*422Mr. Justice McReynolds

delivered the opinion of the court.

By an Act approved September 26,1914, c. 311, 38 Stat. 717, Congress made provision for the Federal Trade Commission and declared its powers.

Section 4 defines commerce as “commerce among the several States or with foreign nations, or in any Territory of the United States or in the District of Columbia, or between any such Territory and another, or.between any such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation.”

Section 5. — “That unfair methods of competition in commerce are hereby declared unlawful. The commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, and common carriers subject to the Acts to regulate commerce, from using unfair methods of competition in commerce. Whenever the commission shall have reason to believe that any such person, partnership, or corporation has been or is using any unfair method of competition in commerce, and if it shall appear to the commission that a proceeding by it in respect thereof would be to the interest of the public, it shall issue and serve upon such person, partnership, or corporation a complaint stating its charges in that respect, and containing a notice of a hearing upon a day and at a place therein fixed at least thirty days after the service of said complaint. The person, partnership, or corporation so complained of shall have the right to appear at the place and time so fixed and show cause why an order should not be entered by the commission requiring such person, partnership, or corporation to cease and desist from the violation of the law so charged in said complaint. ... If upon such hearing the commission shall be of the opinion that the method of competition in question is-prohibited *423by this Act, it shall make a report in writing in which it shall state its findings as to the facts, and shall issue and cause to be served on such person, partnership, or corporation an order requiring such person, partnership, or corporation to cease and desist from using such method of competition.”

' Section-5 further provides that the commission may apply to the designated Circuit Court of Appeals to enforce an order, “And shall certify and file with its application a transcript of the entire record in the proceeding, including all the testimony taken and the report and order of the commission. Upon such filing of the application and transcript the court shall cause notice thereof to be served upon such person, partnership, or corporation and thereupon shall have jurisdiction of the proceeding and of the question determined therein, and shall have power to make and enter upon the pleadings, testimony, and proceedings set forth in such transcript a decree affirming, modifying, or setting aside the order of the commission. The findings of the commission as to the facts, if supported by testimony, shall be conclusive. . . . The judgment and decree of the court shall be final, except that the same shall be subject to review by the Supreme Court upon certiorari as provided in section two hundred and forty of the Judicial Code. Any party required by such order of the commission to ceasé and desist from using such method of competition may obtain a review of such order in said circuit court of appeals by filing in the court a written petition praying that the order of the commission be set aside. A copy of such petition shall be forthwith served upon the commission, and thereupon the commission forthwith shall certify and file in the court a transcript of the record as hereinbefore provided. Upon the filing of the transcript the court shall have, the same jurisdiction to affirm, set aside, or modify the order of the commission as in the case of an application by .the commission for the *424enforcement of its order, and the findings of the commis- . sion as to. the facts, if supported by testimony, shall in like manner ,be conclusive.” .

Sections 6 and 7 empower the commission to. require reports-and compile information concerning corporations;' to inquire concerning execution of decrees restraining violations of the anti-trust acts; to investigate alleged violations Of such acts; to recommend readjustments of corporate business; to publish information and make reports to Congress; to classify corporations and make rules and regulations; to investigate trade conditions; to act, under orders of the court, as a master in chancery in certain designated circumstances, etc. .

Undertaking to proceed under § 5, Jtine 4,. 1917, the commission issued a complaint containing two counts against respondents. The first related to unfair methods of competition, and the second charged, violation of .§ 3 of the Clayton Act, approved October 15, 1914, c.. 323, 38 Stat. 730. Respondents denied both charges.. After taking much testimony the commission held there was no evidence to support the second count; but it ruled that respondents had practiced, unfair competition and ordered that they, “their.officers and agents, cease and desist from requiring purchasers, of cotton ties to also buy or agree to buy, a proportionate ¿mount of American Manufacturing Company’s bagging and further that the respondents cease and desist from refusing to sell cotton ties unless the purchasers buy or agree to buy from them corresponding amounts of American Manufacturing Company’s bagging, or any amount of cotton bagging of any kind.”

Upon respondents’ petition the Circuit Court of Appeals, Second Circuit; annulled the commission’s order. 258 Fed. Rep. 314. It said, “We think there is no evidence to support any general practice of the respondents to refuse to sell ties unless the purchaser bought at the same time the necessary amount of the American Manufac*425turing Company’s bagging, and that the commission has no jurisdiction to determine the merits of specific individual grievances.”

The challenged order is based solely upon the first count, of the complaint which follows:

“Federal Trade Commission

“vs.

“Anderson Gratz and Benjamin Gratz, co-partners, doing business under the firm name and style of Warren, Jones & Gratz; P. P. Williams, W- H. Fitzhugh and Alex. Fitzhugh, co-partners, doing business under the firm name and style of P. P. Williams & Co., and Charles O. Elmer.

“The Federal Trade Commission having reason to believe, from a preliminary investigation made by it that Anderson Gratz and Benjamin Gratz, co-partners, doing business under the firm name and style of Warren, Jones & Gratz; P. P. Williams, W. H. Fitzhugh and Alex. Fitzhugh, co-partners, doing business under the firm niame and style of P. P. Williams & Co., and Charles O. Elmer, all of whom are hereinafter referred to as respondents, have been, and are, using unfair methods of competition in interstate commerce in violation of the provisions of section 5 of the act of Congress approved September 26, 1914, entitled ‘An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,’ and it appearing that a proceeding by it in respect thereof would .be to the interest of the public, issues this complaint, stating its charges in that respect, on information and belief, as follows:

“L

“Paragraph one: That the respondents, Anderson. Gratz and Benjamin Gratz, are co-partners, doing business under the firm name and style of Warren, Jones & Gratz, having their principal office and place of business *426in the city of St. Louis and State of Missouri, and are engaged in the business of selling, in interstate commerce, either directly to the trade, or through the respondents hereinafter named, steel ties made and used for binding bales of cotton, and which steel ties are manufactured by the Carnegie Steel .Company of Pittsburg, Pennsylvania, and also'selling, in the same" manner, jute bagging, used to wrap bales of cotton, and which jute bagging is manufactured by the American Manufacturing Company, of St. Louis, Missouri.

“Paragraph two: That the respondents, P. P. Williams, W. H. Fitzhugh and Alex. Fitzhugh, are co-partners, doing business under the firm name and style of P. P. Williams & Co., having their principal office and place of business in the . city of Vicksburg and State of .Mississippi, and the said last-named respondents . and the said respondent-Charles O. Elmer, who is located and doing business at the city of New Orleans and State of Louisiana, are the selling and distributing agents of the said firm of Warren, Jones & Gratz, and sell and distribute the tie? and bagging, manufactured as aforesaid, in interstate commerce, principally to jobbers and dealers, who resell the same to retailers, cotton ginners, and farmers.

“Paragraph three: That with the purpose, intent, and effect of discouraging and stifling competition in interstate .commerce in the sale of such bagging, all of the respondents, do now refuse, and for more than a ye.ar last past have refused to sell any of such ties unless the prospective purchaser thereof would also buy , from them bagging to be used with the number of ties proposed to be bought; that is. to say, for each six of such ties proposed to be bought from the respondents the prospective purchaser is required to buy six yards of such bagging.”

It is unnecessary now to discuss conflicting views concerning validity and meaning of the act creating the commission arid'effect of the evidence presented. The *427judgment below must be affirmed since, in our (pinion, the first count of the complaint is wholly insufficient to charge respondents with practicing “unfair methods of competition in commerce’’ within the fair intendment of those words. We go no further and confine this opinion to the point specified.

When proceeding under § 5, it is essential, first, that, having reason to believe a person, partnership or corporation has used an unfair method of competition in commerce, the commission shall conclude a proceeding “in respect thereof would be to the interest of the public; ” next, that it formulate and serve a complaint stating the charges “in that respect” and give opportunity to the accused to show why an order should not issue directing him to “cease and desist from the violation of the law so charged in said complaint.” If after a hearing the commission shall deem “the method of competition in question is prohibited .by this Act,” it shall issue an order requiring the accused “to cease and desist from using such method of competition.”

If, when liberally construed, the complaint is plainly insufficient to show unfair competition within the proper meaning of these words there is no foundation for an order to desist — the thing which may be prohibited is the method of competition specified in the complaint. Such an order should follow the complaint; otherwise it is improvident, and, when challenged, will be annulled by the court.

The words “unfair method óf competition” are not defined by the statute and their exact meaning is :ii dispute. It is for the courts, not the commission, ultimately to determine as matter of law what they includé. They are clearly inapplicable to practices never heretofore regarded as opposed to good morals because characterized by deception, bad faith, fraud or oppression, or as against public policy because of their dangerous tendency unduly to hinder competition or create monopoly. The act was *428certainly not intended to fetter free and fair competition as commonly understood and practiced by honorable opponents in trade.

Count one alleges, in effect, that Warren, Jones & Gratz are engaged in selling, either directly to the trade or through their co-respondents, cotton ties produced by the Carnegie Steel Company and also jute bagging manufactured by the American Manufacturing Company. That P. P. Williams & Company of Vicksburg, and Charles O. Elmer of New Orleans, are the selling and • distributing agents of Warren, Jones & Gratz, and as such sell and distribute their ties and bagging to jobbers and dealers who resell them to retailers, ginners and farmers. That with the purpose and effect of discouraging and stifling competition in the sale of such bagging all the respondents for more than a year have refused to sell any of such ties unless the purchaser would buy from them a corresponding amount of bagging — six yards with as many ties.

