FTC Moving Forward With Trump-Compliant COPPA Rule

Speaking on the sidelines of the Free State Foundation (FSF) annual policy conference, Ferguson told us he liked Children's Online Privacy Protection Act (COPPA) rules finalized at the end of the Biden administration, but he wants to make changes (see 2501230053). Ferguson holds a 2-0 Republican majority after Trump fired Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya. The two Democrats have vowed to challenge the legality of Trump’s decision.

The commission is examining the final COPPA rule “now to make sure it complies with the president’s regulatory freeze, but I voted for the thing, so I liked it,” said Ferguson. “There are obviously things I wanted to add. I wanted to make it a little more robust, but I voted for the thing ... the rule in some form will come out.” Ferguson detailed potential changes in his concurring statement finalizing the rule update with the Democratic majority (see 2501160068).

Ferguson was asked if the Trump administration has plans to move forward with the potential rule former Chair Lina Khan initiated on comprehensive privacy. “We haven’t really looked at it,” said Ferguson. He said previously that writing privacy rules for interstate commerce is an area that “cries out for congressional intervention” (see 2503030044).

In remarks at the conference, Ferguson told FSF founder and president Randy May that Trump had the constitutional authority to fire Slaughter and Bedoya and the commission will operate with two commissioners, as that constitutes a quorum. “My job is to run the commission and protect Americans and American families.”

Ferguson cited the U.S. Supreme Court’s 2020 decision in Seila Law establishing that Humphrey’s Executor, and its FTC for-cause protections, only apply to multi-member boards that “do not wield substantial executive power.” Ferguson said if the FTC doesn’t wield substantial power, “I do not know which agency of the federal government does.” He cited the FTC’s ability to issue rules and regulate almost every sector of the economy. “I expect the Supreme Court probably will overrule Humphrey’s Executor” or find that the modern FTC renders the for-cause protections unconstitutional based on Seila, he said.

The concept of independent agencies rests largely on the assumption that commissions like the FTC are run by policy experts separated from excessive political influence, which is false, he said: “Politics and the administration of government, of course, go together. If that is true, then the American people ought to have a direct say in how their government is administered,” which is achieved through the presidential election. If the president is blocked from supervising the entire government, “that means there are parts of the government that are immune from popular control, that are immune from the will of the people,” he said. “That is the deep state.”

Bedoya told Tech Policy Press in an interview he believes Humphrey “remains good law” and he’s “looking forward to making that clear in court.” Bedoya, when asked about the comprehensive privacy rulemaking, said he’s worried the administration is going to “pare back” some of the prior regime’s regulations, including many competition-related rules. “If you care about your kids' privacy, if you care about your privacy, you need to care about the FTC's ability to stay an independent agency.”

FTC Commissioner Melissa Holyoak, speaking on an FSF panel, said she agreed with Ferguson that Trump exercised his constitutional authority in removing Slaughter and Bedoya. She also echoed his remarks about the commission’s new majority, saying Republicans can and will move forward with two sitting members. Holyoak said her job is to analyze potential violations of consumer protection and competition laws and support enforcement of those laws, regardless of the makeup of the commission.

FCC Commissioner Nathan Simington said Humphrey includes some interesting language describing the FTC as “quasi-legislative” and “quasi-judicial.” It’s possible some agencies have strayed too far in acting as de-facto legislatures or courts, he said.

These constitutional debates have lingered since the 1990s, said former FCC Chairman Ajit Pai. It seems pretty clear the FTC and FCC fall within the executive branch’s purview, but “there’s a complicated body of law that’s grown up, along with some of the practical precedents.” Agency-White House collaboration is necessary, but the two sides’ goals aren’t always aligned, he added.