So You Want to be an FTC Chairman?
Ten Big Challenges Facing Chairman Ferguson as He Leads the FTC Through Pretty Perilous Times.
So you want to be an FTC Chairman? Congratulations to my friend Andrew Ferguson on designation by President Trump as the new FTC Chairman. I’ve written before about why Mr. Ferguson is well-positioned to lead the FTC. But I cannot think of a more challenging time in the history of the FTC. Ferguson took over the Chairmanship on January 20th and immediately faces what I think can fairly characterized as an existential slate of challenges for the agency. That’s no exaggeration. I’ve written about the many ways in which the FTC is broken.
But for now – how about the TL;DR version of the hand Mr. Ferguson has been dealt:
The FTC has flouted the rule of law for the past 4 years in litigation, settlements, and process;
FTC staff morale is at an all time low because they doubt the integrity of their leadership. High quality staff has left the building in droves and many of those remaining feel marginalized by FTC leadership;
The Khan FTC spent the last 4 years simultaneously changing enforcement approaches while throwing out valuable agency guidance, including the Trump Merger Guidelines and the bipartisan Section 5 Unfair Methods of Competition Policy Statement;
FTC reputational capital – which it sorely needs in a world where it must increasingly litigate to win — is at an all time low for many reasons, including that the Khan FTC turned its once-heralded policy shops into propaganda machines rather than first class research institutions;
From the noncompete rule to the new HSR Merger Tax to a panoply of rules and consents in the consumer protection world, the FTC has created a bureaucratic thicket that taxes commerce.
And those are just the immediate challenges. That list does not include ordinary challenges like budget and resource concerns, proposals on the landscape to fold the FTC’s competition staff into the DOJ (a good idea, in my view), and a looming 2-2 deadlock that will prevent Chairman Ferguson from implementing his agenda for some time. The list also does not include another important challenge facing Chairman Ferguson: a politically motivated minority committed to work against President Trump’s agenda. Commissioners Bedoya and Slaughter greeted Mr. Ferguson’s announcement as Chairman with a snarky open letter posted to X chastising him for daring to mention items in President Trump’s agenda and not spending enough time on the policy items that Bedoya and Slaughter prefer.
But dissenting Commissioners are part of the job – don’t I know it. There are other more important challenges facing Chairman Ferguson. As I’ve continued to emphasize – over and over – my view is that the most important “big picture” challenge facing the Trump FTC in 2025 is “splitting the uprights” between aggressive enforcement where appropriate and undoing some of the bureaucratic and regulatory excess of the Biden administration.
A successful run as Chairman will turn on successes on both of these fronts. Not just one. People understand fairly well the zeal among conservatives for aggressive antitrust enforcement targeting Big Tech (and in particular, social media). But the business community and antitrust bar would be mistaken if they thought the enforcement uptick will be that narrow. Ferguson has not made this a secret. It is not difficult to find differences between his own approach and conservatives and libertarians who placed more weight on regulatory restraint and greater deference to markets. Chairman Ferguson was selected at least in part precisely because he represents the brand of modern conservative who differs from traditional antitrust conservatives, e.g. folks like Jim Miller, Doug Ginsburg, Tim Muris, Tom Barnett, myself and plenty of others. That is not to say Ferguson does not value or understand market outcomes or the role of economics in antitrust. I do not believe that to be true at all. But his objective function places very different weights on the costs and benefits of intervention than traditional conservatives. (There are also some other differences in weights – just for one example, I would describe most of the “traditional conservatives” as having rather fair weather and flexible views on federalism when it comes to the relationship between the federal antitrust laws and state law or regulation; but I’m willing to bet Chairman Ferguson has a more principled view on that relationship than what the antitrust community is used to seeing).
Most commentators seem to only understand this difference within the context of Big Tech. Fair enough. Scream “the FTC is coming for Big Tech” once to get it out of your system so we can talk about other things. Done? OK. Once you get that out of your system you should accept the uptick in enforcement is going to be rational, thoughtful, and will respect the rule of law, but it will be broader than you are thinking if you are banking only on an assault on Big Tech.
But Ferguson and the old school antitrust conservatives have a lot in common as well. I believe I just called myself old. I turned 48 on Inauguration Day. My children say I’m old when I turn 50. I’m adopting their market definition for now. Anyhow, reading his statements one picks up many common themes with traditional antitrust conservatives. For example, Ferguson is concerned FTC flouts the rule of law in using procedural advantages to extract settlements (compare the joint statement in Pioneer to, e.g. my statement in Reynolds / Lorillard or Fidelity); or that the FTC has expanded its Section 5 Unfair Methods of Competition authority beyond its scope; or with novel theories untethered from sound interpretation of the antitrust laws. And I’m limiting these to the competition side — there are even more commonalities on the consumer protection side of the house.
