Fiscal Year 2010 Performance and Accountability Report The Federal Trade Commission’s (FTC) Fiscal Year (FY) 2010 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. Federal Trade Commission FTC _c86ff34b-c8f9-4e38-b66a-d31eec3022fe 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. 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 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. Jon Leibowitz Jon Leibowitz was designated to serve as chairman of the FTC on March 2, 2009, by President Barack H. Obama. Leibowitz was previously sworn in as a commissioner on September 3, 2004, following his nomination by the President and confirmation by the U.S. Senate. Chairman The President chooses one Commissioner to act as chairman. Performer Commissioners At the end of the fiscal year, the Commissioners were Julie Brill, William E. Kovacic, Edith Ramirez, and J. Thomas Rosch. Commissioner No more than three commissioners can be from the same political party. Performer Bureau of Consumer Protection Performer Bureau of Competition Performer Bureau of Economics Performer Office of General Counsel Performer Office of inspector General Performer Office of International Affairs Performer Office of the Executive Director Performer Regions Seven regions Performer A U.S. economy characterized by vigorous competition among producers and consumer access to accurate information, yielding high-quality products at low prices and rewarding efficiency, innovation, and consumer choice. _754a2461-2bc8-4fc2-9145-7e84e9b0a8b4 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. _c4f5f849-9296-44c9-925d-d97d5f26e8c1 Protect Consumers Prevent fraud, deception, and unfair business practices in the marketplace _cb465946-2f85-48ad-93ba-8369445ffae7 1 Gross Costs: $158 Less earned revenue: (14) Net Costs: $144 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 five related objectives to achieve this over a wide range of consumer protection issues. Fraud, Deception, and Unfair Practices Identify fraud, deception, and unfair practices that cause the greatest consumer injury _40813ae4-037a-4650-a722-0df2a01b36fd 1.1 The FTC identifies practices that cause consumer injury by analyzing the consumer complaint data collected in its consumer sentinel network 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, increase compliance with its consumer protection statutes and rules, and return funds to harmed consumers. Performance Measure 1.1.1 Complaints and inquiries collected and entered into the Consumer Sentinel Network database. Complaints and Inquiries 1.0 million 1000000 2005-10-01 2006-09-30 1.0 million 1000000 2006-10-01 2007-09-30 1.8 million 1800000 2007-10-01 2008-09-30 1.8 million 1800000 2008-10-01 2009-09-30 2.5 million 2500000 2009-10-01 2010-09-30 2.6 million 2600000 2010-10-01 2011-09-30 2.7 million 2700000 2011-10-01 2012-09-30 1.0 million 1000000 2005-10-01 2006-09-30 1.1 million 1100000 2006-10-01 2007-09-30 3.1 million 3100000 2007-10-01 2008-09-30 3.3 million 3300000 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the FTC added 3.1 million entries into its database, 123% of the target of 2.5 million. Since FY 2008, the total has included consumer complaints alleging DNC violations. Due to the extent by which the FTC exceeded this target in FYs 2008 and 2009, the agency reevaluated the target in the 2009 update of the FTC Strategic Plan, significantly increasing the target for FY 2010 and further increasing it for each of the next four years. Data Source: The FTC’s Consumer Sentinel Network database. 3100000 2009-10-01 2010-09-30 Key Measure 1.1.2 FTC’s consumer protection law enforcement actions that target the subject of consumer complaints to the FTC. Percentage n/a 2005-10-01 2006-09-30 50.0% 50 2006-10-01 2007-09-30 65.0% 65 2007-10-01 2008-09-30 65.0% 65 2008-10-01 2009-09-30 65.0% of actions 65 2009-10-01 2010-09-30 65% 65 2010-10-01 2011-09-30 65% 65 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 76.0% 76 2006-10-01 2007-09-30 71.0% 71 2007-10-01 2008-09-30 79.0% 79 2008-10-01 2009-09-30 Target exceeded. In FY 2010, 95.9%, or 47 of 49, of the agency’s actions targeted the subject of consumer complaints to the FTC. Because the agency augments identification of targets from its databases with other strategies for generating enforcement leads—such as ad monitoring, Internet surfs, and direct referrals from government and private sector partners—the agency has not increased the target for this measure. Data Source: The FTC’s Consumer Sentinel Network database. 95.9 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS At the request of the FTC, a U.S. district court in August 2010 ordered Central Coast Nutraceuticals, Inc., marketers of acai berry supplements, “colon cleansers,” and other products, to temporarily halt an Internet sales scheme that allegedly scammed consumers out of $30 million or more in 2009 alone through deceptive advertising and unfair billing practices. Since 2007, victimized consumers have flooded the FTC and other law enforcement agencies, and the Better Business Bureau, with more than 2,800 complaints about the company. Acai berry supplements, derived from acai palm trees that are native to Central and South America, have become popular in recent years. Last year, the Better Business Bureau named fake “free” trial offers—including those for acai supplements offered by the defendants in this case— as one of the “Top 10 Scams and Rip Offs of 2009.” Performance Measure 1.1.3 The rate of customer satisfaction with the FTC’s Consumer Response Center. n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target: (A) For the website, exceed average citizen satisfaction rate as published in the American Customer Satisfaction Index E-Government Satisfaction Index (B) For the call center, meet or exceed standards for call centers developed by the Citizen Service Levels Interagency Committee 2009-10-01 2010-09-30 See (A) and (B) 2010-10-01 2011-09-30 See (A) and (B) 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 (A) Exceeded (B) Met In FY 2010, the average citizen satisfaction score for participating federal government websites was 74, and the score for the FTC’s website was 75. The standard for call centers was 76, and the FTC’s score was 76. Data Source: Reports from the U.S. Department of the Interior’s Federal Consulting Group, the executive agent for the American Customer Satisfaction Index, which is produced by the University of Michigan in partnership with the American Society for Quality, ForeSee Results and the CFI Group. 2009-10-01 2010-09-30 Law Enforcement Stop fraud, deception, unfairness, and other unlawful practices through law enforcement _675074da-978f-45ab-b8f4-47c4f14c97d0 1.2 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, increase compliance with its consumer protection statutes and rules, and return funds to harmed consumers. Key Measure 1.2.1 All cases filed by the FTC that were successfully resolved through litigation, a settlement, or issuance of a default judgment. Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 75.0–85.0% of cases 85 2009-10-01 2010-09-30 75.0–85.0% 85 2010-10-01 2011-09-30 75.0–85.0% 85 2011-10-01 2012-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. Of the 130 cases resolved in FY 2010, 129 were successfully resolved and one case was dismissed. At the end of FY 2010, an additional 78 cases had not been resolved, and remained in litigation. While the agency significantly exceeded the target, the target will not be increased. Setting the target too high could have the effect of discouraging the filing of large, difficult, or precedent-setting cases when appropriate, including cases that raise challenging legal and factual issues. Data Source: LexisNexis CourtLink, the Public Access to Court Electronic Records service, the FTC website, and agency, bureau, division, and regional office reports. 99.2 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS Two Countrywide mortgage servicing companies in May 2010 agreed to pay $108 million to settle FTC charges that they collected excessive fees from cash-strapped borrowers who were struggling to keep their homes. The $108 million represents one of the largest judgments imposed in an FTC case, and the largest mortgage servicing case. It will be used to reimburse overcharged homeowners whose loans were serviced by Countrywide before it was acquired by Bank of America in July 2008. According to the complaint filed by the FTC, Countrywide’s loan-servicing operation deceived homeowners who were behind on their mortgage payments into paying inflated fees—fees that could add up to hundreds or even thousands of dollars. Many of the homeowners had taken out loans originated or funded by Countrywide’s lending arm, including subprime or “nontraditional” mortgages, such as payment option adjustable rate mortgages, interest-only mortgages, and loans made with little or no income or asset documentation, the complaint states. Performance Measure 1.2.2 The FTC’s effectiveness in stopping prohibited business practices in three high priority areas over the next five years. n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Statistically significant decrease in the prevalence of the practice. 2009-10-01 2010-09-30 Statistically significant decrease in the prevalence of the practice. 2010-10-01 2011-09-30 Statistically significant decrease in the prevalence of the practice. 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Not available. Stopping deceptive “green” marketing claims is one of the FTC’s highest priorities, and the first study, addressing bamboo textiles claims, is currently underway. In order to establish a baseline, the FTC identified more than 500 websites marketing bamboo textiles, and from that group developed a representative sample of 70 websites. After charging four sellers of clothing and other textile products with making false claims, the agency re-captured the sample and analyzed the marketing claims. The FTC then sent 78 publically announced letters to companies nationwide, warning that they may be breaking the law. The sample was then captured a third time, and it is currently being analyzed. The final results of the study will be collected and reported in FY 2011. Data Source: Evaluations of the prevalence of prohibited business practices in the targeted areas. 2009-10-01 2010-09-30 Performance Measure 1.2.3 Rredress cases in which the FTC distributes redress dollars designated for distribution to consumers within six months. Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 90.0% of cases 90 2009-10-01 2010-09-30 90.0% 90 2010-10-01 2011-09-30 90.0% 90 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. In FY 2010, in 24 of 25 cases, or 96%, the FTC distributed redress dollars designated for distribution to consumers within six months. Data Source: Bureau open redress case status reports. 