The complaint contains no intimation that Warren, Jones & Gratz did not properly obtain their ties and bagging as merchants usually do; the amount controlled by them is not stated; nor is it alleged that they held a monopoly of either ties or bagging or had ability, purpose or intent to acquire one. So far as appears, acting independently, they undertook to sell their lawfully acquired property in the ordinary course, without deception, misrepresentation, or oppression, and at fair pricés, to purchasers willing to take it upon terms openly announced.

Nothing is alleged which would justify the conclusion that the public suffered injury or that competitors had reasonable ground for complaint. All question of monopoly or combination being out of the way, a private merchant, acting with entire good faith, may properly refuse to sell except in conjunction, such closely associated articles as ties and bagging. If real competition is to continue, the right of the individual to exercise reasonable discretion *429in respect of his own business methods must be preserved. United States v. Colgate & Co., 250 U. S. 300; United States v. A. Schrader’s Son, Inc., 252 U. S. 85.

The first count of the complaint fails to show any unfair method of competition practiced by respondents and the order based thereon was improvident.

The judgment of the court below is

Afirmed.

Mr. Justice Pitney concurs in the result,

Mr. Justice Brandeis

dissenting, with whom Mr. Justice Clarke concurs.

First. The court disposes of the case on a question of pleading. This, under the circumstances, is contrary to established practice. The circumstances are these:

The pleading held defective is not one in this suit. It is the pleading by which was originated the proceeding before the Federal Trade Commission, an administrative tribunal, whose order this suit was brought to set aside. No suggestion was made in the proceeding before the Commission that the complaint was defective. No such obj ection was raised in this suit in the court below. It was not made here by counsel. The objection is taken now for the first time and by the court.

This suit, begun in the Circuit Court of Appeals for the Second Circuit, was brought to set aside an order of the Federal Trade Commission. Before the latter the matter involved was thoroughly tried on the merits. There was a complaint and answers. Thirty-five witnesses were examined and cross-examined. A report of proposed findings as to facts was- submitted by the Examiner and-exceptions were filed thereto. Then, the case was heard before the Commission, which made a finding of facts, stated its conclusions as to the law, and ultimately issued the order in question. The proceedings occupied more *430than sixteen months. The report of them fills four hundred pages of the printed record. In my opinion it is our duty to determine whether the facts found by the Commission are sufficient in law to support the order; and, also, if it is questioned, whether the evidence was sufficient to support the findings of fact.

Second. If the sufficiency of the complaint is held to be open for consideration here, we should, in my opinion, hold it to be sufficient. . The complaint was filed under § 5 of the Federal Trade Commission Act which declares unlawful “unfair methods of competition in commerce empowers the Commission to prevent their use; and directs it to issue and serve “a complaint stating its charges in that respect” whenever it has reason to believe that a concern “has been or is using” such methods. The function of the complaint is solely to advise the respondent of the charges made so that he may have due notice and full opportunity for a hearing thereon. It does not purport to set out the elements of a crime like an indictment or information, nor the elements of a-cause of action like a declaration at law or a bill in equity. All that is requisite in a complaint before the Commission is that, there be a plain statement of the thing claimed to be wrong so that the respondent may be put upon his defence. The practice of the Federal Trade Commission in this respect, as in many others, is modelled on that which has been pursued by the Interstate Commerce Commission for a generation and has been sanctioned by this as well as the lower federal courts. United States Leather Co. v. Southern Ry. Co., 21 I. C. C. 323, 324; Clinton Sugar Refining Co. v. C. & N. W, Ry. Co., 28 I. C. C. 364, 367; Stuarts Draft Milling Co. v. Southern Ry. Co., 31 I. C. C. 623, 624; New York Central, etc., R. R. Co. v. Interstate Commerce Commission, 168 Fed. Rep. 131, 138-439; Dickerson v. Louisville & Nashville R. R. Co., 187 Fed. Rep. 874, 878; Texas & Pacific Ry. Co. v. Interstate Commerce Commission, 162 *431U. S. 197, 215; Cincinnati, Hamilton & Dayton Ry. Co. v. Interstate Commerce Commission, 206 U. S. 142, 149.

The complaint here under consideration stated clearly that an unfair method of competition had been used by respondents, and specified what it was, namely, refusing to sell cotton ties unless the customer would purchase with each six ties also six yards of bagging. The complaint did not set out the circumstances which rendered this tying of bagging to ties an unfair practice. But this was not necessary. The complaint was similar in form to those filed with the Interstate Commerce Commission on complaints to enforce the prohibition of “unjust and unreasonable charges” or of “undue or unreasonable preference or advantage” which the Act to Regulate Commerce imposes. It is unnecessary to set forth why the rate specified was unjust or why the preference specified is undue or unreasonable, because these aie matters not of law but of fact to be established by the evidence. Pennsylvania Company v. United States, 236 U. S. 351,361. So far as appears neither this nor any other court has ever held that an order entered by the Interstate Commerce Commission may be set aside as void, because the complaint by which the proceeding was initiated, failed to set forth the reasons why the rate or the practice complained of was unjust or unreasonable; and I cannot see why a different. rule should be applied to orders of the Federal Trade Commission issued under § 5.1

*432In considering whether the complaint is sufficient, it is necessary to bear in mind the nature of the proceeding under review. The proceeding is not. punitive. The complaint is not made with a view to subjecting the respondents to any form of punishment. It is not remedial. The complaint is not filed with a view to affording compensation, for any injury alleged to have resulted from the matter charged, nor with a view to protecting individuals from any such injury in the future. The proceeding is strictly a preventive measure taken in the interest of the general public'. And what it is brought to prevent is.not the commission of acts of unfair competition, but the pursuit of unfair methods. Furthermore, the order is not self-executory. Standing alone it is only informative and advisory. The Commission cannot enforce it. If not acquiesced in by the respondents the Commission may apply to the Circuit Court of Appeals to enforce it. But the Commission need.not take such action; and it did not do so in respect to the order here in question. Respondents may, if they see fit, become the actors and ask to have the order set aside. That is what was done in the case at bar.

The proceéding is thus a novelty. It is a new device in administrative machinery, introduced by Congress in the year 1914, in the hope thereby of remedying conditions in business which a great majority of the American people regarded as menacing the general welfare, and which for more than a generation they had vainly attempted to remedy by the ordinary processes of law. It was believed that widespread and growing concentration in industry and commerce restrained trade and that monopolies were acquiring increasing control of business. Legislation designed to arrest the movement and to secure disintegration of existing combinations had been enacted by some of the States as early as 1889. In 1890 Congress passed the Sherman Law. It was followed by. much *433legislation in the States1 and many .official investigations. Between 1906 and 1913 reports were made by the Federal Bureau of Corporations of its investigations into the petroleum industry, the tobacco industry, the steel industry and the farm implement industry. A special committee of Congress investigated the affairs of the .United States Steel Corporation. And in 1911 this court rendered its decision in Standard Oil Co. v. United States, 221 U. S. 1, and in United States v. American Tobacco Co., 221-U. S. 106. The conviction became general in America, that the legislation of the past had been largely ineffective. There was general agreement that further legislation was desirable. But' there was a clear división of opinion as to .what its character should be. Many believed that concentration (called by its opponents monopoly) was inevitable and desirable; and these desired, that concentration should be recognized by law and be regulated. Others believed that concentration was a source of evil; that existing combinations could be disintegrated, if only the judicial machinery were perfected; and that further concentration could be averted by providing additional remedies, and particularly through regulating competition. The latter view prevailed in the Sixty-third Congress.2 *434The Clayton Act (October 15, 1914, c. 323, 38 Stat. 730) was framed largely with a view to making more effective the remedies given by the Sherman Law. The Federal Trade- Commission Act (September 26, 1914, c. 311, 38 Stat. 717) created an administrative tribunal, largely with a view to regulating competition.

Many of the duties imposed upon the Trade Commission had been theretofore performed by the Bureau of Corporations. That which was in essence new legislation was the power conferred by § 5. The belief was widespread that the great trusts had acquired their power, in the main, through destroying or overreaching their weaker rivals by resort to unfair practices.1 As Standard Oil rebates led to the creation of the Interstate Commerce Commission,2 other unfair methods of competition, which the investigations of the trusts had laid bare, led to the creation of the F'ederal Trade Commission. It was hoped that as the former had substantially eliminated rebates — the latter might put an end to all other unfair trade practices;— and that it might prove possible thereby to preserve the competitive system. It was a new éxperiment on old lines; and the machinery employed was substantially, similar.