There are some cynical takes out there that Ferguson and the “new” right are just like Lina Khan but with new political targets. Nonsense. There are at least two key differences. The first is that fidelity to the rule of law was merely an exercise in lip service to the Biden / Khan FTC. Ferguson might be the first FTC Chairman who is willing to say out loud, and without winking, that the FTC is not truly an independent agency. The second is that the Khan FTC adopted the Neo-Brandeisian / Hipster assumption that all commerce – all of it – is bad. That assumption led to all sorts of bad policy and enforcement decisions: suspending early termination, ending merger consents, procedural shenanigans to place bureaucratic obstacles in the way of transactions that do not implicate the Clayton Act. Those two differences do a lot of work. And they should.
My description of those differences and similarities with traditional conservatives, and general account of the landscape facing Chairman Ferguson, are to set the stage for the rest of today’s Competition on the Merits where we highlight some specific, thematic challenges facing Chairman Ferguson’s FTC and share our perspective on them. We will hit each of these briefly. And no doubt will come back to talk more about each as the issues unfold during the Trump Administration.
Let’s get started. Oh, and if you got this far, please subscribe, send to a friend, upgrade to paid, etc.
#1 Deregulating / Splitting the Uprights
I’ve largely described this already in this column. But here’s a whole other one if you want more. Chairman Ferguson (or whoever drafted the 1 pager laying out the successful case to appoint him as Chairman) highlights the desire to split the uprights. The document is exactly what you would expect when it comes to enforcing the antitrust laws against Big Tech, censorship, ESG, and DEI. But it prioritizes “repeal[ing] burdensome regulations” and stopping the Khan-Biden “war on mergers,” while acknowledging “Most mergers benefit Americans and promote the movement of the capital that fuels innovation.” It also emphasizes a desire to “End Lina Khan’s politically motivated investigations.” Splitting the uprights is easy to say. Harder to do. It requires both brute force and finesse, not to mention a good amount of political judgment, and a solution to a very difficult resource allocation problem. But the first step is acknowledging the goal.
Nuff said.
#2 Dealing with the FTC Morale Mess While Firing “Uncooperative Bureaucrats”
The FTC morale mess got a lot of attention. And it deserved that attention. The FTC morale tanked under Khan’s leadership, and high quality staff and management rushed out of the building. Throughout Khan’s term as Chair, complaints continued that staff and management felt marginalized, not able to participate meaningfully in their own cases, and that the Khan FTC lacked transparency between her office and staff, management, and even other Commissioners.
As I wrote with Derek Moore in the National Review at the time, my own view was that an important cause of the precipitous decline in staff morale was the constant barrage of criticism coming from Khan and allies toward the hard working staff. Khan and friends consistently blamed the FTC staff for what they perceived to be its failures over the past decades:
This explains the staff view that Khan’s FTC lacked leadership integrity:
So what does this mean for Chairman Ferguson, who has at least implicitly announced that some FTC staff (“uncooperative bureaucrats”) will be terminated? It does highlight an important set of tradeoffs to navigate. Chairman Ferguson wants to get rid of uncooperative bureaucrats that stand in the way of the FTC’s mission in a Trump Administration. That is fair enough. Good for him. Steering an agency is hard. And he should make the personnel decisions he feels necessary to direct it.
The challenge here is that staff morale actually matters to FTC output. If that feels a bit of an odd concept to you, you probably have not worked within a federal agency. Low morale means high quality employees leave too. And firing people often lowers morale. I think the keys for Mr. Ferguson here are similar to the advice I gave to Lina Khan:
It is OK to fire some staff. That happens from time to time with new FTC leadership. It is OK to tell them your agenda and what you expect from them, e.g. coming back to the office. It is good to set standards. A culture can develop inside agencies where staff view the agency as one in service to their own objectives rather than the Administration. That is a culture that needs adjustment. But it is probably more important for Chairman Ferguson than any past prior Chairman in my lifetime that he also shows up in person. Yes, in the physical sense. If you are going to fire people, reshape the agency, and take on these important challenges people should see your face. But given the trust problem between the prior Chairman’s office and the staff it will be especially important that Chairman Ferguson do this in a direct and transparent way.
The good news here for Chairman Ferguson is that the bar for success is very low given existing morale levels. Transparency and honesty in dealing with staff will go a long way towards improving morale, which in turn, will improve output.
