ADventures in Law

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Historically, changes in administrations did not lead to major changes at the Federal Trade Commission (FTC). There were some adjustments around the edges, but the agency mostly operated on a bipartisan basis. Those days, however, are gone, and the election results of last week will make a real change in what to expect from the FTC in 2025 and beyond. Of course, nothing is set in stone as to what to expect from the new administration or the commissioners.

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Currently, we have five commissioners – three Democrats and two Republicans. One of the Democrats is Chair Lina Khan, and her term actually expired in September of this year. At the FTC, however, commissioners are able to stay on board even after their term expires until the Senate confirms their replacement.

Shortly after the January 2025 inauguration, either Commissioner Melissa Holyoak or Commissioner Andrew Ferguson will be designated by the new president as either the new FTC chair or the new FTC acting chair. At that point, there still will be two Republicans and three Democrats, so there are some real limits as to what the new chair can actually get done, given the fact that you need a majority in order to take action at the FTC. Even if Khan decides to leave right after the inauguration, you then have a stalemate at 2-2. Now, there is a lot that a chair can do without formal votes – but if the commission wants to file a complaint, dismiss an action or start a process to rescind a rule, a majority vote is required. At the same time, a deadlocked commission also means unfinished agenda items from the Biden-era FTC will either need bipartisan agreement or wither on the vine.

Historically, incoming administrations were a bit slow in nominating and confirming appointees for the FTC. Indeed, former Chair Joseph Simons was not appointed until at least a year after the 2017 inauguration. That is not likely to happen this time around. The FTC is a much higher-profile agency at the moment, and FTC issues were quite prominent in recent political campaigns (particularly on the competition side). We anticipate that a new Republican commissioner (or a new permanent Republican chair) could be confirmed by April or May of 2025, especially given that the Republicans also control the Senate, making confirmation a breeze.

When we look below the level of commissioner, change is limited. It is almost certain that the new chair or acting chair, soon after being appointed, will replace most or all of the bureau directors. But beyond that, FTC staff and other FTC managers will remain in place.

Where Will We Likely See Consumer Protection Changes?

As we evaluate where to expect policy and substantive consumer protection changes at the commission, it makes sense to focus on the areas where we have seen Republican dissents (including those of former commissioners Noah Joshua Phillips and Christine Wilson). At a high level, these are some of the areas where we expect to see some shifts:

Rulemakings. A hallmark of the Khan FTC has been the explosion in rulemaking, and that trend will stop. We anticipate the next administration will take steps to stop most rulemakings that haven’t been completed and to undo some of the rules that have been finalized, including the recently finalized Negative Option Rule and the modified Health Breach Notification Rule. Some of the undoing of rules could also be done by Congress through Congressional Review Act procedures that allow Congress to void some rules promulgated by a prior administration.

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Undoing Broader Law Interpretations. There have been numerous areas in the Khan era where the commission has broadly interpreted certain laws, including the FTC’s unfairness authority and the Restore Online Consumers Confidence Act. Anticipate a return to the basics, with less-expansive interpretations of the law and a more-targeted focus on statutory language and reasonable expectations of the law.

Enforcement Continues. Let’s be clear – Republicans also bring lots of law enforcement actions, and under Simons, the FTC brought multiple, record-setting civil penalty actions. That will likely continue.

Some Triage Will Occur. A new FTC chair will be looking closely at the full pipeline of FTC investigations and will likely take steps to shut down or modify investigations that are inconsistent with their priorities and their interpretations of the law. We won’t be privy to much of this, but it will likely occur to varying degrees.

Tech Remains in the Spotlight. ­The FTC will remain focused on tech and potential privacy issues but will likely also be considering issues such as how social media sites moderate content and deplatform users. These are issues that the FTC has not delved into in the past, but they will likely surface under a new administration.

Fraud and More Fraud. Although the commission will still be focused on legitimate players, you can expect to see a greater focus on the fraudulent actors who engage in egregious law violations that harm consumers.

More Focus on Data and Economics. Historically, Republican commissions have been more interested in economic analysis. Expect that trend to continue.

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As for the question of which commissioner will be named chair or acting chair in January 2025, place your bets. We will continue to monitor FTC activity and keep you informed as this very significant transition develops.

What Does the Election Mean for the FTC?