FTC’s Independence Questioned After Trump Executive Action

Trump on Tuesday issued an EO directing the FTC and other “so-called independent” federal agencies and executive branch entities to submit proposed and final regulatory actions to the White House's Office of Information and Regulatory Affairs (OIRA) for review prior to Federal Register publication.

Trump said “it shall be the policy of the executive branch to ensure Presidential supervision and control of the entire executive branch.” Previous administrations “have allowed so-called ‘independent regulatory agencies’ to operate with minimal Presidential supervision,” the EO said. “These regulatory agencies currently exercise substantial executive authority without sufficient accountability to the President, and through him, to the American people.”

The EO is duplicative of current rulemaking oversight for federal agencies and could result in legal uncertainty for companies following statutes like the FTC’s Children’s Online Privacy Protection Act (COPPA), senators and legal experts told us.

The Administrative Procedure Act already provides for executive branch review of agency actions, said Sen. Elizabeth Warren, D-Mass. Trump “seems to be going for a big show but not actually following the law, and what he hopes to gain is unclear in this one,” she said.

A former senior FTC staffer noted that “major” FTC rulemakings with an economic impact of more than $100 million are already subject to review by OMB and Congress. “There’s already oversight currently,” said Mary Engle, BBB National Programs’ executive vice president-policy and former FTC Advertising Practices Division director. A lot of the EO’s impact will hinge on guidance from OMB and how federal agencies are told to execute decisions moving forward, she said. It could mean the federal bureaucracy moves slower, which “may or may not be a good thing, depending on your perspective,” she said.

“These agencies have particular missions, and we want to see” the FTC fulfill its mission of “protecting consumers and on antitrust” enforcement, said ranking member Maria Cantwell, D-Wash. “The confusing thing about the Trump administration is they act like they're doing something for the public good, when in reality, they're billionaires over there who are looking at trying to get access to things that are really conflicts of interest for them. So, it's not about cutting money.”

House Commerce Committee ranking member Frank Pallone, D-N.J., in a statement, called the EO a “gross abuse of power that would shatter the independence of these agencies and expose Americans to safety risks, higher prices, and more frequent scams.”

Senate Judiciary Committee ranking member Dick Durbin, D-Ill., said he hopes congressional Republicans will join Democrats in asserting their constitutional authority and not “give into every extreme position [Trump] takes.”

However, Sen. Rick Scott, R-Fla., said White House involvement in agency rule deliberation is justified: “That’s what the president ought to be doing.” He noted that when he was governor of Florida, his administration reviewed government rules and “tried to get rid of as many regulations as I could.”

“It’s completely appropriate and well past time to do these things,” said Sen. Ron Johnson, R-Wis. “[Trump] was elected to shake up the government, to literally be a disruptor. That’s what he’s doing. Again, I support his efforts. This can’t go on. Government is destroying our lives.”

Center for Democracy & Technology CEO Alexandra Reeve Givens said in a statement that agencies like the FTC and FCC have been independent for a century for a reason: “Congress needs these experts to interpret the laws it passes, and to initiate investigations and enforce those laws without political favoritism.” Forcing agencies to “bow to political winds will lead to worse decisions and to regulatory whiplash as changes in administrations mean significant, unpredictable changes from a meddling President.”

The EO goes hand-in-hand with the Trump administration’s broader attempt to exert control over federal bureaucracy, most notably DOJ urging the U.S. Supreme Court to reverse Humphrey’s Executor v. U.S. (see 2502130050), said TechFreedom President Berin Szoka. “I don't know a single administrative lawyer who actually expects the Supreme Court to uphold removal protections for multi member agencies like the FCC and the FTC,” Szoka said. That’s an issue because “Congress has been delegating vast amounts of authority to these agencies for years on the assumption that these commissioners would act independently and would be protected from political meddling.”

Those protections breaking down could have implications many aren’t considering, said Szoka. The agreements between the U.S. and Europe over digital privacy and personal data were premised on the idea that the agencies implementing data protection in the U.S. were independent, he said. “That entire agreement is now going to fail."

While some may seek to challenge the EO in court, doing so could be problematic, attorneys and academics told us. It is difficult to determine how an entity would have standing to challenge it, said American University administrative law professor Jeffrey Lubbers. It could require the head of an independent agency to challenge the matter, or possibly an entity affected by an FTC or FCC rule that was vetoed by the White House, said Lubbers.

The EO “puts more power in the executive’s hands for something that really is Congress's responsibility,” said University of Idaho administrative law professor Linda Jellum.

“The ball is in Congress’s court” to challenge the EO, Lubbers said. “Congress should be up in arms saying, 'Hey, you're stepping on our toes here.'”