#3 The FTC Budget Is Tight
This one is very simple. The FTC is in a budget crunch. Resources are spread thin. Always are. On top of that, the prior administration has committed resources to 6b studies, a silly set of Robinson-Patman Act cases, and more. Chairman Ferguson may well be able to fire some uncooperative bureaucrats, but it is going to be tough to bring in new personnel in large numbers. He is going to have to be creative about using existing resources already inside the building – as well as some outside – to achieve his objectives.
#4 Bringing America Back to the Global Antitrust Discussion
For the past four years, the Biden Administration has worked with European enforcers to help them target American companies, including Big Tech companies. President Trump recently criticized the EU for targeting American companies. It is hard to imagine the Trump Administration FTC or DOJ serving as a cooperative partner to European competition agencies aiming to tax American technology companies. For four years the US agencies high-fived foreign jurisdictions when they adopted weak substantive antitrust standards or weak procedural protections or skirted due process with American companies. The Trump Administration is very unlikely to allow that to continue – and that will require the FTC and DOJ to participate aggressively in international competition advocacy on issues of both substance and process. Why is this a challenge? Mostly because it involves reversing course for the Office of International Affairs at the FTC which has developed its own culture (and budget $$$) for engaging in these activities with little supervision. What the United States says matters in the global antitrust landscape as a participant in the global marketplace for ideas.
#5 Cleaning Up Khan’s HSR Merger Tax After Voting For It
This is an easy one to include on the list challenges facing Chairman Ferguson. Why? Chairman Ferguson has highlighted the Khan-Biden “war on mergers” and the importance of getting the FTC out of that war. Well, one of the most important components of that war is the New HSR Rule that imposes significant costs on every single merger, including the overwhelming majority of those that pose no threat to competition at all. So what is the problem?
Well, the problem is, to put it bluntly, both (then) Commissioners Ferguson and Holyoak voted FOR the Khan Merger Tax. They had reasons. As my column describes, they had important reasons to accept a compromise HSR deal that would water down or eliminate the worst parts of the Khan HSR Rules rather than expose the economy to them. Back then I gave their choice to accept this compromise two out of three cheers because I preferred the course of forcing Khan to vote out the HSR Rule under a 3-2 vote with two dissents that set the stage for a court battle over the legality of the rule.
Well, that challenge is coming – but now occurs in the context of a unanimously supported HSR Rule. As I wrote then:
Will Chairman Ferguson (when he gets his majority) take on the Khan war on mergers by undoing the Khan Merger Tax even though he voted for it? There was a need for compromise then. But not now. One possible solution here is that the legal challenge to the Khan HSR Rules succeeds and the Ferguson FTC won’t have to make a tough decision. Indeed, the Ferguson FTC could participate in that litigation through amicus support (from the FTC when the majority has the votes, the DOJ, or even an individual Commissioner). Another option is that the Trump FTC votes to rescind the Rule (going back to the status quo or some other modified version of it). My own prediction is that the Khan Merger Tax falls one way or another – it is simply too costly to the American economy (including Little Tech, among other sectors) to keep it there. Whether that is through legal challenge or requires FTC action remains to be seen.
#7 Navigating a Course on the Ill-Advised Robinson-Patman Act Revival
I’m going to write about this later this week. But this one is tricky! Just a month ago the FTC had voted out one Robinson-Patman Act case on a 3-2 vote with Chairman Ferguson voting no but indicating willingness to support RPA cases where the favored buyer had market power. As COTM readers know, I think these cases result in higher prices, are a tax on the economy, and especially harm poorer consumers. I also think the cases will lose in court. But I don’t get a vote!
The point is that just weeks ago the FTC had a potential bipartisan support for RPA cases – and what is more, a potential nominee (Mark Meador) who is an avid supporter of RPA cases. Even accounting for Commissioner Khan’s departure – this looks like an FTC where Chairman Ferguson would wake up every day with at least 3 votes (Bedoya, Slaughter, and Meador) for nearly any RPA case. With his own willingness to support some sliver of RPA cases I can tell you that most large retailers and consumer goods manufacturers were appropriately thinking about antitrust risk and exposure.