96 2009-10-01 2010-09-30 Performance Measure 1.2.4 Investigations or cases in which the FTC obtains foreign-based evidence or engages in mutual assistance that contributes to FTC law enforcement actions, or in which we cooperate with foreign agencies and/or multilateral organizations. Investigations or Cases n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 30 investigations or cases 30 2009-10-01 2010-09-30 30 investigations or cases 30 30 investigations or cases 30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. The agency will continue to monitor the target of this new measure and will reassess it after additional performance cycles. Data Source: Information on the international activities of the FTC is produced by the agency’s Office of International Affairs. 39 2009-10-01 2010-09-30 Consumer Education Prevent consumer injury through education _2111ed8c-6aad-48a5-bb3a-566eabed193a 1.3 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. An educated consumer and business community is a first line of defense against fraud and deception. Our Strategy: Consumer and business education serves as the first line of defense against fraud, deception, and unfair practices. Most of the FTC’s law enforcement initiatives include a consumer and/or business education component aimed at preventing consumer injury and unlawful business practices, and mitigating financial losses. from time to time, the agency conducts preemptive consumer and business education campaigns to raise awareness of new or emerging marketplace issues that have the potential to cause harm. The agency creatively uses new technologies and private and public partnerships to reach new and under-served audiences, particularly those who may not seek information directly from the FTC. The FTC will continue to publicize its consumer complaint and identity theft website addresses and toll-free numbers in an ongoing effort to increase public awareness of its activities and inform the public of the ways to contact Performance Measure 1.3.1 Consumer protection messages accessed online or in print. Messages 25 million 25000000 2005-10-01 2006-09-30 45 million 45000000 2006-10-01 2007-09-30 50 million 50000000 2007-10-01 2008-09-30 55 million 55000000 2008-10-01 2009-09-30 50 million 50000000 2009-10-01 2010-09-30 50 million 50000000 2010-10-01 2011-09-30 50 million 50000000 2011-10-01 2012-09-30 53 million 53000000 2005-10-01 2006-09-30 47 million 47000000 2006-10-01 2007-09-30 49.2 million 49200000 2007-10-01 2008-09-30 43.1 million 43100000 2008-10-01 2009-09-30 Target Not Met. In FY 2010, the FTC accomplished roughly 88% of its target of 50 million messages. Of the more than 43.9 million consumer protection messages accessed, more than 26.4 million were accessed online and nearly 17.5 million were print publications distributed by the FTC. While the number of print publications distributed remained relatively static over the last decade, as more consumers and businesses went online, the number of publications accessed through the Internet soared before leveling off within the past few years. Also, the results underestimate the FTC’s impact. The agency’s partners are increasingly opting to post the FTC’s information on their own websites, and the agency has also increasingly taken advantage of the outreach potential of the “blogosphere.” The FTC is unable to measure the number of its consumer protection messages accessed on partner websites or blogs. Data Source: The agency’s web statistics software (for messages accessed online) and the FTC publication inventory (for messages accessed in print). 43900000 2009-10-01 2010-09-30 Key Measure 1.3.2 Customer satisfaction with an FTC consumer education website or microsite. Satisfaction Rate n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Exceed average citizen satisfaction rate as published in the American Customer Satisfaction Index E-Government Satisfaction Index. 2009-10-01 2010-09-30 Exceed average citizen satisfaction rate as published in the American Customer Satisfaction Index E-Government Satisfaction Index 2010-10-01 2011-09-30 Exceed average citizen satisfaction rate as published in the American Customer Satisfaction Index E-Government Satisfaction Index 2011-10-01 3012-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Exceeded. Target Met. In FY 2010, the FTC evaluated OnGuardOnline. gov, a joint effort of the federal government and the technology industry, created, maintained, and marketed by the FTC to help computer users guard against Internet fraud, secure their computers, and protect their personal information. The average citizen satisfaction score for participating federal government websites was 74, and the score for OnGuardOnline.gov was 77. Data Source: Reports from the U.S. Department of the Interior’s Federal Consulting Group, the executive agent for the American Customer Satisfaction Index, which is produced by the University of Michigan in partnership with the American Society for Quality, ForeSee Results and the CFI Group. 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS The FTC used the American Customer Satisfaction Index to measure how satisfied visitors to OnGuardOnline.gov are. Over 100 federal agencies use this survey to measure customer satisfaction. In FY 2010, the FTC collected 3,721 completed surveys for OnGuardOnline.gov, which maintained an overall customer satisfaction score of 77, above the benchmark score of 74 for government websites. The survey also allows the FTC to measure key website elements such as navigation, site information, look and feel, site performance and functionality. The OnGuardOnline.gov score for each of these elements was above the national benchmark for satisfaction. In addition, when visitors were asked whether they were able to do what they wanted on the site, 73 percent said yes and another 18 percent said partially, a strong indication that the site is an effective and helpful tool for consumers. Performance Measure 1.3.3 Organizations requesting consumer education publications. Organizations n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 11,000 organizations 11000 2009-10-01 2010-09-30 11,300 organizations 11300 2010-10-01 2011-09-30 11,600 organizations 11600 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the FTC accomplished almost 140% of its target of 11,000 organizations. While the target increases over the next four years, the agency will continue to monitor performance and reassess targets as needed. Data Source: The agency’s online order system database. 15372 2009-10-01 2010-09-30 Research, Reports, Advocacy, and International Cooperation Enhance consumer welfare through research, reports, advocacy, and international cooperation and exchange _c7286a3d-9e10-48ab-8092-317523bc5fbb 1.4 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. Research, reports, advocacy, rulemaking and advocacy complement law enforcement and education to enhance the welfare of consumers. Our Strategy: The FTC uses a variety of strategies in addition to law enforcement and education to enhance consumer protection. The agency convenes and co-sponsors 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 analyze consumer protection problems and provide recommendations to address them. 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 testifies before congress on consumer protection issues. The FTC also files amicus briefs to aid courts’ considerations of consumer protection issues. Performance Results: Public policy that enhances consumer protection is based on a thorough understanding of complex issues, which arises from dialogue, study, and empirical research. such policy also appreciates that stakeholders other than government, such as industry associations or private standard-setting organizations, are at times better placed to address certain consumer protection issues. The four performance measures that the agency uses to gauge success of this objective help ensure that the agency augments its enforcement and education efforts by encouraging discussions among all interested parties, through careful study of and empirical research on novel or challenging consumer protection problems, by urging adoption of policies and legal principles that promote consumers’ interest, and by conducting rulemaking as appropriate. These activities help guide the FTC’s consumer protection policy decisions, as well as those of other state, federal, and international policymakers. Performance Measure 1.4.1 Workshops and conferences convened or cosponsored that address consumer protection problems. Workshops and Conferences n/a 2005-10-01 2006-09-30 6 2006-10-01 2007-09-30 6 2007-10-01 2008-09-30 6 2008-10-01 2009-09-30 6 2009-10-01 2010-09-30 6 2010-10-01 2011-09-30 6 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 10 2006-10-01 2007-09-30 16 2007-10-01 2008-09-30 9 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the FTC exceeded its target and convened or cosponsored 11 workshops and conferences that address consumer protection problems. Due to the extent by which the FTC exceeded this target in FY 2010 and prior years, the agency reevaluated the target and plans to update the performance plan, significantly increasing the target for FY 2011 and the following three years. Data Source: The FTC website and agency, bureau, division, and regional office reports. 11 2009-10-01 2010-09-30 Performance Measure 1.4.2 Advocacy comments and amicus briefs on consumer protection issues filed with entities including federal and state legislatures, agencies, Comments and Briefs n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 6 comments and briefs 6 2009-10-01 2010-09-30 6 2010-10-01 2011-09-30 6 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target Met. In FY 2010, the FTC filed advocacy comments on consumer protection issues such as cyber security, privacy and innovation in the Internet economy, the empowerment of parents and protection of children on the Internet, reverse mortgage products, disclosure for communication services, and the Medicare Advantage and Medicare prescription drug benefit programs. The agency will continue to monitor the target of this new measure and will reassess it after additional performance cycles. Data Source: Internal matter records of advocacy comments and amicus briefs filed. 6 2009-10-01 2010-09-30 Performance Measure 1.4.3 Respondents finding the FTC’s advocacy comments and amicus briefs “useful.” Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 50.0% of respondents 50 2009-10-01 2010-09-30 50 2010-10-01 2011-09-30 50 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. The FTC mails advocacy recipients a survey designed to gauge the usefulness of agency advocacy comments and amicus briefs. “Usefulness” is assessed by the recipient. The target percentage recognizes that comments critiquing a recipient’s proposed action may not be assessed positively. In FY 2010, 2 of 2 survey responses classified the FTC’s submissions as useful. The agency will continue to monitor the target of this new measure and will reassess it after additional performance cycles. Data Source: A formal written survey distributed to advocacy recipients. 100 2009-10-01 2010-09-30 Key Measure 1.4.4 Proposed Administrative Procedure Act (APA) rulemakings, conducted solely by the FTC, completed within nine months of receipt of final comments in the Final Notice of Proposed Rulemaking. Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 75.0% of rulemakings 75 2009-10-01 2010-09-30 75 2010-10-01 2011-09-30 75 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. Of the three rulemakings completed in FY 2010, all were completed within nine months of receipt of final comments in the Final Notice of Proposed Rulemaking. Rulemakings are considered completed on the dates the Commission votes on the rules. The agency will continue to monitor the target of this new measure and will reassess it after additional performance cycles. Data Source: The Federal Register and the FTC website. 100 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS In February 2010, the FTC completed amendments to the Free Credit Report Rule to prevent deceptive marketing of “free credit reports,” pursuant to the Credit CARD Act of 2009. The amended rule requires prominent disclosures for “free credit report” advertising in order to prevent consumers from confusing these so-called “free” offers with the federally mandated free annual credit reports. Global Marketplace Protect American consumers in the global marketplace by providing sound policy and technical input to foreign governments and international organizations to promote sound consumer policy 1.5 The FTC works around the globe to address new and emerging consumer protection and privacy challenges and concerns with a broad-based international program that strives to develop a consumer-friendly global marketplace. a myriad of issues—spam, phishing, spyware, telemarketing fraud, identity theft, data security, and privacy—cross national borders. The resulting challenges require the FTC to cooperate with counterparts in foreign agencies and international organizations. Our Strategy: To achieve this objective, the FTC pursues the development of an international consumer protection model that focuses on protecting consumers while maximizing economic benefit and consumer choice. The agency also focuses on understanding cutting-edge issues in technology and globalization that present challenges to American consumer interests. The agency influences policy development and implementation by advising multilateral organizations, regional entities, and foreign government agencies through substantive consultations and written comments. and finally, the FTC provides technical assistance to newer consumer protection agencies to enhance their ability to apply sound consumer protection policies. Performance Results: The FTC uses two measures to assess the performance of this objective. Key Measure 1.5.1 and Performance Measure 1.5.2 address the scope of agency contact with international counterparts and help determine if agency efforts are sufficiently broad-based. Key Measure 1.5.1 Policy advice provided to foreign consumer protection and privacy agencies, directly and through international organizations, through substantive consultations, written submissions, or comments. Policy Inputs n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 40 policy inputs 40 2009-10-01 2010-09-30 40 2010-10-01 2011-09-30 40 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the FTC provided policy advice in 64 instances, through consultations, written submissions, or comments. Enhanced engagement with new and developing foreign consumer protection and privacy agencies, as well as participation in additional international organizations that are now working on consumer protection and privacy issues, has resulted in an increased demand for the FTC’s policy advice. The agency will continue to monitor the target of this new measure and will reassess it after additional performance cycles. Data Source: Information on the international activities of the FTC is produced by the agency’s Office of International Affairs. 64 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS The FTC participated actively in international policy consultations on consumer protection and privacy issues directly with other countries and the European Union, and in multilateral organizations such as the Organization for Economic Co-operation and Development (OECD), Asia Pacific Economic Cooperation, the Internet Corporation of Assigned Names and Numbers, the International Conference of Data Protection and Privacy Commissioners, the Organization of American States, and the United National Commission on International Trade Law. The FTC also hosted a major conference on protecting and empowering consumers in electronic commerce, which drew more than 250 government officials, business leaders, consumer advocates, and academics from around the world to discuss how to advance OECD work in this area in light of technological and marketplace developments. Performance Measure 1.5.2 Technical assistance to foreign consumer protection and privacy authorities Missions or Fellows n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 8 technical assistance missions or international Fellows hosted 8 2009-10-01 2010-09-30 8 2010-10-01 2011-09-30 8 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the FTC conducted 21 technical assistance missions and hosted 2 international fellows. The FTC received funding from the U.S. Agency for International Development to conduct consumer protection technical assistance missions in Central America, the Dominican Republic, Peru, and Colombia. Fifteen of the technical assistance missions and one international fellow were funded by the U.S. Agency for International Development. The agency will continue to monitor the target of this new measure and will reassess it after additional performance cycles. Data Source: Office of International Affairs technical assistance calendar. 23 2009-10-01 2010-09-30 Resources 1.1 Staffing Full-Time Equivalents 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 548 2005-10-01 2006-09-30 570 2006-10-01 2007-09-30 591 2007-10-01 2008-09-30 597 2008-10-01 2009-09-30 621 2009-10-01 2010-09-30 Resources 1.2 Obligations Dollars in Millions 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 116 2005-10-01 2006-09-30 126 2006-10-01 2007-09-30 140 2007-10-01 2008-09-30 152 2008-10-01 2009-09-30 168 2009-10-01 2010-09-30 Resources 1.3 Net Cost Dollars in Millions 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 98 2005-10-01 2006-09-30 105 2006-10-01 2007-09-30 124 2007-10-01 2008-09-30 131 2008-10-01 2009-09-30 144 2009-10-01 2010-09-30 Maintain Competition Prevent anticompetitive mergers and other anticompetitive business practices in the marketplace _a33e1bf3-65de-4151-94f8-c7e875d75bb6 2 Gross Costs: $117 Less earned revenue: (74) Net Costs: $43 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. Anticompetitive Mergers and Practices Identify anticompetitive mergers and practices that cause the greatest consumer injury</Description> _55021a44-fa54-4c40-a705-d601c941d5ef 2.1 Taking action against anticompetitive mergers and anticompetitive business conduct is the first step in effective antitrust enforcement. our strategy The FTC seeks to identify and take action against 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 harm, or are likely to harm, consumers. at the same time, the agency seeks to avoid taking actions that prevent 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 each inquiry in a way that minimizes the cost or inconvenience to businesses, while still enabling the agency to gather sufficient information to support each enforcement decision. Given the agency’s limited resources, 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 health care, pharmaceuticals, energy, real estate, and technology. MERGER ACTIVITIES. The premerger notification requirements of the Hart-Scott-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 HSR Act requires companies to report certain proposed mergers to the FTC and DoJ, which jointly enforce the HSR Act, and wait for a specified period (usually 30 days) to allow for antitrust review. FTC staff examines 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. in other cases, a formal request for additional information may be issued by the FTC. This is referred to as a “second request.” Because the parties may consummate a transaction after substantially complying with the second request and waiting for a short time period (usually 30 days), a second request investigation typically requires a significant investment of resources by the FTC. The agency must act quickly to gather and review information to make a decision on whether to pursue enforcement action to block a merger within the timeframe set out by the HSR Act and rules. 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 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 federal court injunctions preventing these transactions. 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. 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. Whereas the vast majority of potentially problematic mergers continue to be subject to the revised HSR filing requirements, 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. In FT 2010 the agency successfully challenged four such transactions. This effort involves monitoring 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 attorneys to notify the FTC of possible anticompetitive mergers. NONMERGER ACTIVITIES. in the nonmerger area, agency staff reviews complaints received from consumers, businesses, congressional offices, and elsewhere to identify potentially anticompetitive nonmerger business practices. in addition, the FTC has pursued a “positive agenda” of planned initiatives; that is, the agency has taken a systematic and proactive approach to identify specific conduct likely to pose the greatest threat to consumer welfare. The focus continues to be on the types of practices, such as agreements among competitors, which are most likely to harm consumers. in deploying its scarce enforcement resources, the agency focuses on sectors of the economy, such as health care, energy, real estate, or high technology, that have 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. in nonmerger matters, the FTC seeks to take action against 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 “cease and desist” from anticompetitive 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 and sophisticated legal and economic analysis are of critical importance to ensure accurate assessment of the potential for competitive harm resulting from the transaction or conduct in question and, if necessary, demonstrate 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 prevails in litigation or secures a consent order to restore competition 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. The commission issues complaints when, based on the findings of staff investigations, it has “reason to believe” a merger or conduct is anticompetitive. 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. 