In undertaking to regulate competition through the Trade Commission Congress (besides resorting to administrative as distinguished from judicial machinery) departed in two important, respects from the methods and measures theretofore applied in dealing with trusts and restraints of trade:

(1) Instead of attempting to inflict punishment for •having done prohibited acts, instead of enjoining the-*435continuance of prohibited combinations .and compelling disintegration of those formed in violation of law, the act undertook to preserve competition through supervisory action of the Commission. The potency of accomplished facts had already been demonstrated. The task of the Commission was to protect competitive business from further inroads by monopoly. It was to be ever vigilant. If it discovered that any business concern had used any practice which would be likely to result in public injury — because in its nature it would tend to aid or develop into a restraint of trade — -the Commission was directed to intervene, before any act should be done or condition arise violative of the Anti-Trust Act. And it should do. this by filing a complaint with a view to-a thorough investigation; and, if need be, the issue of an order. Its action was to be prophylactic. Its purpose in respect to restraints of trade was prevention of diseased business conditions, not cure. 1

*436(2) Instead of undertaking to define what practices should be deemed unfair,, as had been doné in earlier legislation, the act left the determination to the Commission.1 Experience with existing laws had taught that definition, being necessarily rigid, would prove embarrassing and, if rigorously applied, might involve great hardship, Methods of competition which would be unfair in one industry, under certain circumstances, might, when adopted in another industry, or even in the' same -industry under different circumstances, be entirely unobjectionable.2 *437Furthermore, an enumeration, however comprehensive, of existing methods of unfair competition must necessarily soon prove incomplete, as with new conditions constantly arising novel unfair methods would be devised and developed. In leaving to the Commission thé determination of the question whether the method of competition pursued'in a particular case was unfair, Congress followed the precedent which it had set a quarter of a century 'earlier, when by the Act to Regulate Commerce it conferred upon the Interstate Commerce Commission power to determine whether a preference or advantage given to a shipper or locality fell within the prohibition of an undue or unreasonable preference or advantage.1 See Pennsylvania Co. v. United States, supra, p. 361; Texas & Pacific Ry. Co. v. Interstate Commerce Commission, 162 U. S. 197, 219, 220. Recognizing that the question whether a method of competitive practice was unfair would ordinarily depend upon special facts, Congress imposed upon the Commission the duty of finding the facts; .and it declared that findings of fact so made (if duly, supported by evidence) were to be taken as final. The question whether the method of - competition pursued could, on those facts, reasonably be held by the Commission to constitute an unfair method of competition, being a question of law, was necessarily left open to jreview by the court. Compare Interstate Commerce Commission v. Diffenbaugh, 222 U. S. .42; Interstate Commerce Commission v. Baltimore & Ohio R. R. Co., 145 U. S. 263.

Third. Such a question of law is presented to us for decision; and it is this: Can the refusal by a manufacturer to sell his product to a jobber or retailer except upon condition that the purchaser will buy from him also his *438trade requirements in another article or articles, reasonably be found by the Commission to be an unfair method of competition under the circumstances set forth in the findings of fact? If we were called upon to consider the sufficiency of the complaint, and that merely, the question for our decision would be, whether the particular practice could, under ahy circumstances, reasonably be deemed an unfair method of competition. But as this suit to set aside the order of the Commission brings before us its findings of fact, we must determine whether these are sufficient to support their conclusion of law that the practice constituted “under the circumstances therein set forth, unfair methods of competition in interstate commerce, against other manufacturers, dealers and distributors . ’ . . in the material known as sugar bag cloth, and against manufacturers, dealers and distributors of the bagging known as rewoven bagging and second hand bagging, in violation of” the statute.

It is obvious that the imposition of such a condition is not necessarily and universally an unfair method; but that it may be such under some circumstances seems equally clear. Under the usual conditions of competitive trade the practice might be wholly unobjectionable. But the history of combinations has shown that what one may do with impunity, may have intolerable results when done by several in cooperation; Similarly, what approximately equal individual traders may do in honorable rivalry, may result in grave injustice and public injury, if done by a great corporation in a particular field of business' which it is able to dominate. In other words, a method of competition fair among equals may be very unfair if applied where there is inequality of resources.1 Without providing for those cases where tL > method of competition here involved would be unobjectionable, *439Massachusetts legislated against the practice, as early as 1901, by a statute (c. 478) of general application. Its highest court, in applying the law which it held to be constitutional, described the prohibited method as “unfair competition.” Commonwealth v. Strauss, 188 Massachusetts, 229; 191 Massachusetts, 545. Compare People v. Duke, 44 . N. Y. S. 336. The (Federal) Bureau of Corporations held the practice, which it described as “full-line forcing”, to be highly reprehensible.1 Congress, by § 3 of the Clayton Act, specifically prohibited the practice in a limited field under certain circumstances. An injunction against the practice has been included in several decrees in favor of the Government entered in cases under the Sherman Law.2 In the decree by which the American Tobacco Company was disintegrated pursuant to the mandate of this court, each of the fourteen companies was enjoined from “refusing to sell to any jobber any brand of any tobacco-product manufactured by it, except upon condition that such jobber shall purchase from' the vendor some other brand or product.also manufactured and sold by it. . . . ” United States v. American Tobacco Co., 191 Fed. Rep. 371, 429. The practice herein question is merely one form of the so-called “tying clauses” or “conditional requirements” which have been declared in a discerning study of the whole subject to be “perhaps the most interesting of any of the methods of unfair competition.” 3

The following facts found by the Commission, and which the Circuit Court of Appeals held were supported by sufficient evidence, show that the conditions in the *440cotton tie and bagging trade were in 1918 such that , the Federal Trade Commission could reasonably find that the tying cláuse here in, question, was an unfair method of competition: Cotton, Anierica’s.chief staple, is marketedm bales. To bale cotton steel ties and jute bagging are essential. The Carnegie Steel Company, a subsidiary of the United States Steel Corporation, manufactures so large a proportion of all such steel ties that it dominates the cotton tie situation in the United States and is able to fix and control the price of such ties throughout the country. The American Manufacturing Company manufactures about 45 per cent, of all bagging used for cotton baling; one other company about 20 per cent.; and the remaining 35 per cent. is. made up of second-hand bagging and a material called sugar-bag cloth.,- Warren, Jones & Gratz, of St. Louis, are the Carnegie Company’s solé, agents for selling and distributing steel ties. They are also the American Manufacturing Company’s sole agents for selling and distributing jute bagging in the cotton-growing section west of the ■ Mississippi;' ' By virtue. of their selling agency for the Carnegie Company, Warren, Jones & Gratz held a dominating and controlling position in the sale and, distribution of cotton , ties in the entire cotton-growing séction of the country, and thereby were in a position to force would-be purchasers of ties to also buy from thert. bagging manufactured by the American Manufacturing .Company. A great many merchants, jobbers and dealers in bagging and ties throughout the cotton-growing States were many times unable to procure ties from any other firm than Warren, Jones & Gratz. In many instances Warren, Jones & Gratz refused to sell ties unless the purchaser would also buy from them a corresponding amount of bagging, and such purchasers were oftentimes compelled to buy from them bagging manufactured by the. American Manufacturing Company in order to procure a sufficient supply of steel ties.

*441These are conditions closely resembling those under which “full-line forcing,” “exclusive-dealing requirements” or “shutting off materials, supplies or machines from competitors ” — well known methods of competition,, have been heid to be unfair, when practiced by concerns holding a preponderant position in the trade.1 .

Fourth. The Circuit Court of Appeals.set aside the order of the Commission solely on the ground that it was without authority to determine the merits of specific individual grievances, and that the evidence did' not support its finding that Warren, Jones & Gratz had “adopted and practiced the policy of refusing to sell steel ties to those merchants and dealers who wished to buy them from them unless such merchants and dealers would also buy from them a corresponding amount of jute bagging.” ■,

' The reason assigned by the Circuit Court of Appeals for so holding was that the evidence failed to show that the practice complained of (although acted on in individual cases by respondents) had become their “general practice.” But the power of the Trade Commission to prohibit an unfair method of competition found to have been used is not limited to cases where the practice had become general. What § 5 declares unlawful is not unfair competition. That had been unlawful before. What that section made unlawful were “unfair methods of competition ” ; that is, the method or means by which an unfair end might be accomplished. The Commission was directed to act, if it had reason to believe that an “unfair-method of competition in commerce ” has been or is being used. The purpose of Congress was to prevent any unfair method which may have been used by any concern in competition from becoming its general practice. It was only by stopping its use before it became a general prac*442tice, that the apprehended effect of an unfair method in suppressing competition by destroying rivals could be averted. As the Circuit Court of Appeals found that the evidence was sufficient to support the facts set forth above, ' and since on those facts the Commission could reasonably hold thát the method of competition in question was unfair under the circumstances, it had power under the act to issue the order complained of.

In my opinion the judgment of the Circuit Court of Appeals should be reversed.

Me. Justice Sutherland

delivered the opinion of the Court.

Under § 5 of the Federal Trade Commission Act, c. 311, 38 Stat. 717, 719 (U. S. C., Title 15, § 45), the relevant parts of which are copied in the margin,* the Commission issued its complaint charging the respondent with using unfair methods of competition in interstate commerce.