After the FTC voted out its lame duck Robinson-Patman case against Pepsi on a 3-2 vote, things may have changed. The Khan FTC scored an own goal here and blew up that bipartisan goodwill to revive the RPA – an accomplishment that, if it stuck, would have been a very impressive one. But alas, the Khan FTC’s politicization of an unripe RPA complaint against Pepsi changed everything. Here’s FTC Chairman Ferguson:
Again, I’ll write more about this monumental political disaster later this week, but why do I include this as a challenge for Mr. Ferguson? Well, Mark Meador can and should be ultimately confirmed (even if we disagree – strongly – on the Robinson-Patman Act). That means the FTC will ultimately have 3 Commissioners actively willing to support RPA cases (not including the Chairman). Each morning Chairman Ferguson wakes up at the FTC the votes will be there to bring RPA cases whether or not he would like to do so. It sounds like he would now not like to do so given his dissent in Pepsi. And no doubt, Mr. Meador is politically astute enough to know that voting with the Democratic majority to support an RPA case over the Chairman’s objection is risky political business. Commissioner Bedoya has done everything possible in statements and press to deliver the message that the RPA cases belong to Lina Khan and now him. Again, I absolutely do not predict that we see RPA cases voted out over the Chairman’s objection. These things do not happen early or often in Administrations. But they are not unheard of historically (veteran antitrust readers can likely recall Commissioner Rosch joining the Democratic majority against his Chairman Debbie Majoras on some key matters).
Navigating the attempted and failed – so far – RPA revival will be an interesting challenge. Not to mention the private cases that will be litigated in the wake of the Biden Administration’s RPA cases. Will the FTC participate as amici? And if so in what way?
#8 Keeping Big Tech Critics on the Right Happy When They Aren’t That Many Cases to Bring
Another easy one. The most discussed goal of those on the right that would like to use antitrust to bring Big Tech to heel for censorship is to do exactly that – bring some cases against Big Tech. Well, those cases have happened. As I’ve written:
The second obvious change has been that Big Tech has been nine ways to Sunday. Virtually every Big Tech target has been the subject of multiple antitrust suits by federal and state enforcers, even holding aside private litigation. Google has live suits targeting both its search and Ad Tech businesses, Amazon has been sued multiple times on competition and consumer protection grounds. DOJ brought a monopolization suit against Apple. Meta certainly has not escaped antitrust scrutiny. Big Tech is, frankly, up to its eyeballs in lawsuits, many which will not be resolved until well after the 2024 election. Heck, some may not be resolved by 2028. That does not mean Ferguson and Slater cannot find more! Maybe they will. In fact, I would bet a nickel that they do find some new suits. But it appears diminishing marginal returns for further large scale Big Tech antitrust suits have kicked in.
Don’t get me wrong, I expect the Ferguson FTC (and Slater DOJ) to find some cases involving Big Tech. Whether there are new conduct cases, amicus efforts of private plaintiffs, or new mergers involving large tech firms, I do not know. But the point is that the low-hanging fruit has been picked. So what does an FTC Chair (or DOJ AAG) who has promised results on Big Tech do when the cases are pending or being litigated by prior Administrations?
Obviously, it stays out of the way of the pending cases. No closing investigations here – though one might expect at least consideration of creative solutions to antitrust cases that would involve concessions on content moderation and censorship in exchange for taking the most aggressive antitrust remedies off the table.
But what else? The most tried and true FTC solution has been to take the Big Tech pound of flesh through the consumer protection side of the house with privacy and data security investigations, policy decisions, and rulemakings. That is a tried and true solution because it is a pretty useful one. The consumer protection side of the house has a lot of legal tools and flexible remedies. I would expect to see Big Tech – especially those engaging in content moderation or censorship – to be frequent fliers at the Commission on consumer protection business.
#9 Too Many Guidelines and Studies to Write, And Not Enough Pens
Another one that is easier to write about than to solve. I suppose I could have included this in the budget challenge. But the challenge here to Mr. Ferguson’s FTC is a more specific one. Namely, the FTC has over the past several years loaded up on 6b studies, new Guidelines, and rulemakings. Chairman Ferguson has pointed out in several statements how resource intensive these engagements are and the opportunity cost of those engagements when it comes to advancing the law enforcement mission of the FTC.
Well, those 6bs still exist. And I imagine the Trump FTC will want to do new ones. Commissioners Holyoak and Ferguson have criticized some of the quality of 6b studies that went out the door. I imagine they might want to do better ones and replace old ones, e.g. the PBM study stands out as one that was largely panned for using large Crayola-style headlines but no data. Perhaps they want to do new studies to advance their own positive agenda: mergers, labor markets, AI, who knows. There are a lot of topics to study. But the FTC is committed to those old studies at least until the Trump FTC finds its majority.
And did I mention Guidelines and Rules? What if the FTC wants to write new HSR Rules (see above)? Or rescind the Biden-Khan Merger Guidelines and replace them with the Trump Administration Merger Guidelines or something new? What about new Section 5 Guidelines? You get it. A lot has changed in the last 4 years and the Trump FTC will want to do a lot of rescinding and redrafting, not to mention writing to advance its own agenda.
