President Donald Trump’s sudden firing of two Democratic Federal Trade Commission members risks dismantling an image the 110-year-old agency cultivated as an independent regulator, raising questions about the long-term future of corporate enforcement.
The move, part of a broader effort by the White House to exert greater control over the “administrative state,” sets up a likely showdown at the Supreme Court over the president’s ability to fire agency leaders at will.
If Trump wins in the long run, the norms established by the FTC over the years as a bipartisan, multimember commission would be out the window, making the agency more susceptible to being used as a “political tool,” said Rebecca Haw Allensworth, a Vanderbilt University law professor.
“An agency doesn’t have to be ossified. But the other extreme is every four years the agency has a totally different road map for its purpose,” Allensworth said. “What does this mean for businesses? How can they predict and plan? The answer is they can’t.”
Created by Congress in 1914, the Federal Trade Commission enforces the nation’s antitrust and consumer protection laws. It’s in active litigation against corporate giants such as
Andrew Ferguson, who joined the FTC last year and was elevated to chair by Trump, already had a wide berth to set the agency’s agenda. But he, like his predecessors, was tapped to lead a five-member body where no more than three officials could be from the same party and where appointees served staggered terms.
Current and former FTC officials have argued this setup created room for negotiations and dissenting voices, which benefited the public and businesses in the agency’s crosshairs. Ferguson just recently talked up its “value” in an appearance on Bloomberg’s Odd Lots podcast.
A unified front by the agency in lawsuits also gave it more credibility in court. “It’s clear in the data that bipartisan cases have a better track record,” said Maureen Ohlhausen, a Wilson Sonsini partner and former FTC acting chair.
Trump’s dismissal of the two Democratic commissioners, Alvaro Bedoya and Rebecca Kelly Slaughter, upends that system, said David Schwartz, a partner at Bryan Cave Leighton Paisner and former FTC attorney.
“The predictability, or the lack thereof, really changes a lot of underlying assumptions of how you interact with the FTC,” Schwartz said.
Constitutional Authority
Bedoya and Slaughter received notice from the White House personnel office on Tuesday that they’d been fired. Bedoya has since vowed to fight the move in court, which he called “illegal.” Slaughter said she is considering legal action as well.
Ferguson in a statement defended Trump’s decision, saying he had “no doubts about his constitutional authority to remove commissioners, which is necessary to ensure democratic accountability for our government.”
The move came as Ferguson awaited the confirmation of a third Republican—Mark Meador—for the seat former chair Lina Khan vacated, in turn giving Republicans a majority. Ferguson has vowed to undo parts of Khan’s aggressive agenda, which some lawyers argued already eroded the bipartisan nature the commission was known for.
Even so, Ferguson in recent months has shown an alignment with his predecessor in key areas.
He announced he’d follow the tougher merger review rules Biden antitrust enforcers published and launched a labor task force to target such issues as anticompetitive noncompete agreements. He’s also vowed to push forward in cases against Big Tech firms like Meta Platforms Inc. and Amazon Inc.
“There’s been no indication that his antitrust or consumer protection policy is going to change much from the Biden Administration,” Daniel Crane, a University of Michigan law professor, said.
Policy areas like privacy and AI are less clear.
“It’s important to think about how the company’s practices reflect the views of the White House, which is distinct from the commission’s past practice,” added Laura Riposo VanDruff, partner at Kelley Drye & Warren LLP and former assistant director for the FTC’s Division of Privacy & Identity Protection.
Humphrey’s Executor
That’s why Trump’s firings of Bedoya and Slaughter appear to be more about “consolidating power in the executive branch,” Crane added.
That push clashes with a 1935 Supreme Court ruling in United States v. Humphrey’s Executor, establishing that a president couldn’t fire FTC commissioners without cause such as inefficiency and neglect.
The decision gave way to the modern administrative state, according to legal scholars, but the conservative-majority Supreme Court over the last decade has thrown it into doubt with a series of rulings reining in regulators’ independence.
The Trump Justice Department in February said it would push the court to overturn the decision, arguing the leaders at the FTC and other agencies protected by it exercise executive powers and that the president therefore has ultimate authority over them. Ferguson quickly backed the Justice Department’s argument.
The Trump administration already paved the way for the court to reassess Humphrey’s with earlier firings of high-ranking officials at agencies including the National Labor Relations Board.
The potential court fight over the FTC firings could lead to various scenarios, one of which could give rise to “uncertainty about what authority the current commission has, but also calls into question what future presidents may do in completely resetting the FTC’s leadership,” said Rahul Rao, a White & Case partner and former FTC deputy director of competition.
“Business, more than anything, appreciate certainty and predictability, especially from agencies like the FTC,” Rao said.
— With assistance from
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