Respondent manufactures a preparation for internal use, denominated an “ obesity cure.” The complaint charges that this preparation is sold by respondent in and throughout the several States, generally to wholesalers who resell to retailer dealers, and these, in turn, to consumers; that it is offered for sale and sold in competition with other persons who are engaged “ in offering for sale, *645and selling, printed professional advice, books of information and instruction, and other methods and means and certain remedies and appliances for dissolving or otherwise removing excess flesh of the human body that respondent advertises in newspapers, etc., circulated generally in the United States, and in printed labels, etc., that the preparation is the result of scientific research, knowledge and accuracy, that it is safe and effective and may be used without discomfort, inconvenience or danger of harmful results to health. Among the ingredients is “ desiccated thyroid,” which, it is alleged, cannot be prescribed to act with reasonable uniformity on the bodies of all users, or without impairing the health of a substantial portion of them, etc., or with safety, without previous consultation with, and continuing observation and advice of, a competent medical adviser. The complaint further avers that many persons are seeking obesity remedies, and respondent’s advertisements are calculated to mislead and deceive the purchasing public into the belief that the preparation is safe, effective, dependable, and without danger of harmful results. By way of conclusion, it is said that “ the acts and practices of the respondent are all to the prejudice of the public and of competitors of respondent, . . . and constitute unfair methods of competition.”

*646.Respondent answered and hearings were had before an examiner. The Commission found against respondent and issued a cease and desist order. The findings in general follow the language of the complaint. There was no finding of prejudice or injury to any competitor, but the conclusion was drawn from the findings of fact that the. practice of respondent was to the prejudice of the public and respondent’s competitors, and constituted an unfair method of competition.

The court of appeals reviewed the action of the.Commission upon respondent’s petition, and reversed the order. 42 F. (2d) 430. We brought the case here by certiorari, limiting the briefs and argument to the question of the jurisdiction of the Commission.

In substance the Commission ordered the respondent to cease and desist from representing that its preparation is a scientific method for treating obesity, is the result of scientific research, or that' the formula is a scientific formula; and from representing its preparation as a remedy for obesity, unless accompanied by the statement that it cannot be taken safely except under medical advice and direction. Findings, supported by evidence, warrant the conclusion that the preparation is one which cannot be used generally with safety to physical health except under medical direction and advice. If the necessity of protecting the public against dangerously misleading advertisements of a remedy sold in interstate commerce were all that is necessary to give the Commission jurisdiction, the order could not successfully be assailed. But this is not all.

By the plain words of the act, the power of the Commission' to take steps looking to the issue of an order to desist depends upon the existence of three distinct prerequisites: (1) that the methods complained of are unfair; (2) that they are methods of competition in commerce; and (3) that a proceeding by the Commission to *647prevent the use of the methods appears to be in the interest of the public. We assume the existence of the first and third' of these requisites; and pass at once to the consideration of the second.

Section 5 of the Trade Commission Act is supplementary to the Sherman Anti-Trust Act and the Clayton Act. Federal Trade Comm. v. Beech-Nut Co., 257 U. S. 441, 453. The latter was discussed and passed at the same session of Congress. The Sherman. Act deals with contracts, agreements and combinations which tend to the prejudice of the public by the undue restriction of competition or the undue obstruction of the due course of trade, United States v. American Tobacco Co., 221 U. S. 106, 179; and which tend to “ restrict the common liberty to engage therein.” United States v. Patten, 226 U. S. 525, 541.

The Clayton Act, so far as it deals with the subject, was intended to reach in their incipiency agreements embraced within the sphere of the Sherman Act. Standard Fashion Co. v. Magrane-Houston Co., 258 U. S. 346, 355-357. The object of the Trade Commission Act was to stop in their incipiency those methods of competition which fall within the meaning of the word "unfair.” " The great purpose of both statutes was to advance the public interest by securing fair opportunity for the play of the contending forces ordinarily engendered by an honest desire for gain.” Federal Trade Comm. v. Sinclair Co., 261 U. S. 463, 476. All three statutes seek to protect the public from abuses arising in the course of competitive interstate and foreign trade. In a case arising under the Trade Commission Act, the fundamental questions are, whether the methods complained of are “ unfair,” and whether, as in cases under the Sherman Act, they tend to the substantial injury of the public by restricting competition in interstate trade and " the common liberty to engage therein.” The paramount aim of the act is the *648protection of the public from the evils likely to result from the destruction of competition or the restriction of it in a substantial degree, and this presupposes the existence of some substantial competition to be affected, since the public is not concerned in the maintenance of competition which itself is without real substance. Compare International Shoe Co. v. Federal Trade Comm., 280 U. S. 291, 297-299.

The bill which was the foundation of the Act, as it first passed the Senate, declared “ unfair competition ” to be unlawful. Debate apparently convinced the sponsors of the legislation that these words, which had a well settled meaning at common law, were too narrow. When the bill came from conference between the two Houses, these words had been eliminated and the words " unfair methods of competition ” substituted. Undoubtedly the substituted phrase has a broader meaning but how much broader has not been determined. It belongs to that class of phrases which do not admit of precise definition, but the meaning and application of which must be arrived at by what this court elsewhere has called “ the gradual process of judicial inclusion and exclusion.” Davidson v. New Orleans, 96 U. S. 97, 104. The question is one for the final determination of the courts and not of the Commission. Federal Trade Comm. v. Gratz, 253 U. S. 421, 427; Federal Trade Comm. v. Beech-Nut Co., supra, p. 453.

The authority of the Commission to proceed, if that body believes that there has been or is being used any unfair method of competition in- commerce, was then qualified in conference by the further requirement, not in the original bill,—“ and if it shall appear to the commission that a proceeding by it in respect thereof would be to the interest of the public.” By these additional words, protection to the public interest is made of paramount importance, but, nevertheless, they are not sub*649stantive words of jurisdiction, but complementary words of limitation upon the jurisdiction conferred by the language immediately preceding. Thus, the Commission is called upon first to determine, as a necessary prerequisite to the issue of a complaint, whether there is reason to believe that a given person, partnership or corporation has been or is using any unfair method of competition in commerce; and that being determined in the affirmative, the Commission still may not proceed unless it further appear that a proceeding would be to the interest of the public, and that such interest is specific and substantial. Federal Trade Comm. v. Klesner, 280 U. S. 19, 28. Unfair trade methods are not per se unfair methods of competition.

It is obvious that the word “ competition ” imports the existence of present or potential competitors, and the unfair methods must be such as injuriously affect or tend thus to affect the business of these competitors—that is to say, the trader whose methods are assailed as unfair must have present or potential rivals in trade whose business will be, or is likely to be, lessened or otherwise injured. It is that condition of affairs which the Commission is given power to correct, and it is against that condition of affairs, and not some other, that the Commission is authorized to protect the public. Official powers cannot be extended beyond the terms and necessary implications of the grant. If broader powers be desirable they must be conferred by Congress. They cannot be merely assumed by administrative officers; nor can they be created by the courts in the proper exercise of their judicial functions.

The foregoing view of the powers of the Commission under the Act find's confirmation, if that be needed, in the committee reports and the statements of those in charge of the legislation, as well as in the debate which took place in the Senate, extending over weeks of time and covering hundreds of pages in the Congressional Record. *650In that debate the necessity of curbing those whose unfair methods threatened to drive their competitors out of business was constantly emphasized. It was urged that the best way to stop monopoly at the threshold was to prevent unfair competition; that the unfair competition sought to be reached was that which must ultimately result in the extinction of rivals and the establishment of monopoly; that by the words “unfair methods” was meant those resorted to for the purpose of destroying com-: petition or of eliminating a competitor or of introducing monopoly—such as tend unfairly to destroy or injure the business of a competitor; that the law was necessary to protect small business against giant competitors; that it was an effort to make competition stronger in its fight against monopoly; that unfair competition was that practice which destroys competition and establishes monopoly. These and similar statements run through the debate from beginning to end. Although protection to the public interest was recognized as the ultimate aim, comparatively little was said about it.

It is true, at least generally, that statements made in debate cannot be used as aids to the construction of a statute. But the fact that throughout the consideration of this legislation there was common agreement in the debate as to the great purpose of the act, may properly be considered in determining what that purpose was and what were the evils sought to be remedied. In Ho Ah Kow v. Nunan, 5 Sawy. 552, it appeared that the Board of Supervisors of San Francisco had adopted an ordinance which provided that every male person imprisoned in the county jail, etc., should immediately upon his arrival at the jail have the hair of his head “ cut or clipped to an uniform length of one inch from the scalp thereof.” The ordinance was attacked as being hostile and discriminating legislation against the Chinese, and in order to demonstrate this, in spite of the general terms of the ordinance, statements of supervisors made in debate were *651put in. evidence. Mr. Justice Field, speaking for himself and Judge Sawyer, said (p. 560):

“ The statements of supervisors, in debate on the passage of the ordinance cannot, it is true, be resorted to for the purpose of explaining the meaning of the terms used; but they can be resorted to for the purpose of ascertaining the general object of the legislation proposed, and the mischiefs sought to be remedied.”

While it is impossible from the -terms of the act itself, and in the light of the foregoing circumstances leading up to its passage, reasonably to conclude that Congress intended to vest the Commission with the general power to prevent all sorts of \infair trade practices in commerce apart from their actual or potential effect upon the trade of competitors, it is not necessary that the facts point to any particular trader or traders. It is enough that there be present or potential substantial competition, which is shown by proof, or appears by necessary inference, to have been injured, or to be clearly threatened with injury, to a substantial extent, by the use of the unfair methods complained of.