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 and businesses by bringing cases to clarify, or improve upon, existing precedent. Performance Results: The key performance measure under this objective relates to actions taken in a significant percentage of substantial merger and nonmerger investigations. This translates into obtaining a positive result (i.e., litigated victories, consent orders, or abandoned transactions) in 40 to 60 percent of investigations that involved a second request or compulsory process, in the case of merger investigations, or which involved at least 150 hours of investigative effort, in the case of nonmerge investigations. Success on this key outcome measure indicates that the FTC is effectively screening HSR reported merger and nonmerger investigations to identify those that raise 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. This measure evaluates appropriate investigation, case selection, and resolution, as well as the crafting of sufficient and effective remedies. The target range of 40 to 60 percent set for key Performance Measure 2.1.1 reflects the reality that the FTC conducts substantial merger and nonmerger investigations when it believes that a merger or conduct may be anticompetitive, but that not all such investigations should lead to an enforcement action or a positive result. indeed, the existence of a minimum and maximum value recognizes the possibility that the FTC may find itself under- or over-enforcing the competition laws, while the magnitude of the spread between these two values serves to identify a band within which the agency’s performance can be reasonably expected to vary. from this perspective, setting the range at too high a level could be detrimental if the effect were to deter the agency from bringing important, but risky, cases, while setting the range at too low a level could be detrimental as well, if the effect were to incentivize the agency to bring marginal cases. of the remaining measures under this objective, six relate directly to Performance Measure 2.1.1 in that they measure the impact of the agency’s actions, in terms of the magnitude of the affected markets and the associated consumer benefits, as well as the efficiency with which these same actions were undertaken. Whereas the consumer savings measures are designed to assess the ultimate outcome, or impact, of the FTC’s actions in protecting consumers and promoting vigorous competition, by quantifying the impact of the FTC’s enforcement actions on consumer welfare, the volume of commerce measures are intended to give an indication of the economic significance of the relevant product markets. for both merger and nonmerger actions, the FTC measures the volume of commerce and estimates consumer savings in markets in which it obtains a positive result as an indicator of the scope of the FTC’s antitrust enforcement activities. external factors, such as level of merger activity, and internal ones, such as the duration of nonmerger investigations, may cause these results to fluctuate significantly from year to year. consequently, the two volume-of-commerce targets (Performance Measures 2.1.3 and 2.1.6) and the two consumer savings targets (Performance Measures 2.1.2 and 2.1.5) are assessed each year by calculating the average of current year plus the previous four years. in addition to measuring consumer savings in absolute terms, the agency uses 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 2.1.4 and 2.1.7). The final measure under this objective addresses the international dimension of the agency’s law enforcement efforts by tracking the percentage of cases in which the FTC had at least one substantive contact with a foreign antitrust authority in which the agencies followed consistent analytical approaches and reached compatible outcomes. Key Measure 2.1.1 Actions to maintain competition, including litigated victories, consent orders, abandoned transaction remedies, restructured transaction remedies, or fix-it-first transaction remedies in a significant percentage of substantial merger and nonmerger investigations. Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 40.0–60.0% of substantial investigations 60 2009-10-01 2010-09-30 40.0–60.0% 60 2010-10-01 2011-09-30 40.0–60.0% 60 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target Not Met. The agency took action to maintain competition in 22 of the 57 substantial merger and nonmerger investigations that were closed in FY 2010. These 22 actions consist of 17 consents, three merger transactions that were withdrawn as a consequence of the antitrust concerns raised during the investigation, and two additional consents that were successfully negotiated after the Commission issued an administrative complaint. This corresponds to 16 merger matters and six nonmerger matters. Of the 35 substantial investigations that were closed without an action, 22 involved a nonmerger matter and 13 a merger matter. Though the agency did not meet the target in FY 2010, it should be noted that the result obtained was within one percentage point of the target and that, in addition to the actions listed above, the Commission also obtained a consent in five merger investigations that are excluded from this measure since they did not involve the use of compulsory process. Furthermore, during FY 2010, the Commission issued an administrative complaint to challenge allegedly harmful conduct by a state dental board. However, since this matter is still pending before the Administrative Law Judge and has not reached a resolution it is excluded from this measure, even though it represents a significant investment of agency resources. Data Source: Information to identify “actions to maintain competition” is obtained from press releases, various agency and Bureau databases, and internal communications. Press releases are the source of information for public actions, such as consent orders and the results of judicial review, while internal databases are used to identify those matters that were closed without an action being taken and to determine if an investigation meets the substantiality criteria (i.e., if a second request was issued or whether compulsory process was authorized for merger investigations, and the number of hours that staff logged to a particular investigation for nonmerger investigations). 39 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS The FTC obtained a positive result in 22 of the 57 significant merger and nonmerger investigations it concluded during FY 2010. On the merger side this includes successful second request or compulsory process investigations in matters involving crucial pharmaceuticals (Watson Pharmaceuticals / Arrow Group, Merck / Schering-Plough, and Nestle / Novartis), high tech devices used in the medical industry (Danaher Corp / MDS) and in scientific and industrial applications (Varian, Inc. / Agilent, Inc and Panasonic / Sanyo), funeral services (SCI / Palm Mortuary and SCI / Keystone North America), and diesel refueling network centers (Flying J / Big West Oil). On the nonmerger side the FTC obtained considerable consumer relief in a number of matters involving computer micro chips (Intel Corporation*), health care providers (Roaring Fork Valley Physicians, IPA, Inc. and Minnesota Rural Health Cooperatives) and truck rental services (Amerco / Avis Budget Group). Performance Measure 2.1.2 Consumer savings of at least $500 million through merger actions to maintain competition. Dollars in Millions n/a 2005-10-01 2006-09-30 500 2006-10-01 2007-09-30 500 2007-10-01 2008-09-30 500 2008-10-01 2009-09-30 500 2009-10-01 2010-09-30 $500.0 million 500 2010-10-01 2011-09-30 500 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 805 2006-10-01 2007-09-30 360 2007-10-01 2008-09-30 791 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the FTC exceeded the target, saving consumers an estimated $586 million, as calculated using the average consumer savings for the current fiscal year and the previous three years. This result is in large part determined by the presence of several enforcement actions over the last three years in the pharmaceutical industry, which involved significantly sized relevant product markets. The FTC will continue to monitor and reassess the target moving forward. Data Source: Estimates of consumer savings associated with merger actions are prepared by the lead attorney responsible for an individual investigation, and subsequently subject to 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. 586 2009-10-01 2010-09-30 Performance Measure 2.1.3 Actions against mergers likely to harm competition in markets with a total of at least $25 billion in sales. Dollars in Billions 40 2005-10-01 2006-09-30 25 2006-10-01 2007-09-30 25 2007-10-01 2008-09-30 25 2008-10-01 2009-09-30 $25.0 billion 25 2009-10-01 2010-09-30 25 2010-10-01 2011-09-30 25 2011-10-01 2012-09-30 13.4 2005-10-01 2006-09-30 42.6 2006-10-01 2007-09-30 14.9 2007-10-01 2008-09-30 22.3 2008-10-01 2009-09-30 Target Not Met. The FTC’s positive merger results affected markets in which the total estimated volume of commerce was approximately $22.5 billion, or 90% of the annual target, as calculated using the average of the current fiscal volume of commerce year and the previous four years. During FY 2010, the FTC obtained positive results in 16 merger matters, resulting in 13 consent agreements, one of which was negotiated after the Commission issued an administrative complaint, and three transactions that were abandoned based on the antitrust concerns raised by staff during the course of the investigation. 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 all 13 consent agreements stipulated in FY 2010, the parties agreed to divest certain crucial assets to resolve the competitive concerns raised by the Commission. Although the agency did not meet the target in FY 2010, as in the case of Performance Measure 2.1.1, it should be noted that there were five additional merger investigations, which were resolved with a consent, but are excluded from this measure because they did not involve the use of compulsory process. Data Source: Estimates of the volume of commerce associated with merger actions are prepared by the lead attorney responsible for an individual investigation, and subsequently subject to review by staff economists. The estimate is generated using the volume of commerce for the affected markets using public sources and confidential data submitted by the parties during the course of the investigations. 22.5 2009-10-01 2010-09-30 Performance Measure 2.1.4 Consumer savings of at least six times the amount of FTC resources allocated to merger program. (efficiency measure) Percentage n/a 2005-10-01 2006-09-30 600 2006-10-01 2007-09-30 600 2007-10-01 2008-09-30 600 2008-10-01 2009-09-30 600.0% 600 2009-10-01 2010-09-30 600 2010-10-01 2011-09-30 600 2011-10-01 2012-09-30 2005-10-01 2006-09-30 2500 2006-10-01 2007-09-30 1121 2007-10-01 2008-09-30 2132 2008-10-01 2009-09-30 Target exceeded. During FY 2010, the agency saved consumers approximately 16 times the amount of resources devoted to the merger program, as calculated using the average consumer savings obtained under Performance Measure 2.1.2 ($586 million) divided into the amount of resources used in the current fiscal year. This result is in large part determined by the presence of several enforcement actions over the last three years in the pharmaceutical industry, which involved significantly sized relevant product markets. The FTC will continue to monitor and reassess the target moving forward. Data Source: The ratio of consumer savings in merger actions to the amount of resources allocated to the merger program is calculated using data on consumer savings obtained under Performance Measure 2.1.2, divided into the amount of monetary resources expended on the merger program as reported by the FTC’s Financial Management Office. 