The problem? Not enough pens. The agency is spread very thin on budget when it comes to staff dedicated to work on rules, guidelines, and 6b studies. This is a critically important part of the agency’s mission. I don’t have a clever solution to this one — but the appointments within the Office of Policy and Planning will be even more important than usual. And Chairman Ferguson may have to find some creative solutions to recruiting manpower and intellectual capital in the building to work on these projects.
#10 Non-Traditional Public Engagement
Here’s another interesting one. Go look at Chairman Ferguson’s FTC speech webpage. I’ll wait. Here’s the link. What do you notice? You might notice that there are only three speeches since he became a Commissioner. I’m sure he has given more – but there are three on the webpage. Really two since one of them is his oral remarks for the FTC Noncompete Rule. Not really a policy or agenda speech. Now go look at his X profile. I count 28 tweets under his FTC account.
Why is that interesting? Or pose a challenge? I’ll tell you why I think it is. It is for a couple of reasons actually. The first is that you’ll notice zero engagement with the American Bar Association Section for Antitrust Law. The ABA Antitrust Section is one of the primarily platforms for the old, standard antitrust bar. Commissioners get invited to places. They go, they give a policy speech or a talk about their agenda. The bar raves about them and says nice things. They all tell each other how smart they are and then everyone goes home. Don’t get me wrong — lots of the antitrust bar are indeed very smart. And many Commissioners who go to these events are too. But the point is the events are usually a sort of pre-planned, scripted affair and go on the list of “things Commissioners/ Chairmen are expected to do.”
I think Ferguson is the most “outside” the ABA Chairman or Commissioner the FTC has had. I think that is a very good thing. He’s got all of the white shoe impressive legal credentials obviously – Supreme Court clerkships do not grow on trees. He’s even worked in Big Law. But Ferguson does not appear to care about showing up at their parties. Or engaging with them more generally. Again, a very good thing in my view. And certainly a different thing. But is it a challenging thing?
I think so. Ferguson is a brilliant lawyer and he’s communicated largely the way lawyers do so: i writing. His dissents speak for themselves. They tell a tale of his legal reasoning, some of his priors, what is important to him, and what he plans to do. That’s all very good. I wrote dissents as often as anybody in FTC history because I thought laying out one’s reasoning is critically important to move debates forward. But I was just a minority Commissioner. So was Mr. Ferguson. No longer. Chairman Ferguson has a new and different role and I think it carries with it a more robust obligation for public discourse. The Punchbowl FTC Agenda document includes the line: “Businesses deserve to know what they can and can’t do.” True enough. And they can get that information in a variety of ways — agency guidance and speeches are an important source of that information. And when the agency swings from the Biden-Khan approach to rule of law (that is, to ignore it when convenient) to something entirely different, communicating with the public is more important than ever.
So that’s the challenge. Presuming Chairman Ferguson agrees about his new role requiring “more” in the way of communicating with the public about the FTC’s business, what it will be doing, and how it will be doing it – and that is just a presumption – how will he go about it? And in particular, how does he go about it without the ABA? To be clear, he might well give a speech at the ABA next week. That will be an answer to the question. That’s one possibility. But given that he has not done so to date — including at major ABA Antitrust Section events like the Spring Meeting and Fall Forum – it is not the only possible answer.
Another is that Chairman Ferguson continues to ignore traditional platforms like the ABA Section of Antitrust Law and finds his own way to communicate directly to the business community and the people he serves. That has been President Trump’s way after all. And I would not be surprised if we saw Ferguson take a similar approach. What would that mean? An event in the business community here and there, perhaps a Federalist Society speech or an academic talk at a University, and some TV appearances (Lina Khan, Rohit Chopra, and Brendan Carr have each done these quite effectively). And perhaps a LOT more tweeting is in Chairman Ferguson’s future. But I like this. I think a Chairman who communicates directly is much more effective than one who delegates to FTC press staff to issue propaganda press releases and the like. If I were a betting man I’d predict you do not see Chairman Ferguson at the Spring Meeting – though I expect him to be invited (as he should be) – but you will hear a lot more from him on X and cable delivering his message directly.
I think all of this is good. But it is also different and interesting. And it is also a new challenge for someone who has 28 tweets and 2 speeches to date! But one I expect Chairman Ferguson will overcome. It is the rest of the bar that will have to adjust to the new world.
Thanks for reading as always. I took more time than I planned off during the holidays and into the New Year getting sick and with some travel for a death in the family. So I’ve got a few columns ready to go. So we will up the pace a bit to start 2025. Please do send me comments and suggestions and criticisms as always. And do not forget to subscribe or upgrade to paid.
A Belated Happy New Year to all of you Competition on the Merits readers and I’ll see you in your inbox in a few days.