In Federal Trade Comm. v. Winsted Co., 258 U. S. 483, it appeared that a manufacturer engaged in selling underwear and other knit goods made partly of wool, labeled them as “ natural merino,” “ natural wool,” “Australian wool,” etc. It was shown that a substantial part of the consuming public and some buyers and retailers understood the words used in the labels to mean that the underwear was all wool. Part of the public was thereby misled into selling or into buying, as all wool, underwear which was in large part cotton. The labels were false and calculated to deceive, and did in fact deceive, a substantial portion of the purchasing public. This court, after saying that the facts show that a proceeding to stop the practice was in the interest of the public, added (page 493) :

*652“And they show also that the practice constitutes an unfair method of competition as against manufacturers of all wool knit underwear and as against those manufacturers of mixed wool and cotton underwear who brand their product truthfully. For when misbranded goods attract customers by means of the fraud which they perpetrate, trade is diverted from the producer of truthfully marked goods. That these honest manufacturers might protect their trade by also resorting to deceptive labels is no defense to this proceeding brought against the Winsted Company in the public interest.”

And again, at page 494, after reaffirming the existence of the public interest, the court said:

. . since the business of its trade rivals who marked their goods truthfully was necessarily affected by that practice, the Commission was justified in its conclusion that the practice constituted an unfair method of competition; ...”

The court below thought that the trade to be protected “ was that legitimate trade which was entitled to hold its own in the trade field without embarrassment from unfair competition.” There is much force in this conception of the act, and the language just quoted from the Winsted case seems inferentially to lend it support. Certainly, it is hard to see why Congress would set itself to the task of devising means and creating administrative machinery for the purpose of preserving the business of one knave from the unfair competition of another. In the present case, however, • we do not find it necessary further to consider the merits of this view or to determine whether the facts are such as to bring the case within it.

Findings of the Commission justify the conclusion that the advertisements naturally would tend to increase the business of respondent; but there is neither finding nor evidence from which the conclusion legitimately can be drawn that these advertisements substantially injured or tended thus to injure the business of any competitor or *653of competitors generally, whether legitimate or not. None of the supposed competitors appeared or was called upon to show what, if any, effect the misleading advertisements had, or were likely to have, upon his business. The only evidence as to the existence of competitors comes'from medical sources not engaged in making or selling “ obesity cures,” and consists in the main of a list of supposed producers and sellers of “ anti-fat remedies ” compiled from the files and records of the Bureau of Investigation of the American Medical Association, a list which appears to have been gathered mainly from newspapers and advertisements. The only specific evidence was that of a witness who said that he had purchased in drug stores in Chicago five different anti-fat treatments and could have purchased a sixth. How long they had been in stock, what was their nature, whether they were intended to be used internally^ or in what way they competed or could compete with respondent’s preparation, does not appear. Of course, medical practitioners, by some of whom the danger of using the remedy without competent advice was exposed, are not in competition with respondent. They follow a profession and not a trade, and are not engaged in the business of making or vending remedies but in prescribing them. It is impossible to say whether, as a result of respondent’s advertisements, any business was diverted, or was likely to be diverted, from others engaged in like trade, or whether competitors, identified or unidentified, were injured in their business, or were likely to be injured, or, indeed,' whether any other anti-obesity remedies were sold or offered for sale in competition, or were of such a character as naturally to come into any real competition, with respondent’s preparation in the interstate market. All this was left without proof and remains, at best, a matter of conjecture. Something more substantial than that is required as a basis for the exercise of the authority of the Commission.

*654Whether the respondent, in what it was doing, was subjecting itself to administrative or other proceeding under the statute relating to. the misbranding of foods and drugs we need not now inquire for the administration of that statute is not committed to the Federal Trade Commission-

A proceeding under § 5 is not one instituted‘before the Commission by one party against another. It is instituted by the Commission itself, and is authorized whenever the Commission has reason to believe that unfair methods of competition in commerce are being used, and that a proceeding by it in respect thereof would be to the interest of the public. Acting upon its belief, the Commission issues charges and enters upon an inquiry which, of course, it has jurisdiction to make. But one of the facts necessary to support jurisdiction to make the final order to cease and desist, is the existence of competition; and the Commission cannot, by assuming the existence of competition, if in fact there be none, give itself jurisdiction to make such an order. If, as a result of the inquiry, it turn out that the preliminary assumption of competition is without foundation, jurisdiction to make that order necessarily fails, and the proceeding must be dismissed by the Commission. Compare Federal Trade Comm. v. Klesner, supra, pp. 29-30. That course should have been followed here.

The decree of the court below is Affirmed

Mr. Justice White

delivered the opinion of the Court.

In June 1968 the Federal Trade Commission held that the largest and oldest company in the trading stamp industry,1 Sperry & Hutchinson (S&H), was violating § 5 of the Federal Trade Commission Act, 38 Stat. 719, as amended, 15 U. S. C. §45 (a)(1), in three respects. The Commission found that S&H improperly regulated the maximum rate at which trading stamps were dispensed by its retail licensees; that it combined with others to regulate the rate of stamp dispensation throughout the industry; and that it attempted (almost invariably successfully) to suppress the operation of trading stamp exchanges and other “free and open” redemption of stamps. The Commission entered cease- and-desist orders accordingly.

*235S&H appealed only the third of these orders. Before the Court of Appeals for the Fifth Circuit it conceded that it acted as the Commission found, but argued that its conduct is beyond the reach of § 5 of the Act. That section provides, in pertinent part, that:

“The Commission is empowered and directed to prevent persons, partnerships, or corporations . . . from using unfair methods of competition in commerce and unfair or deceptive acts or practices in commerce.” 15 U. S. C. §45 (a)(6).

As S&H sees it, § 5 empowers the Commission to restrain only such practices as are either in violation of the antitrust laws, deceptive, or repugnant to public morals. In S&H’s view, its practice of successfully prosecuting stamp exchanges in state and federal courts cannot be restrained under any of these theories.

The Court of Appeals for the Fifth Circuit agreed and reversed the Commission, Judge Wisdom dissenting. 432 F. 2d 146 (1970). In the lower court’s view:

“To be the type of practice that the Commission has the power to declare 'unfair’ the act complained of must fall within one of the following types of violations: (1) a per se violation of antitrust policy; (2) a violation of the letter of either the Sherman, Clayton, or Robinson-Patman Acts; or (3) a violation of the spirit of these Acts as recognized by the Supreme Court of the United States.” Id., at 150 (footnote omitted).

Holding that the FTC had not demonstrated that S&H’s conduct violated either the letter or the spirit of the antitrust laws, the Court of Appeals vacated the Commission’s order.

The FTC petitioned for review in this Court. We granted certiorari to determine the questions presented in the petition. 401 U. S. 992 (1971).

*236I

The Challenged Conduct

S&H has been issuing trading stamps — small pieces of gummed paper about the size of postage stamps— since 1896. In 1964, the year from which data in this litigation are derived, the company had about 40% of the business in an industry that annually issued 400 billion stamps to more than 200,000 retail establishments for distribution in connection with retail sales of some 40 billion dollars. In 1964, more than 60% of all American consumers saved S&H Green Stamps.

In the normal course, the trading stamp business operates as follows. S&H sells its stamps to retailers, primarily to supermarkets and gas stations, at a cost of about $2.65 per 1200 stamps; retailers give the stamps to consumers (typically at a rate of one for each 100 worth of purchases) as a bonus for their patronage; consumers paste the stamps in books of 1,200 and exchange the books for “gifts” at any of 850 S&H Redemption Centers maintained around the country. Each book typically buys between $2.86 and $3.31 worth of merchandise depending on the location of the redemption center and type of goods purchased. Since its development of this cycle 75 years ago, S&H has sold over one trillion stamps and redeemed approximately 86% of them.

A cluster of factors relevant to this litigation tends to disrupt this cycle and, in S&H’s view, to threaten its business. An incomplete book has no redemption value. Even a complete book is of limited value because most “gifts” may be obtained only on submission of more than one book. For these reasons a collector of another type of stamps who has acquired a small number of green stamps may benefit by exchanging *237with a green stamp collector who has opposite holdings and preferences. Similarly, because of the seasonal usefulness or immediate utility2 of an object sought, a collector may want to buy stamps outright and thus put himself in a position to secure redemption merchandise immediately though it is “priced” beyond his current stamp holdings. Or a collector may seek to sell his stamps in order to use the resulting cash to make more basic purchases (food, shoes, etc.) than redemption centers normally provide.

