
, settled in 2001: This case resulted in little real change to Microsoft's business practices, but has generated intense debate for years afterward over the role of government oversight and antitrust regulation in the digital age. The FTC later filed suit against Intel (Nasdaq: MSFT) over its rebate practices, which resulted in a similar settlement. (Nasdaq: INTC)
The FTC is also responsible for enforcing truth-in-advertising regulations, the Do Not Call list, and product labeling standards, among other key tasks.
Political repercussions, here and abroad
The Dow Jones Industrial Average
Eisenhower would recover, and so would the Dow -- it gained 22% over the course of the entire year.
Britain and China agreed to transfer control of Hong Kong on Sept. 26, 1984. The colony was officially transferred to China in 1997, after more than 150 years of British control.
Hong Kong has played a vital role in linking mainland China with global financial markets. Two years after the transfer agreement was finalized, the Hong Kong Stock Exchange traded 249 companies that had a combined market cap of $32 billion. Today 1,533 companies trade on the exchange, with a combined market cap of $2.4 trillion. It is the sixth-largest exchange in the world, narrowly edging China's own Shanghai Stock Exchange.
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