1670 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS During FY 2010, the agency saved consumers approximately 16 times the amount of resources devoted to the merger program, as calculated using the average consumer savings obtained under Performance Measure 2.1.2 ($586 million) divided into the amount of resources used on the merger program. This result is largely attributable to consumer savings that exceeded target due to the presence of several enforcement actions over the last three years in the pharmaceutical industry, which involved significantly sized relevant product markets. Performance Measure 2.1.5 Consumer savings of at least $80 million through nonmerger actions taken to maintain competition. Million Dollars n/a 2005-10-01 2006-09-30 80 2006-10-01 2007-09-30 80 2007-10-01 2008-09-30 80 2008-10-01 2009-09-30 $80.0 million 80 2009-10-01 2010-09-30 80 2010-10-01 2011-09-30 80 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 75 2006-10-01 2007-09-30 28 2007-10-01 2008-09-30 109 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the FTC obtained estimated savings to consumers of approximately $508 million, as calculated using the average consumer savings of the current fiscal year and the previous three years. The reason that the agency has exceeded the target by such a margin is in large part attributable to one particular case, which involved Intel Corporation*, the world’s leading computer chip maker, who was charged with illegally using its dominant market position for a decade to stifle competition and strengthen its monopoly. Data Source: Estimates of consumer savings associated with nonmerger actions are prepared by the lead attorney responsible for an individual investigation, and subsequently subject to 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 508 2009-10-01 2010-09-30 Performance Measure 2.1.6 Actions against anticompetitive conduct in markets with a total of at least $8 billion in annual sales. Billion Dollars 20 2005-10-01 2006-09-30 8 2006-10-01 2007-09-30 8 2007-10-01 2008-09-30 8 2008-10-01 2009-09-30 $8.0 billion 8 2009-10-01 2010-09-30 8 2010-10-01 2011-09-30 8 2011-10-01 2012-09-30 1.4 2005-10-01 2006-09-30 2.6 2006-10-01 2007-09-30 0.4 2007-10-01 2008-09-30 14.6 2008-10-01 2009-09-30 Target exceeded. The FTC’s positive nonmerger results affected markets in which the total estimated volume of commerce was approximately $11.7 billion, almost 1.5 times the targeted amount, as calculated using the volume of commerce of the current fiscal year and the previous four years. During FY 2010, the FTC obtained positive results in six nonmerger matters, resulting in the same number of consents, one of which was negotiated after the Commission issued an administrative compliant. As mentioned under Performance Measure 2.1.5, the reason that the agency has exceeded the target by such a margin is in large part attributable to one particular case, which involved Intel Corporation, the world’s leading computer chip maker, who was charged with illegally using its dominant market position for a decade to stifle competition and strengthen its monopoly. Data Source: Estimates of the volume of commerce associated with nonmerger actions are prepared by the lead attorney responsible for an individual investigation, and subsequently subject to review by staff economists. The estimate is generated using the volume of commerce for the affected markets using public sources and confidential data submitted by the parties during the course of the investigations 11.7 2009-10-01 2010-09-30 2.1.7 Consumer savings of at least four times the amount of FTC resources allocated to nonmerger program over a five-year period. (efficiency measure) Percentage n/a 2005-10-01 2006-09-30 400 2006-10-01 2007-09-30 400 2007-10-01 2008-09-30 400 2008-10-01 2009-09-30 400.0% 400 2009-10-01 2010-09-30 400 2010-10-01 2011-09-30 400 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 424 2006-10-01 2007-09-30 164.0% 164 2007-10-01 2008-09-30 1,035.0% 1035 2008-10-01 2009-09-30 Target exceeded. During FY 2010 the agency saved consumers approximately 24 times the amount of resources it devoted to the nonmerger enforcement program. This is largely attributable to consumer savings that exceeded target due to one particular case involving Intel Corporation. The FTC will continue to monitor and reassess the target moving forward. 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 2.1.5, divided into the amount of monetary resources expended on the nonmerger program as reported by the FTC’s Financial Management Office 2418 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS During FY 2010 the agency saved consumers approximately 24 times the amount of resources it devoted to the nonmerger enforcement program, as calculated using the average consumer savings obtained under Performance Measure 2.1.5 ($508 million) divided into the amount of resources used on the nonmerger program. This result is largely attributable to consumer savings that exceeded target due to one particular case that involved Intel Corporation. Performance Measure 2.1.8 Cases in which the FTC had at least one substantive contact with a foreign antitrust authority in which the agencies followed consistent analytical approaches and reached compatible outcomes. Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 90.0% of cases 90 2009-10-01 2010-09-30 90 2010-10-01 2011-09-30 90 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the agency cooperated on over 25 cases with jurisdictions such as the European Union, Canada, Mexico, Japan, Australia, and the United Kingdom and obtained compatible outcomes in each case. While the agency will continue to strive for 100% success, the target reflects the possibility of inconsistent outcomes, particularly as new antitrust agencies come on line. However, at this time the FTC believes that the target remains appropriate. Data Source: Information on the international activities of the FTC is produced by the agency’s Office of International Affairs 100 2009-10-01 2010-09-30 Law Enforcement Stop anticompetitive mergers and business practices through law enforcement _4b64bfae-427c-4ca9-9740-adb62e29823c 2.2 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 increase business compliance, which helps prevent consumer injury, 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. in its complaints, “analyses to aid public comment,” and press releases, the agency explains the relevant facts and issues of cases in which it files complaints or obtains consent orders, so the nature of the competitive problems is clear. 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 take action to challenge similar transactions or conduct in the future. This information 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, speeches, hearings, and workshops (such as the series of workshops on the horizontal merger guidelines and intellectual property rights); advisory opinions (addressing, for example, the licensing requirements for limited service health care clinics); and reports (such as the reports on the ethanol market and on the savings lost to consumers through pay-for-delay agreements). as a complement to the FTC enforcement activity, the agency also advises, when asked, other federal and state government officials about the possible effects that various regulatory and legislative proposals may have 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, and 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, the FTC continues to publish reference and case-related documents. another way the FTC achieves this goal is to improve how topical information, case materials, 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. Performance Results: The FTC uses one measure to assess its performance in preventing consumer injury through education. The key measure (Performance Measure 2.2.1) tracks the volume of traffic on the FTC website on antitrust-related pages that are relevant to policymakers, the business and legal communities, and the public at large. This performance measure is an indicator of the flow of information provided to the public. successful outreach and education efforts, as reflected by this measure, will help consumers, because increased knowledge and understanding of the antitrust laws will help businesses stay in compliance. This measure 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 this measure would seem to 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. Key Measure 2.2.1 Competition resources accessed via the FTC’s website. Million Website Hits 10 2005-10-01 2006-09-30 15 2006-10-01 2007-09-30 15 2007-10-01 2008-09-30 15 2008-10-01 2009-09-30 10.0 million hits 10 2009-10-01 2010-09-30 10 2010-10-01 2011-09-30 10 2011-10-01 2012-09-30 10.6 2005-10-01 2006-09-30 15.7 2006-10-01 2007-09-30 12.5 2007-10-01 2008-09-30 11.9 2008-10-01 2009-09-30 Target exceeded. During FY 2010, the agency estimates that the hits on the FTC web site’s competition resources number 21.5 million, which exceeds the established target by over 100%. The target of 10 million was set by the agency in its last Strategic Plan, taking into account the new tracking software that the FTC uses to monitor web traffic on its web site and by extrapolating from information on traffic flows in recent years. Notwithstanding that the agency set the target at what it considered to be a reasonable level, the amount of traffic registered in FY 2010 has climbed to an extent that was not expected. This result may be attributable to recent developments in the technology of information dissemination and retrieval by web search agents and/or by unanticipated growth in the volume of overall web traffic. The agency will continue to monitor web traffic patterns to determine if the current web metric tools allow for a more discerning analysis and filtering of the raw traffic data and eventually to determine if the target should be adjusted. Data Source: The agency’s web statistics software. 