Periodically over the past 70 years professional exchanges have arisen to service this demand. Motivated by the prospect of profit realizable as a result of serving as middlemen in swaps, the exchanges will sell books of S&H stamps previously acquired from consumers, or, for a fee, will give a consumer another company’s stamps for S&H’s or vice versa. Further, some regular merchants have offered discounts on their own goods in return for S&H stamps. Retailers do this as a means of competing with merchants in the area who issue stamps. By offering a price break in return for stamps, the redeeming merchant replaces the incentive to return to the issuing merchant (to secure more stamps so as to be able to obtain a gift at a redemption center) with the attraction of securing immediate benefit from the stamps by exchanging them for a discount at his store.3

S&H fears these activities because they are believed to reduce consumer proclivity to return to green-stamp-issuing stores and thus lower a store’s incentive to buy and distribute stamps. The company attempts to pre-empt “trafficking” in its stamps by contractual pro*238visions reflected in a notice on the inside cover of every S&H stamp book. The notice reads:

“Neither the stamps nor the books are sold to merchants, collectors or any other persons, at all times the title thereto being expressly reserved in the Company .... The stamps are issued to you as evidence of cash payment to the merchants issuing the same. The only right which you acquire in said stamps is to paste them in books like this and present them to us for redemption. You must not dispose of them or make any further use of them without our consent in writing. We will in every case where application is made to us give you permission to turn over your stamps to any other bona-fide collector of S&H Green . . . Stamps; but if the stamps or the books are transferred without our consent, we reserve the right to restrain their use by, or take them from other parties. It is to your interest that you fill the book, and personally derive the benefits and advantages of redeeming it.” (Reproduced at 2 App. 230.)

S&H makes no effort to enforce this condition when consumers casually exchange stamps with each other, though reportedly some 20%' of all the company's stamps change hands in this manner. But S&H vigorously moves against unauthorized commercial exchanges and redeemers. Between 1957 and 1965, by its own account the company filed for 43 injunctions against merchants who redeemed or exchanged its stamps without authorization, and it sent letters threatening legal action to 140 stamp exchanges and 175 businesses that redeemed S&H stamps. In almost all instances the threat or the reality of suit forced the businessmen to abandon their unauthorized practices.

*239II

The Reach of Section 5

The Commission presented two questions in its petition for certiorari, the first being “[w]hether Section 5 of the Federal Trade Commission Act, which directs the Commission to prevent ‘unfair methods of competition . . . and unfair or deceptive acts or practices,’ is limited to conduct which violates the letter or spirit of the antitrust laws.” The other issue relates to the significance of state court holdings that the practices challenged here are lawful.4 Neither question requests review of the Court of Appeals’ decision that the business conduct proscribed by the Commission violates neither the letter nor spirit of the antitrust laws. Accordingly, we intimate no opinion on that issue and turn to the question of the reach of § 5.

In reality, the question is a double one: First, does § 5 empower the Commission to define and proscribe an unfair competitive practice, even though the practice does not infringe either the letter or the spirit of the antitrust laws? Second, does § 5 empower the Commission to proscribe practices as unfair or deceptive in their effect upon consumers regardless of their nature or quality as competitive practices or their effect on competition? We think the statute, its legislative history, and prior cases compel an affirmative answer to both questions.

When Congress created the Federal Trade Commission in 1914 and charted its power and responsibility *240under § 5, it explicitly considered, and rejected, the notion that it reduce the ambiguity of the phrase “unfair methods of competition” by tying the concept of unfairness to a common-law or statutory standard or by enumerating the particular practices to which it was intended to apply. Senate Report No. 597, 63d Cong., 2d Sess., 13 (1914), presents the reasoning that led the Senate Committee to avoid the temptations of precision when framing the Trade Commission Act:

“The committee gave careful consideration to the question as to whether it would attempt to define the many and variable unfair practices which prevail in commerce and to forbid their continuance or whether it would, by a general declaration condemning unfair practices, leave it to the commission to determine what practices were unfair. It concluded that the latter course would be the better, for the reason, as stated by one of the representatives of the Illinois Manufacturers’ Association, that there were too many unfair practices to define, and after writing 20 of them into the law it would be quite possible to invent others.”

The House Conference Report was no less explicit. “It is impossible to frame definitions which embrace all unfair practices. There is no limit to human inventiveness in this field. Even if all known unfair practices were specifically defined and prohibited, it would be at once necessary to begin over again. If Congress were to adopt the method of definition, it would undertake an endless task.” H. R. Conf. Rep. No. 1142, 63d Cong., 2d Sess., 19 (1914). See also Rublee, The Original Plan and Early History of the Federal Trade Commission, 11 Acad. Pol. Sci. Proc. 666, 667 (1926); Baker & Baum, Section 5 of the Federal Trade Commission Act: A Continuing Process of Redefinition, 7 Vill. L. Rev. 517 (1962).

*241Since the sweep and flexibility of this approach were thus made crystal clear, there have twice been judicial attempts to fence in the grounds upon which the FTC might rest a finding of unfairness. In FTC v. Gratz, 253 U. S. 421 (1920), the Court over the strong dissent of Mr. Justice Brandéis (who had been involved in drafting the Trade Commission Act), wrote that while the “exact meaning” of the phrase “ ‘unfair method of competition’... is in dispute,” the only practices that were subject to this characterization were those that were “heretofore regarded as opposed to good morals because characterized by deception, bad faith, fraud or oppression, or as against public policy because of their dangerous tendency unduly to hinder competition or create monopoly.” Id., at 427. This view was reiterated in other opinions over the next decade. See, e. g., FTC v. Curtis Publishing Co., 260 U. S. 568 (1923), and FTC v. Sinclair Refining Co., 261 U. S. 463, 475-476 (1923). The opinion of the Court of Appeals’ majority, citing Sinclair in support of its narrow view of the FTC’s leeway, is in the tradition of these authorities.

In FTC v. Raladam Co., 283 U. S. 643 (1931), a unanimous Court held that: “The paramount aim of the act is the protection of the public from the evils likely to result from the destruction of competition or the restriction of it in a substantial degree .... Unfair trade methods are not per se unfair methods of competition.” (Italics in original.) “It is obvious,” the Court continued,

“that the word ‘competition’ imports the existence of present or potential competitors, and the unfair methods must be such as injuriously affect or tend thus to affect the business of these competitors— that is to say, the trader whose methods are assailed as unfair must have present or potential rivals in trade whose business will be, or is likely to be, *242lessened or otherwise injured. It is that condition of affairs which the Commission is given power to correct, and it is against that condition of affairs, and not some other, that the Commission is authorized to protect the public. ... If broader powers be desirable they must be conferred by Congress.” Id., at 647-649.

Neither of these limiting interpretations survives to buttress the Court of Appeals’ view of the instant case. Even if the first fine of cases, Gratz and its progeny, stood unimpaired, their deference to action taken to constrain “deception, bad faith, fraud or oppression” would grant the FTC greater power to set right what it perceives as wrong than the panel of the Court of Appeals acknowledges. But frequent opportunity for reconsideration has consistently and emphatically led this Court to the view that the perspective of Gratz is too confined. As we recently unanimously observed: “Later cases of this Court . . . have rejected the Gratz view and it is now recognized in line with the dissent of Mr. Justice Brandéis in Gratz that the Commission has broad powers to declare trade practices unfair.” FTC v. Brown Shoe Co., 384 U. S. 316, 320-321 (1966).

The leading case that recognized a role for the FTC beyond that mapped out in Gratz, FTC v. R. F. Keppel & Bro., Inc., 291 U. S. 304 (1934), also brought Raladam into question; on both counts it sets the standard by which the range of FTC jurisdiction is to be measured today. Keppel & Brothers sold penny candies in “break and take” packs, a form of merchandising that induced children to buy lesser amounts of concededly inferior candy in the hope of by luck hitting on bonus packs containing extra candy and prizes. The FTC issued a cease-and-desist order under § 5 on the theory that the popular marketing scheme con*243travened public policy insofar as it tempted children to gamble and compelled those who would successfully compete with Keppel to abandon their scruples by similarly tempting children.

The Court had no difficulty in sustaining the FTC’s conclusion that the practice was “unfair,” though any competitor could maintain his position simply by adopting the challenged practice. “[H]ere,” the Court said, “the competitive method is shown to exploit consumers, children, who are unable to protect themselves .... [I]t is clear that the practice is of the sort which the common law and criminal statutes have long deemed contrary to public policy.” Id., at 313.

En route to this result the Court met Keppel’s arguments that, absent an antitrust violation or at least incipient injury to competitors, Gratz and Raladam so strait jacketed the FTC that the Commission could not issue a cease-and-desist order proscribing even an immoral practice. It held:

“Neither the language nor the history of the Act suggests that Congress intended to confine the forbidden methods to fixed and unyielding categories. The common law afforded a definition of unfair competition and, before the enactment of the Federal Trade Commission Act, the Sherman Act had laid its inhibition upon combinations to restrain or monopolize interstate commerce which the courts had construed to include restraints upon competition in interstate commerce. It would not have been a difficult feat of draftsmanship to have restricted the operation of the Trade Commission Act to those methods of competition in interstate commerce which are forbidden at common law or which are likely to grow into violations of the Sherman Act, if that had been the purpose of the legislation.” Id., at 310.

*244Thenceforth, unfair competitive practices were not limited to those likely to have anticompetitive consequences after the manner of the antitrust laws; nor were unfair practices in commerce confined to purely competitive behavior.

