According to Sec. 5 of US Federal Trade Commission Act, unfair methods of competition in or affecting commerce, and unfair or deceptive acts or parctices in or affecting commerce are unlawful. This regulation has been copied by § 24 of our Fair Trade Law, which in essence reads: An enterprise shall not conduct deceptive or obviously unfair acts that are sufficient to affect trading order. This paper looks forward to study the historical background of Sec.5 of the FTCA, its relation to the Sherman and Clayton Act and its meaning in the face of changing diversity of commerical activities-in the hope that § 24 of the Fair Trade Law can thus be better understood and applied. The study leads to the following: 1. There is no general definition of "unfair methods of competition" and "unfair or deceptive acts" available. 2. Unfair methods of competition has in general three major types: that which violates antitrust laws; that which violates commerce standards, that are widly accepted as fair; and that which violates the public policies recognised by the FTC. 3. Acts which fullfill the following three criteria are deceptive: the tendency to mislead comsumers, a substantial number of consumers can be misled, and the misleading must have materiality. 4. Acts which injure the consumers in a substantial way, the injury is greater than the benefit done to the competition or comsumers, and the injury can not be avoided under reasonable circumstances, are unfair. Acts which violate the well-established public policies are also unfair.