21.5 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS The FTC continued to develop competition related content to better serve the interest of its stakeholders, whether they are individual consumers, affected businesses, researchers, or practitioners and policy makers. During FY 2010, the FTC’s online competition resources registered 21.5 million hits from external sources. These resources include pages that relate to individual investigations (such as complaints, orders, comments, and press releases), policy and research oriented content (such as reports, policy guides and fact sheets, workshop or conference web pages, the online competition enforcement database, advocacy filings, and amicus briefs), and business and consumer education material. Consumer Education Prevent consumer injury through education _de8d5aea-6158-4514-9041-a6dc017270b0 2.3 As a complement to its activities aimed at preventing consumer injury through education, the FTC provides substantial information to the business community, policymakers, 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 goal 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. and finally, 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 FTC also files amicus briefs to aid courts’ considerations of consumer protection issues Performance Results: The key measures used to gauge the FTC’s success under this objective are the ones relating to conducting public hearings, conferences, and workshops (Performance Measure 2.3.1), issuing reports and studies on competition related issues (Performance Measure 2.3.2), and making advocacy filings (Performance Measure 2.3.3). These measures, in conjunction with Performance Measures 2.3.4, and 2.3.5, help to ensure that the agency is engaging in appropriate types and sufficient levels of research, reports, and advocacy and that they are relevant to consumers, policymakers, businesses, and the legal community. The target for these measures sets a minimum level of activity that the agency is expected to achieve. Key Measure 2.3.1 Workshops, seminars, conferences, and hearings convened or cosponsored that involve significant competition-related issues. Events n/a 2005-10-01 2006-09-30 4 2006-10-01 2007-09-30 4 2007-10-01 2008-09-30 4 2008-10-01 2009-09-30 4 workshops, seminars, conferences, and hearings 4 2009-10-01 2010-09-30 4 2010-10-01 2011-09-30 4 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 7 2006-10-01 2007-09-30 5 2007-10-01 2008-09-30 8 2008-10-01 2009-09-30 Target exceeded. During FY 2010, the FTC held six conferences on competition-related topics, including energy, merger guidelines, the intersection of patent policy and competition policy, and journalism in the Internet age. Data Source: Information on conferences involving significant competition related issues is taken from the FTC website (www.FTC.gov/FTC/workshops.shtm) 6 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS The FTC continues to devote resources to the organization of workshops, conferences, and hearings to foster an environment of discussion and analysis of the hot-topic issues that relate to competition. Of particular note, during FY 2010, the FTC convened a two-day workshop analyzing how the expansion of electronic delivery of news through new media methods is challenging traditional news organizations, and the implications for competition among media outlets and for consumer welfare. In addition, the FTC held a series of workshops to consider updates to the Horizontal Merger Guidelines that are used by the FTC and the Department of Justice to evaluate the potential competitive effects of mergers and acquisitions, and a workshop on the intersection of patent and competition policy. Key Measure 2.3.2 Reports and studies issued on key competition-related topics. Reports and Studies n/a 2005-10-01 2006-09-30 8 2006-10-01 2007-09-30 8 2007-10-01 2008-09-30 8 2008-10-01 2009-09-30 8 reports and studies 8 2009-10-01 2010-09-30 8 2010-10-01 2011-09-30 8 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 18 2006-10-01 2007-09-30 7 2007-10-01 2008-09-30 20 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the FTC issued a total of nine reports on competition-related matters, thus exceeding the annual target. The reports addressed topics such as pay-for-delay agreements, ethanol market concentration, and oil and gas activities. 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) 9 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS Studying and issuing reports on the nation’s crucial economic sectors is a key component of the FTC’s competition related strategic objective. During FY 2010, the agency issued a seminal report on how pay-for-delay agreements in the pharmaceutical industry are costing U.S. consumers billions of dollars every year. Pay-for-delay is a type of anticompetitive patent settlement in which brandname pharmaceutical companies delay generic competition that lowers prices by agreeing to pay a generic competitor to hold its competing product off the market for a certain period of time. In addition, the FTC issued its fifth annual “Federal Trade Commission Report on Ethanol Market Concentration” on the state of ethanol production in the U.S., and the semiannual reports on oil and gas activities. Key Measure 2.3.3 Advocacy comments and amicus briefs on competition issues filed with entities including federal and state legislatures, agencies or courts. Comments and Briefs n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 6 comments and briefs 6 2009-10-01 2010-09-30 6 2010-10-01 2011-09-30 6 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the FTC filed advocacy comments on a range of competition issues, including gas pricing, electricity competition issues, and competition in medical, dentistry, and veterinary services. The FTC also filed amicus briefs on pay-for-delay settlements and patent issues, among others. Data Source: Internal matter records of advocacy comments and amicus briefs filed 17 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS In FY 2010, the FTC filed advocacy comments on a range of competition issues, including gas pricing, electricity competition issues, and competition in medical, dentistry, and veterinary services. The FTC also filed amicus briefs on pay-for-delay settlements and patent issues, among others. Performance Measure 2.3.4 Respondents finding the FTC’s advocacy comments and amicus briefs “useful.” Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 50.0% of respondents 50 2009-10-01 2010-09-30 50 2010-10-01 2011-09-30 50 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. The FTC mails advocacy recipients a survey designed to gauge the usefulness of agency advocacy comments and amicus briefs. “Usefulness” is assessed by the recipient. The target percentage recognizes that comments critiquing a recipient’s proposed action may not be assessed positively. In FY 2010, 8 of 8 survey responses classified the FTC’s submissions as useful. Data Source: A formal survey distributed to advocacy recipient 100 2009-10-01 2010-09-30 Performance Measure 2.3.5 The volume of traffic on www.FTC.gov relating to competition research, reports, and advocacy. Million Website Hits n/a 2005-10-01 2006-09-30 1.1 2006-10-01 2007-09-30 1.1 2007-10-01 2008-09-30 1.1 2008-10-01 2009-09-30 1.7 million hits 1.7 2009-10-01 2010-09-30 1.7 2010-10-01 2011-09-30 1.7 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 1.1 2006-10-01 2007-09-30 1.1 2007-10-01 2008-09-30 1.6 2008-10-01 2009-09-30 Target exceeded. This performance measure relates to the volume of traffic on the FTC’s web pages that relate to competition research, reports, and advocacy. In FY 2010, there were approximately 2.2 million visits, which met the criteria set by this measure. Data Source: The agency’s web statistics software 2.2 2009-10-01 2010-09-30 Research, Reports, Advocacy, and International Cooperation Enhance consumer welfare through research, reports, advocacy, and international cooperation and exchange _0356d094-8200-4c25-8822-747fdc22f3d7 2.4 The FTC seeks more effective, coordinated reviews of multijurisdictional mergers, and is working towards achieving consistent outcomes in cases of potential unilateral anticompetitive conduct. Our Strategy: To achieve this objective, the agency participates in multilateral competition organizations, which provides valuable opportunities to promote international cooperation and convergence and for competition officials to share insights on law enforcement and policy initiatives. The FTC also pursues the development of an international market-based competition model that focuses on the maximization of consumer benefit. The agency influences policy development and implementation by advising multilateral organizations, regional entities, and foreign government agencies through substantive consultations and written comments. and finally, the FTC provides technical assistance to newer competition agencies to enhance their ability to apply sound competition policies. Performance Results: The FTC uses two performance measures to assess performance for this objective. Key Measure 2.4.1 and Performance Measure 2.4.2 address the scope of our contact with international counterparts and help determine if our efforts are sufficiently broad-based. Key Measure 2.4.1 Policy advice provided to foreign competition agencies, directly and through international organizations, through substantive consultations, written submissions, or comments. Policy Inputs n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 40 policy inputs 40 2009-10-01 2010-09-30 40 2010-10-01 2011-09-30 40 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the FTC provided policy advice in 76 instances, through consultations, written submissions, or comments. The FTC’s policy advice continues to grow as a result of the increasing number of jurisdictions enforcing competition laws, the FTC’s participation in international organizations, and the FTC’s growing engagement with key jurisdictions such as China. The agency will continue to monitor the target of this new measure and will reassess it after additional performance cycles. Data Source: Information on the international activities of the FTC is produced by the agency’s Office of International Affairs 76 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS The FTC’s staff and officials work bilaterally with other agencies and through multilateral fora to provide policy advice in an effort to promote convergence based on sound competition law policy. The agency continues to devote significant resources to working with China and India on the implementation of their new laws and with sister agencies in key jurisdictions including the European Union, Canada, Japan, Korea, and Mexico. The FTC also actively participated in several multilateral organizations addressing competition policy and enforcement issues, often providing written submissions, which the FTC makes available on its website. Performance Measure 2.4.2 Technical assistance provided to foreign competition authorities. Missions or Fellows n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 10 technical assistance missions or international Fellows hosted 10 2009-10-01 2010-09-30 10 2010-10-01 2011-09-30 10 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. In FY 2010, the FTC conducted 54 technical assistance missions and hosted six international Fellows. Thirteen of the technical assistance missions and one international Fellow were funded through outside sources such as from U.S. Agency for International Development and the U.S. Trade and Development Agency. The agency will continue to monitor the target of this new measure and will reassess it after additional performance cycles. Data Source: Office of International Affairs technical assistance calendar. 