The perspective of Keppel, displacing that of Rala-dam, was legislatively confirmed when Congress adopted the 1938 Wheeler-Lea amendment, 52 Stat. Ill, to § 5. The amendment added the phrase “unfair or deceptive acts or practices” to the section’s original ban on “unfair methods of competition” and thus made it clear that Congress, through § 5, charged the FTC with protecting consumers as well as competitors. The House Report on the amendment summarized congressional thinking: “[T]his amendment makes the consumer, who may be injured by an unfair trade practice, of equal concern, before the law, with the merchant or manufacturer injured by the unfair methods of a dishonest competitor.” H. R. Rep. No. 1613, 75th Cong., 1st Sess., 3 (1937). See also S. Rep. No. 1705, 74th Cong., 2d Sess., 2-3 (1936).

Thus, legislative and judicial authorities alike convince us that the Federal Trade Commission does not arrogate excessive power to itself if, in measuring a practice against the elusive, but congressionally mandated standard of fairness, it, like a court of equity, considers public values beyond simply those enshrined in the letter or encompassed in the spirit of the antitrust laws.5

*245III

The general conclusion just enunciated requires us to hold that the Court of Appeals erred in its construction of § 5 of the Federal Trade Commission Act. Ordinarily we would simply reverse the judgment of the Court of Appeals insofar as it limited the unfair practices proscribed by § 5 to those contrary to the letter and spirit of the antitrust laws and we would remand the case for consideration of whether the challenged practices, though posing no threat to competition within the precepts of the antitrust laws, are nevertheless either (1) unfair methods of competition or (2) unfair or deceptive acts or practices.

What we deem to be proper concerns about the interaction of administrative agencies and the courts, however, counsels another course in this case. In this Court the Commission argues that, however correct the Court of Appeals may be in holding the challenged S&H practices beyond the reach of the letter or spirit of the antitrust laws, the Court of Appeals nevertheless *246erred in asserting that the FTC could measure and ban conduct only according to such narrow criteria. Proceeding from this premise, with which we agree, the Commission’s major submission is that its order is sustainable as a proper exercise of its power to proscribe practices unfair to consumers. Its minor position is that it also properly found S&H’s practices to be unfair competitive methods apart from their propriety under the antitrust laws.

The difficulty with the Commission’s position is that we must look to its opinion, not to the arguments of its counsel, for the underpinnings of its order. “Congress has delegated to the administrative official and not to appellate counsel the responsibility for elaborating and enforcing statutory commands.” Investment Co. Institute v. Camp, 401 U. S. 617, 628 (1971). We cannot read the FTC opinion on which the challenged order rests as premised on anything other than the classic antitrust rationale of restraint of trade and injury to competition.

The Commission urges reversal of the Court of Appeals and approval of its own order because, in its words, “[t]he Act gives the Commission comprehensive power to prevent trade practices which are deceptive or unfair to consumers, regardless of whether they also are anticompetitive.” Brief for the FTC 15. It says the Court of Appeals was “wrong in two ways: you can have an anticompetitive impact that is not a violation of the antitrust laws and violate Section 5. You can also have an impact upon consumers without regard to competition and you can uphold a Section 5 violation on that ground.” Tr. of Oral Arg. 18. Though completely accurate, these statements cannot be squared with the Commission’s holding that “[i]t is essential in this matter, we believe, and as we have heretofore indicated, to determine whether or not there has been or may be an *247impairment of competition,” Opinion of Commission, 1 App. 175; its conclusion that “ [respondent . . . prevents . . . competitive reaction [s] and thereby it has restrained trade. We believe this is an unfair method of competition and an unfair act and practice in violation of Section 5 of the Federal Trade Commission Act and so hold,” 1 App. 178; its observation that:

“Respondent’s individual acts and its acts with others taken to suppress trading stamp exchanges and other stamp redemption activity are all part of a clearly defined restrictive policy pursued by the respondent. In the circumstances surrounding this particular practice it is difficult to wholly separate the individual acts from the collective acts for the purpose of making an analysis of the consequences under the antitrust laws.” 1 App. 179;

and like statements throughout the opinion, see, e. g., 1 App. 176-178, passim.

There is no indication in the Commission’s opinion that it found S&H’s conduct to be unfair in its effect on competitors because of considerations other than those at the root of the antitrust laws.6 For its part, the *248theory that the FTC’s decision is derived from its concern for consumers finds support in only one line of the Commission’s opinion. The Commission’s observation that S&H’s conduct limited “stamp collecting consumers’ . .. freedom of choice in the disposition of trading stamps,” 1 App. 176, will not alone support a conclusion that the FTC has found S&H guilty of unfair practices because of damage to consumers.

Arguably, the Commission’s findings, in contrast to its opinion, go beyond concern with competition and address themselves to noncompetitive and consumer injury as well. It may also be that such findings would have evidentiary support in the record. But even if the findings were considered to be adequate foundation for an opinion and order resting on unfair consequences to consumer interests, they still fail to sustain the Commission action; for the Commission has not rendered an opinion which, by the route suggested, links its findings and its conclusions. The opinion is barren of any attempt to rest the order on its assessment of particular competitive practices or considerations of consumer interests independent of possible or actual effects on competition. Nor were any standards for doing so referred to or developed.

*249Our view is that “the considerations urged here in support of the Commission’s order were not those upon which its action was based.” SEC v. Chenery Corp., 318 U. S. 80, 92 (1943). At the least the Commission has failed to “articulate any rational connection between the facts found and the choice made.” Burlington Truck Lines v. United States, 371 U. S. 156, 168 (1962).

The Commission’s action being flawed in this respect, we cannot sustain its order. “[T]he orderly functioning of the process of review requires that the grounds upon which the administrative agency acted be clearly disclosed and adequately sustained.” Chenery, supra, at 94. Burlington Truck Lines, supra, at 169. A court cannot label a practice “unfair” under 15 U. S. C. § 45 (a)(1). It can only affirm or vacate an agency’s judgment to that effect. “If an order is valid only as a determination of policy or judgment which the agency alone is authorized to make and which it .has not made, a judicial judgment cannot be made to do service for an administrative judgment.” Chenery, supra, at 88. And as was repeated on other occasions:

“For the courts to substitute their or counsel’s discretion for that of the Commission is incompatible with the orderly functioning of the process of judicial review. This is not to deprecate, but to vindicate (see Phelps Dodge Corp. v. Labor Board, 313 U. S. 177, 197), the administrative process, for the purpose of the rule is to avoid ‘propel [ling] the court into the domain which Congress has set aside exclusively for the administrative agency.’ 332 U. S., at 196.” Burlington Truck Lines, supra, at 169.

In these circumstances, because the Court of Appeals’ judgment that S&H’s practices did not violate either the letter or the spirit of the antitrust laws was not attacked and remains undisturbed here, and because the Comm is*250sion’s order could not properly be sustained on other grounds, the judgment of the Court of Appeals setting aside the Commission’s order is affirmed. The Court of Appeals erred, however, in its construction of § 5; had it entertained the proper view of the reach of the section, the preferable course would have been to remand the case to the Commission for further proceedings. Chenery, supra, at 95; Burlington, supra, at 174; FPC v. United Gas Pipe Line Co., 393 U. S. 71 (1968). Accordingly, the judgment of the Court of Appeals is modified to this extent and the case is remanded to the Court of Appeals with instructions to remand it to the Commission for such further proceedings, not inconsistent with this opinion, as may be appropriate.

So ordered.

Mr. Justice Powell and Mr. Justice Rehnquist took no part in the consideration or decision of this case.

QUINN, Associate Judge.

Appellant, a person of limited education separated from her husband, is maintaining herself and her seven children by means of public assistance. During the period 1957-1962 she had a continuous course of dealings with appellee from which she purchased many household articles on the installment plan. These included sheets, curtains, rugs, chairs, a chest of drawers, beds, mattresses, a washing machine, and a stereo set. In 1963 appellee filed a complaint in replevin for possession of all the items purchased by appellant, alleging that her payments were in default and that it retained title to the goods according to the sales contracts. By the writ of replevin appellee obtained a bed, chest of drawers, washing machine, and the stereo set. After hearing testimony and examining the contracts, the trial court entered judgment for appellee.

Appellant’s principal contentions on appeal are (1) there was a lack of meeting of the minds, and (2) the contracts were against public policy.

Appellant signed fourteen contracts in all. They were approximately six inches in length and each contained a long paragraph in extremely fine print. One of the sentences in this paragraph provided that payments, after the first purchase, were to be prorated on all purchases then outstanding. Mathematically, this had the effect of keeping a balance due on all items until the time balance was completely eliminated. It meant that title to the first purchase, remained in appellee until the fourteenth purchase, made some five years later, was fully paid.

At trial appellant testified that she understood the agreements to mean that when payments on the running account were sufficient to balance the amount due on an individual item, the item became hers. She testified that most of the purchases were made at her home; that the contracts were signed in blank; that she did not read the instruments; and that she was not provided with a copy. She admitted, however, that she did not ask anyone to read or explain the contracts to her.

