Trump Fires Democrat FTC Commissioners, Presaging Big Tech Policy Shifts

Analysis In a surprise Tuesday move, US President Donald Trump fired the two remaining Democratic commissioners at the Federal Trade Commission, potentially accelerating a shift in the consumer and competition watchdog's stance towards tech and other businesses.

Trump axed Alvaro Bedoya and Rebecca Slaughter, leaving the regulator with just two commissioners instead of its usual five. The remaining commissioners - chairman Andrew Ferguson and Melissa Holyoak – are both Republicans who have previously articulated positions that suggest change could come to policy on four matters of interest to the tech community: Non-compete agreements; the right to repair; regulation of social media companies; and mergers.

The FTC last year voted to ban non-compete agreements; Holyoak and Ferguson dissented.

"I am sympathetic to those who feel stuck in a job because a non-compete prevents them from seeking other opportunities," Holyoak wrote [PDF] at the time in a statement that Ferguson joined – law-speak for co-signing a document.

"But I am equally sympathetic to the small business owner who invests in her new employees, just to watch the employee walk away to her biggest competitor with valuable training and trade secrets."

I am sympathetic to those who feel stuck in a job because a non-compete prevents them from seeking other opportunities. I am equally sympathetic to the small business owner ...

The pair argued that a blanket ban on non-compete agreements ignores specific circumstances that sometimes make them necessary. If they are able to take the FTC in that direction – more on that later – tech firms may find it easier to create and enforce non-compete, which could impair labor mobility.

Another tech-related issue the two have tackled is the right to repair, which came to their attention in the lawsuit against tractor maker John Deere. The FTC ruled that by refusing the right for farmers to repair machinery they had purchased, Deere monopolized the market for fixing farming equipment.

Holyoak and Ferguson again dissented.

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"The repair market is extremely complicated, comprised of a web of authorized dealers, independent repair shops, customers, and parts manufacturers," they wrote [PDF] at the time. "The commission staff has worked diligently to understand the market, but to date we simply do not have the evidence to file this complaint with any real confidence of our ultimate chance of success."

Social media companies - or some of them at least - are also in Ferguson's as he has expressed an interest in antitrust investigations against social networks to make sure they won't overly or unfairly censor speech.

Both Holyoak and Ferguson have voted to allow large mergers, a position at odds with the commission’s direction under the Biden administration during which the regulator tried to encourage more competition. However, the pair sometimes supported Democratic commissioners - suggesting they won’t initiate a merger frenzy in tech or any other sector.

Is any of this legal?

It is far from certain that Tuesday’s events mean Holyoak and Ferguson will be able to reshape the FTC. In 2023 an FTC spokesperson reportedly said the org can make rulings with only two commissioners.

Government oversight org Sensible Safeguards asserts, however, the org does not have a quorum.

The administration could appoint more like-minded commissioners to ensure it has a majority, a move that would not be out of kilter with conventions that see the regulator appoint three commissioners from the party of the incumbent President.

The President just illegally fired me. This is corruption plain and simple

There’s no sign of such appointments. Ferguson has already insisted the dismissal of Slaughter and Bedoya was legal because Trump has the executive power to do so.

A 1935 Supreme Court case, Humphrey's Executor v. United States, may come into play here. The top court ruled that FTC commissioners could be removed by the President for "inefficiency, neglect of duty, or malfeasance in office." Out of the three, the first two could be twisted to apply to anyone the commander-in-chief of the day doesn't like or want.

It's all par for the course. Since resuming office, Trump has fired regulators at the Privacy and Civil Liberties Oversight Board, the Equal Employment Opportunity Commission, the Federal Election Commission, and the National Labor Relations Board. Lower courts have often ruled those firings were illegal, and the administration has indicated it intends to challenge those rulings and test the limits of executive power.

Slaughter and Bedoya regard their dismissals as improper.

"I am a commissioner at the Federal Trade Commission. The President just illegally fired me. This is corruption plain and simple," wrote Bedoya.

"The FTC is an independent agency founded 111 years ago to fight fraudsters and monopolists, our staff is unafraid of the Martin Shkrelis and Jeff Bezos of the world. They take them to court and they win. Now, the President wants the FTC to be a lap dog for his golfing buddies."

The President wants the FTC to be a lap dog for his golfing buddies

Slaughter was equally forthright and accused the President of being unwilling to listen to criticism. She said that firing herself and Bedoya would harm citizens and leave the Trump administration unrestrained.

"The administration clearly fears the accountability that opposition voices would provide if the President orders Chairman Ferguson to treat the most powerful corporations and their executives – like those that flanked the President at his inauguration – with kid gloves," she said in a statement to the media.

Advocacy organization Consumer Reports criticized the sackings.

"If an administration can remove commissioners at will, the FTC will be less thoughtful, less effective, and more subject to the whims of politicians and industry lobbyists," said Justin Brookman, the org’s director of technology policy, in a statement to The Register.

"Simply put, this action jeopardizes the legitimacy of the agency. We call on Chair Ferguson to renounce today’s decision, and for the White House to immediately reinstate commissioners Bedoya and Slaughter." ®

PS: Biden-appointed Geoffrey Starks, one of two Democrats on the FCC, will step down this spring, leaving the regulator with two Republicans, one Dem, and one vacancy at the top. His term was supposed to run to 2027.