60 2009-10-01 2010-09-30 Resources 2.1 Staffing Full-Time Equivalents 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 2010-10-01 2011-09-30 2011-10-01 2012-09-30 457 2005-10-01 2006-09-30 498 2006-10-01 2007-09-30 502 2007-10-01 2008-09-30 509 2008-10-01 2009-09-30 512 2009-10-01 2010-09-30 Resources 2.2 Obligations Dollars in Millions 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 2010-10-01 2011-09-30 2011-10-01 2012-09-30 86 2005-10-01 2006-09-30 94 2006-10-01 2007-09-30 103 2007-10-01 2008-09-30 113 2008-10-01 2009-09-30 123 2009-10-01 2010-09-30 Resources 2.3 Net Cost Dollars in Millions 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 2010-10-01 2011-09-30 2011-10-01 2012-09-30 -23 2005-10-01 2006-09-30 -47 2006-10-01 2007-09-30 2 2007-10-01 2008-09-30 68 2008-10-01 2009-09-30 43 2009-10-01 2010-09-30 Performance Advance the FTC’s performance through organizational, individual, and management excellence. 3 Since Goal 3 applies to overall performance across the agency, Goal 3 costs are distributed to Goal 1 and Goal 2. The FTC recognizes that a strong foundation of organizational, individual, and management excellence is a driver of mission success. The agency applies four objectives to achieve this goal. The objectives align with four key functional areas: human resources, infrastructure and security, information resources, and finance and acquisition. Human Resources Provide effective human resources management. 3.1 This objective aligns with the agency’s Human Capital Plan that encompasses leadership and knowledge management, a results-oriented performance culture, talent management, and job satisfaction. Our Strategy: The FTC recognizes that its employees are its greatest asset and places great emphasis on the importance of human resources management to the successful accomplishment of its mission. one of the key strategies used to achieve this objective entails implementing programs and processes that will enable the agency to quickly recruit, develop, and retain a qualified, diverse workforce through an integrated workforce plan. The FTC also uses the integrated workforce plan to identify and fulfill current and future human resources needs to carry out its mission and creates an agency-wide performance culture focused on individual and organizational accountability toward the achievement of the FTC’s programmatic goals and priorities. finally, the agency achieves this objective by providing human resources management training and outreach to staff. Performance Results: Two performance measures, Performance Measure 3.1.1 and Performance Measure 3.1.2, are used to gauge achievement of this objective. These measures are based on results from the federal employee Viewpoint survey administered by the U.s. office of Personnel Management. The survey focuses on federal employees’ perceptions of critical areas of their work life and workforce management, and measures factors that influence whether employees want to join, stay, and help their agency meet its mission. in fy 2010, the FTC had a survey response rate of 51 percent (478 of 931 employees responded) and, compared to other federal agencies with over 1,000 employees, received second place marks on the leadership and Knowledge Management, resultsoriented Performance culture, and Talent Management indexes and fourth place in Job satisfaction. in addition, the FTC is listed as one of the agencies with the highest increases since 2008 for three of these four indexes. of the 78 items on the survey, the FTC had 55 items with high positive ratings that are considered strengths; no items with negative ratings that would be considered weaknesses; and six items had a neutral rating. additionally, 64 items were five percentage points or more above the government-wide average, and no items were five percentage points or more below the government-wide average Performance Measure 3.1.1 The extent employees believe their organizational culture promotes improvement in processes, products and services, and organizational outcomes. n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Exceed the government-wide results on the Federal Human Capital Survey’s Results-Oriented Performance Culture Index 53 2009-10-01 2010-09-30 Exceed the government-wide results on the Federal Human Capital Survey’s Results-Oriented Performance Culture Index 2010-10-01 2011-09-30 Exceed the government-wide results on the Federal Human Capital Survey’s Results-Oriented Performance Culture Index 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target Met. The government-wide results were 53% and the FTC received 68%. Compared to 37 other departments and agencies with more than 1,000 full-time employees, the FTC took second place in Leadership and Knowledge Management and Results-Oriented Performance Culture. Data Source: 2010 Federal Employee Viewpoint Surve 68 2009-10-01 2010-09-30 Key Measure 3.1.2 The extent employees think the organization has the talent necessary to achieve organizational goals. Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Exceed the government-wide results on the Federal Human Capital Survey’s Talent Management Index. 60 2009-10-01 2010-09-30 Exceed the government-wide results on the Federal Human Capital Survey’s Talent Management Index. 2010-10-01 2011-09-30 Exceed the government-wide results on the Federal Human Capital Survey’s Talent Management Index. 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target Met. The government-wide results were 60% and the FTC received 72%. Compared to 37 other departments and agencies with more than 1,000 full-time employees, the FTC took second place in Talent Management. Data Source: 2010 Federal Employment Viewpoint Survey 72 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS The government-wide results were 60 percent and the FTC received 72 percent. The FTC took second place in Talent Management and fourth place in Job Satisfaction. In addition, the FTC is listed as one of the agencies with the highest increases since 2008 for three of these four indexes. Of the 78 items on the survey, the FTC had 55 items with high positive ratings that are considered strengths; zero items with negative ratings that would be considered weaknesses; and six items had a neutral rating. Additionally, 64 items were five percentage points or more above the governmentwide average and zero items were five percentage points or more below the governmentwide average. Infrastructure and Security Provide effective infrastructure and security management. 3.2 Building, modernizing, and maintaining physical and information technology infrastructure ensures a safe and secure workplace. Our Strategy: The FTC ensures a safe and secure workplace by promoting staff awareness, regularly participating in continuity of operations Plan (COOP) testing, and incorporating best practices from federal emergency Management agency (FEMA) staff. COOP exercises have established a viable, tested infrastructure that can provide continuation of the FTC’s mission along with a safe and secure environment for all staff in the event of an emergency. ensuring that the FTC has optimal informational technology (IT) infrastructure operations and performance is key to meeting the agency’s business goals. The ability of the agency’s information Technology Management office (ITMO) to deliver value to the agency is dependent upon its ability to identify and provide a host of critical services of improved quality, at lower business risk, and with increased agility. To this end, ITMO is working to deploy a sophisticated suite of infrastructure operations performance monitoring tools, technology, and processes that will help achieve the agency goals. Measuring and improving service delivery to bring positive business experiences and outcomes for the FTC is imperative. With ever-changing technology, including the potential for use of cloud computing, this must be accomplished in a growing, complex, and dynamic iT infrastructure and application environment. Performance Results: Two performance measures are used to gauge achievement of this objective. first, the FTC uses FEMA’s annual testing of COOP programs. The testing is captured as Performance Measure 3.2.1 and includes participation in the federal executive Branch continuity alert, notification, and deployment procedures as well as interagency communications. The agency also annually reviews its continuity capability, as well as its ability to identify and prioritize essential functions and conduct operations from pre-planned alternate locations. specifically, this measure represents performance in a series of exercises known as “eagle Horizon.” The target is based on prior performance and the target of 75 percent represents management’s commitment to reaching a realistic yet ambitious milestone. The exercises allow the executive Branch to implement integrated, overlapping national continuity concepts in order to ensure the preservation of our government and the continuing performance of essential functions. These services provided by the government at all levels and the private sector affect the everyday lives of citizens and customers. A second Performance Measure, Key Measure 3.2.2, assesses performance of this objective by collecting and tracking the availability of key information technology applications, systems, and components. By tracking unplanned outage periods, the agency monitors the reliability and availability of almost 30 critical information technology services including: email, FTC specific and custom applications and systems, BlackBerry servers, internet/intranet, telecommunications (includes phone and voicemail services), Wide area network, www.FTC.gov, secure access for employees, and enterprise-wide customer applications. Key Measure 3.2.1 A favorable Continuity of operations (CooP) rating. Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 75.0% rating 75 2009-10-01 2010-09-30 75.0% 75 2010-10-01 2011-09-30 75.0% 75 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. The FTC’s grade of 85% establishes the agency as a leader among all federal agencies within the Eagle Horizon program. These efforts included review of all previous exercises and the corresponding results, benchmarking to other federal agencies, and attendance at all of the FEMA program development meetings. The one area in which the FTC did not excel at the time of the exercise was the delegation of authority portion which made up the bulk of the 15% shortfall. The agency has since resolved this deficiency by establishing a delegation of authority policy. Data Source: FEMA’s Continuity Evaluation Tool 85 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS The agency’s COOP efforts established a viable, tested infrastructure that can provide continuation of the FTC’s mission along with a safe and secure environment for all staff in the event of an emergency. During FY 2010, the FTC received a grade of 85 percent on “Eagle Horizon” exercises, establishing the agency as a leader among all federal agencies in the program. At the time of the exercise, the agency did not excel in the delegation of authority portion. However, the agency has since resolved this shortcoming by establishing delegation of authority policy. Key Measure 3.2.2 Availability of information technology systems. Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 98.00% system availability 98 2009-10-01 2010-09-30 98.50% 98.5 2010-10-01 2011-09-30 99.00% 99 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. The FTC’s information technology services pool averaged 99.86% availability, exceeding the target of 98.00%. Data Source: ITMO’s Monthly System Availability Report 99.86 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS Measuring and improving service delivery to bring about a positive business experience and outcome for the FTC is a key imperative. To this end, the agency tracks unplanned, unscheduled service outage periods to monitor the reliability and availability (commonly referred to as “uptime”) of almost 30 critical information technology services such as the network, email, BlackBerry servers, Internet/Intranet, telecommunications, Wide Area Network connectivity, the agency’s citizen-centric website (www. FTC.gov), and enterprise-wide client applications. The high availability rate in FY 2010 for this pool of critical services helped ensure that the agency had optimal informational technology infrastructure operations and performance, which is key to meeting the agency’s strategic goals. IRM Provide effective information resources management. 3.3 The agency manages information to enable staff to make thoughtful decisions and perform their work, to facilitate appropriate public access, and to protect sensitive information from inappropriate access and release. Our Strategy: The FTC is undergoing a multiyear transition to managing information resources in electronic format as one of the best means of meeting this objective. As part of this transition, the FTC conducted an agencywide inventory of records, including major electronic systems. Based on the inventory, the agency then developed, finalized and submitted to the national archives and records administration a comprehensive retention schedule that, when NARA approves it, will authorize the FTC to maintain and dispose of agency records electronically. it will enable the FTC to concentrate on managing information rather than records schedules. as another step in the transition, during FT 2010, the FTC developed an electronic recordkeeping certification review process that will be used to review the ability of the FTC’s information systems to house agency records with authenticity, reliability and integrity for the mandated retention period. in addition, as part of effective information resources management, the FTC is identifying and implementing business process improvements through effective use of technology. for example, the FTC has developed a new web based e-filing system for public filings in administrative litigation under Part 3 of the FTC rules of Practice. Designed in the footprint of systems use by the federal courts, the FTC’s e-filing system enables parties to the agency’s administrative proceedings to file public documents electronically rather than in paper format. Performance Results: One performance measure, Performance Measure 3.3.1, is used to gauge success of this objective. This key performance measure is the percentage of commission-approved documents in the FTC’s ongoing and newly initiated proceedings available on www.FTC.gov within 15 days of becoming part of the public record. The FTC selected this measure because timely availability of public documents facilitates public awareness of and participation in commission activities. examples of documents approved by the commission are federal register notices in rulemakings and other proceedings that seek public comments, consent agreements, complaints and orders in administrative litigation, and complaints and proposed orders in litigation in the federal courts. Key Measure 3.3.1 Commission-approved documents in ongoing and newly initiated FTC proceedings available via the internet within 15 days of becoming part of the public record. Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 75.0% rating 75 2009-10-01 2010-09-30 75 2010-10-01 2011-09-30 80 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. In FY 2010, nearly 94% of documents tracked under this measure were posted to the Internet within 15 days of becoming part of the public record. The performance actual is an estimate based on samples from the first two quarters and actual counts for the remaining year. Comprehensive counts will be used in the future. Additionally, the target for this new performance measure will increase starting in FY 2012. Data Source: Internal records from the Office of the Secretary and the Records and Filings Office. 93.8 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS Making public documents easily available in a timely manner increases public awareness of Commission activities. During FY 2010, the FTC developed a new web-based “e-filing” system that enables parties in FTC administrative litigation to file public documents online, making the posting of public documents to the Internet faster and more efficient. Financial and Acquisition Management Provide effective financial and acquisition management. 3.4 Resource stewardship and financial oversight are fundamental to establishing the accountability and transparency through which organization, individual, and management excellence are fostered. Our Strategy: By promoting consistency and integrity throughout the organization, this objective contributes not only to efficient program delivery, but also to effective and efficient agency administration overall. our work in this area covers a wide range of administrative and operational efforts, such as formulating and executing the agency budget, managing acquisition activities, overseeing the internal control program, managing accounting operations, spearheading audit resolution, and ensuring compliance with various financial management laws and regulations. These efforts are critical to maintaining the management infrastructure needed to carry out the mission. one of the primary strategies the agency uses under this objective is to enhance the internal control environment. To support this work, in FT 2010 the FTC established an internal control review Plan to conduct internal control reviews of agency bureaus and offices at least once every three years. The objective of the reviews is to assist management in identifying high risk areas and implement appropriate risk management strategies where necessary. The first two reviews were conducted this year. in addition, the FTC is integrating disparate legacy systems with the agency’s core financial system, aligning resources to strategic priorities and outcomes to focus the agency on the most important tasks and programs, and implementing best business solutions to accomplish our goals through world-class acquisition and business processes. Performance Results: Three performance measures that assess internal administrative and programmatic operations and acquisition procedures are used to gauge the achievement of this objective. Performance Measure 3.4.1 tracks the independent auditor’s financial statement audit results, and Key Measure 3.4.2 tracks the percentage of Bureaus/offices that establish and maintain an effective, risk-based internal control environment. strong internal controls over financial and business processes are critical to the integrity of the data reported through the financial reporting system. Performance Measure 3.4.3 monitors performance against the small Business administration’s governmentwide small business procurement goals. Performance Measure 3.4.1 Independent auditor’s financial statement audit results. n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Unqualified opinion on the financial statements 2009-10-01 2010-09-30 Unqualified opinion on the financial statements 2010-10-01 2010-09-30 Unqualified opinion on the financial statements 2011-10-01 2011-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target Met. The agency received a “clean” opinion on its financial statements. The opinion is determined by the independent auditor’s review and tests of internal controls over operations and financial reporting and the auditor’s determination that the financial statements and notes are fairly presented. Data Source: Independent auditor’s opinion. 2009-10-01 2010-09-30 3.4.2 Bureaus/offices that establish and maintain an effective, risk-based internal control environment. Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 100.0% 100 2009-10-01 2010-09-30 100 2010-10-01 2010-09-30 100 2011-10-01 2011-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target Met. The Statements of Assurance (SOA) submitted by the agency’s major components provide the basis for the measurement of the effectiveness of the FTC’s risk-based internal control environment. Each component completed questionnaires specific to its functions that addressed the Government Accountability Office’s, “Standards of Internal Control” and other internal documentation supporting the SOA. The information was reviewed by the agency’s internal control management. In addition, the Financial Management Office conducted the first two reviews in accordance with its Internal Control Review Plan. Based on the SOAs and these internal reviews, this performance measure is met by 100% of the Bureaus/ Offices. Data Source: The Statements of Assurance submitted by the agency’s thirteen major component 100 2009-10-01 2010-09-30 PERFORMANCE HIGHLIGHTS In FY 2010 the FTC developed an Internal Control Review Plan to conduct internal control reviews of agency bureaus and offices at least once every three years. The objective of the reviews is to assist management in identifying high risk areas and implement appropriate risk management strategies where necessary. Performance Measure 3.4.3 Performance against the Small Business Administration’s government-wide small business procurement goals. Percentage n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 23.0% of total small business eligible dollars 23 2009-10-01 2010-09-30 23.0% 23 2010-10-01 2011-09-30 23.0% 23 2011-10-01 2012-09-30 n/a 2005-10-01 2006-09-30 n/a 2006-10-01 2007-09-30 n/a 2007-10-01 2008-09-30 n/a 2008-10-01 2009-09-30 Target exceeded. This measure encompasses contracts to organizations classified as small businesses in accordance with Federal Acquisition Regulation 19, i.e., open market procurements. The target is the Small Business Administration-assigned goal for the FTC. Data Source: The Federal Procurement Data System—Next Generation 58.9 2009-10-01 2010-09-30 Resources 3.1 Staffing Full-Time Equivalents 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 Resources 3.2 Obligations Dollars in Millions 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 Resources 3.3 Net Cost Dollars in Millions 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 2005-10-01 2006-09-30 2006-10-01 2007-09-30 2007-10-01 2008-09-30 2008-10-01 2009-09-30 2009-10-01 2010-09-30 2009-10-01 2010-10-31 2010-12-07 http://www.FTC.gov/opp/gpra/2010parreport.pdf Owen Ambur Owen.Ambur@verizon.net