*916We have stated that “one who refrains from reading a contract and in conscious ignorance of its terms voluntarily assents thereto will not be relieved from his bad bargain.” Bob Wilson, Inc. v. Swann, D.C.Mun.App., 168 A.2d 198, 199 (1961). “One who signs a contract has a duty to read it and is obligated according to its terms.” Hollywood Credit Clothing Co. v. Gibson, D.C.App., 188 A.2d 348, 349 (1963). “It is as much the duty of a person who cannot read the language in which a contract is written to have someone read it to him before he signs it, as it is the duty of one who can read to peruse it himself before signing it.” Stern v. Moneyweight Scale Co., 42 App.D.C. 162, 165 (1914).

A careful review of the record shows that appellant’s assent was not obtained “by fraud or even misrepresentation falling short of fraud.” Hollywood Credit Clothing Co. v. Gibson, supra. This is not a case of mutual misunderstanding but a unilateral mistake. Under these circumstances, appellant’s first contention is without merit.

Appellant’s second argument presents a more serious question. The record reveals that prior to the last purchase appellant had reduced the balance in her account to $164. The last purchase, a stereo set, raised the balance due to $678. Significantly, at the time of this and the preceding purchases, appellee was aware of appellant’s financial position. The reverse side of the stereo contract listed the name of appellant’s social worker and her $218 monthly stipend from the government. Nevertheless, with full knowledge that appellant had to feed, clothe and support both herself and seven children on this amount, appellee sold her a $514 stereo set.

We cannot condemn too strongly appellee’s conduct. It raises serious questions of sharp practice and irresponsible business dealings. A review of the legislation in the District of Columbia affecting retail sales and the pertinent decisions of the highest court in this jurisdiction disclose, however, no ground upon which this court can declare the contracts in question contrary to public policy. We note that were the Maryland Retail Installment Sales Act, Art. 83 §§ 128-153, or its equivalent, in force in the District of Columbia, we could grant appellant appropriate relief. We think Congress should consider corrective legislation to protect the public from such exploitive contracts as were utilized in the case at bar.

Affirmed.

J. SHELLY WRIGHT, Circuit Judge:

Appellee, Walker-Thomas Furniture Company, operates a retail furniture store in the District of Columbia. During the period from 1957 to 1962 each appellant in these cases purchased a number of household items from Walker-Thomas, for which payment was to be made in installments. The terms of each purchase were contained in a printed form contract which set forth the value of the purchased item and purported to lease the item to appellant for a stipulated monthly rent payment. The contract then provided, in substance, that title would remain in Walker-Thomas until the total of all the monthly payments made equaled the stated value of the item, at which time appellants could take title. In the event of a default in the payment of any monthly installment, Walker-Thomas could repossess the item.

The contract further provided that “the amount of each periodical installment payment to be made by [purchaser] to the Company under this present lease shall be inclusive of and not in addition to the amount of each installment payment to be made by [purchaser] under such prior leases, bills or accounts; and all payments now and hereafter made by [:purchaser] shall be credited pro rata on all outstanding leases, bills and accounts due the Company by [purchaser] at the time each such payment is made.” Emphasis added.) The effect of this rather obscure provision was to keep a balance due on every item purchased until the balance due on all items, whenever purchased, was liquidated. As a result, the debt incurred at the time of purchase of each item was secured by the right to repossess all the items previously purchased by the same purchaser, and each new item purchased automatically became subject to a security interest arising out of the previous dealings.

On May 12, 1962, appellant Thorne purchased an item described as a Daveno, three tables, and two lamps, having total stated value of $391.10. Shortly thereafter, he defaulted on his monthly payments and appellee sought to replevy all the items purchased since the first transaction in 1958. Similarly, on April 17, 1962, appellant Williams bought a stereo set of stated value of $514.95.1 She too defaulted shortly thereafter, and appellee sought to replevy all the items purchased since December, 1957. The Court of General Sessions granted judgment for appellee. The District of Columbia Court of Appeals affirmed, and we granted appellants’ motion for leave to appeal to this court.

Appellants’ principal contention, rejected by both the trial and the appellate courts below, is that these contracts, or at least some of them, are unconscionable and, hence, not enforceable. In its opin*448ion in Williams v. Walker-Thomas Furniture Company, 198 A.2d 914, 916 (1964), the District of Columbia Court of Appeals explained its rejection of this contention as follows:

“Appellant’s second argument presents a more serious question. The record reveals that prior to the last purchase appellant had reduced the balance in her account to $164. The last purchase, a stereo set, raised the balance due to $678. Significantly, at the time of this and the preceding ■ purchases, appellee was aware of appellant’s financial position. The reverse side of the stereo contract listed the name of appellant’s social worker and her $218 monthly stipend from the government. Nevertheless, with full knowledge that appellant had to feed, clothe and support both herself and seven children on this amount, appellee sold her a $514 stereo set.

“We cannot condemn too strongly appellee’s conduct. It raises serious questions of sharp practice and irresponsible business dealings. A review of the legislation in the District of Columbia affecting retail sales and the pertinent decisions of the highest court in this jurisdiction disclose, however, no ground upon which this court can declare the contracts in question contrary to public policy. We note that were the Maryland Retail Installment Sales Act, Art. 83 §§ 128-153, or its equivalent, in force in the District of Columbia, we could grant appellant appropriate relief. We think Congress should consider corrective legislation to protect the public from such exploitive contracts as were utilized in the case at bar.”

We do not agree that the court lacked the power to refuse enforcement to contracts found to be unconscionable. In other jurisdictions, it has been held as a matter of common law that unconscionable contracts are not enforceable.2 While no decision of this court so holding has been found, the notion that an unconscionable bargain should not be given full enforcement is by no means novel. In Scott v. United States, 79 U.S. (12 Wall.) 443, 445, 20 L.Ed. 438 (1870), the Supreme Court stated:

“ * * * If a contract be unreasonable and unconscionable, but not void for fraud, a court of law will give to the party who sues for its breach damages, not according to its letter, but only such as he is equitably entitled to. * * * ”3

Since we have never adopted or rejected such a rule,4 the question here presented is actually one of first impression.

Congress has recently enacted the Uniform Commercial Code, which specifically provides that the court may refuse to enforce a contract which it finds to be unconscionable at the time it was made. 28 D.C.Code § 2-302 (Supp. IV 1965). The enactment of this section, which occurred subsequent to the contracts here in suit, does not mean that *449the common law of the District of Columbia was otherwise at the time of enactment, nor does it preclude the court from adopting a similar rule in the exercise of its powers to develop the common law for the District of Columbia. In fact, in view of the absence of prior authority on the point, we consider the congressional adoption of § 2-302 persuasive authority for following the rationale of the cases from which the section is explicitly derived.5 Accordingly, we hold that where the element of unconscionability is present at the time a contract is made, the contract should not be enforced.

Unconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.6 Whether a meaningful choice is present in a particular case can only be determined by consideration of all the circumstances surrounding the transaction. In many cases the meaningfulness of the choice is negated by a gross inequality of bargaining power.7 The manner in which the contract was entered is also relevant to this consideration. Did each party to the contract, considering his obvious education or lack of it, have a reasonable opportunity to understand the terms of the contract, or were the important terms hidden in a maze of fine print and minimized by deceptive sales practices? Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he has entered a one-sided bargain.8 But when a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all the terms. In such a case the usual rule that the terms of the *450agreement are not to be questioned9 should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld.10

In determining reasonableness or fairness, the primary concern must be with the terms of the contract considered in light of the circumstances existing when the contract was made. The test is not simple, nor can it be mechanically applied. The terms are to be considered “in the light of the general commercial background and the commercial needs of the particular trade or ease.”11 Corbin suggests the test' as being whether the terms are “so extreme as to appear unconscionable according to the mores and business practices of the time and place.” 1 Corbin, op. cit. supra Note 2.12 We think this formulation correctly states the test to be applied in those cases where no meaningful choice was exercised upon entering the contract.

Because the trial court and the appellate court did not feel that enforcement could be refused, no findings were made on the possible unconscionability of the contracts in these cases. Since the record is not sufficient for our deciding the issue as a matter of law, the cases must be remanded to the trial court for further proceedings.

So ordered.

DANAHER, Circuit Judge

(dissenting) :

The District of Columbia Court of Appeals obviously was as unhappy about the situation here presented as any of us can possibly be. Its opinion in the Williams case, quoted in the majority text, concludes: “We think Congress should consider corrective legislation to protect the public from such exploitive contracts as were utilized in the case at bar.”

My view is thus summed up by an able court which made no finding that there had actually been sharp practice. Rather the appellant seems to have known precisely where she stood.

There are many aspects of public policy here involved. What is a luxury to some may seem an outright necessity to others. Is public oversight to be required of the expenditures of relief funds? A washing machine, e. g., in the hands of a relief client might become a fruitful source of income. Many relief clients may well need credit, and certain business establishments will take long chances on the sale of items, expecting their pricing policies will afford a degree of protection commensurate with the risk. Perhaps a remedy when necessary will be found within the provisions of the “Loan Shark” law, D.C.Code §§ 26-601 et seq. (1961).

I mention such matters only to emphasize the desirability of a cautious approach to any such problem, particularly since the law for so long has allowed parties such great latitude in making their own contracts. I dare say there must annually be thousands upon thousands of installment credit transactions in this jurisdiction, and one can only speculate *451as to the efféct the decision in these cases will have.1

I join the District of Columbia Court of Appeals in its disposition of the issues.