Last week, President Donald Trump fired more people as part of his ongoing quest to prevent the government from doing the basic work of governing. This time, his targets were the two remaining Democratic members of the Federal Trade Commission, Alvaro Bedoya and Rebecca Kelly Slaughter, whose “continued service” Trump declared to be “inconsistent” with his agenda.
Their terminations, along with the resignation of FTC Chair Lina Khan earlier this year, mean that three of the Commission’s five seats are, at least for the time being, vacant. They also mean that only remaining members of the federal agency charged with promoting fair competition and protecting consumers from the worst excesses of corporate greed are Andrew Ferguson, the newly-promoted chair, and Melissa Holyoak, two Republicans who now can do more or less whatever they want.
Bedoya and Slaughter have promised to sue, and for good reason: Firing commissioners without cause is, to use a technical term, extremely illegal. Under the Federal Trade Commission Act of 1914, which established the agency, commissioners serve seven-year terms, and presidents may only remove them for “inefficiency, neglect of duty, or malfeasance in office.” In 1935, the Supreme Court upheld the constitutionality of these for-cause protections in Humphrey’s Executor v. United States, a case in which President Franklin D. Roosevelt tried to fire an FTC member with whom he had political differences—in other words, exactly what Trump is trying to do almost a century later. Humphrey’s Executor is basic, first-year-of-law-school stuff; if this fact pattern were to appear on a final exam, every law student would answer correctly.
Conservative activists, who abhor even modest impositions on executive power, have been whittling away at Humphrey’s Executor for years. Trump’s attempts to fire Bedoya and Slaughter, among the other independent agency heads he’s tried to dismiss of late, could be the Republican Party’s best chance yet to dispose of what remains of this annoying constraint on his authority. Already, Trump’s Department of Justice has said it won’t defend Humphrey’s Executor in court, which is roughly the equivalent of holding up a giant sign outside Brett Kavanaugh’s house that says “PLEASE OVERTURN ASAP.”
But Trump wants to do more than generate yet another test case to get the Court’s conservative supermajority to get rid of yet another legal precedent the Republican Party doesn’t like. Since President Joe Biden appointed Khan, then a 32-year-old antitrust lawyer, as the FTC’s youngest-ever chair in 2021, conservatives have portrayed the Commission as an anti-capitalism supervillain, bemoaning its insistence on burdening virtuous corporations with onerous regulations that snarl the beautiful, frictionless operation of the free market. Firing Bedoya and Slaughter is one of Trump’s many gifts to his plutocrat backers. If upheld in court, their terminations will make it easier for corporations to rip you off, and less likely that the government will do anything about it.
Congress formed the Federal Trade Commission in response to the explosion of corporate power in the late 19th and early 20th centuries, and charged the agency with preventing “unfair methods of competition,” and “unfair or deceptive acts or practices in or affecting commerce.” The FTC publishes rules defining what practices, exactly, qualify as “unfair or deceptive,” and can sue companies that violate those rules. The rationale is simple: A basic premise of the U.S. economic system—the notion that competition is good for everyone—unravels quickly when deep-pocketed players are free to jack up prices, suppress wages, squeeze out small businesses, defraud their customers, and otherwise manipulate the market.
The FTC hasn’t always lived up to its lofty promises. But Khan was far more aggressive than her predecessors about prosecuting anticompetitive practices, especially with respect to Big Tech, which had remained several steps ahead of a dated regulatory infrastructure ill-equipped to tackle all the ways that modern Silicon Valley behemoths grind competitors into dust. Under her leadership, the FTC brought high-profile lawsuits against Amazon and Meta, and reached a $150 million settlement with Twitter over alleged targeted-advertising privacy violations. When announcing a lawsuit against Amazon, which the FTC accused of squeezing third-party sellers on the platform while promoting its own products, Khan declined to rule out trying to break up the company or holding executives personally accountable for the alleged misconduct.
Other aspects of the FTC’s work had a more direct impact on consumers’ day-to-day lives. The agency passed a rule requiring companies to make it as easy to cancel subscriptions as it is to sign up, thus ending the days of desperately scouring Reddit for the number to an unlisted phone line that no one ever answers. Another rule requires sellers to disclose all those previously hidden “junk fees” that had a funny way of inflating ticket prices and vacation rental rates well beyond the advertised price. Perhaps the FTC’s most significant recent accomplishment is a ban on the enforcement of noncompete agreements, which would free millions of employees to leave their jobs without fear of retribution, and by one estimate would raise wages by $300 billion per year. Corporate interests quickly challenged the rule, which is temporarily on ice as the case winds its way through the federal court system.
Khan’s tenure earned plaudits from some politicians you might expect (Elizabeth Warren, who thanked her for “showing what it looks like for the government to work for working people”) and some you might not (JD Vance, who opined that Khan was doing “a pretty good job” in February 2024). But she infuriated the donor class, including the usual suspects on the right—the Wall Street Journal alone has published more than 100 editorials, op-eds, and letters criticizing her—and even some well-heeled Democratic fundraisers who’d grown accustomed to permissive antitrust enforcement. The FTC, like the Consumer Financial Protection Bureau, its analog for the banking and financial services industries, became reviled in boardrooms for doing the work of protecting normal people in this country at the expense of its oligarchs.
Things, to put it mildly, have changed since Trump’s re-election. After Khan stepped down, Trump elevated Ferguson, whom the Senate confirmed as a commissioner in 2023, to replace her. A former Senate staffer who worked on both of Trump’s first-term impeachment defenses, Ferguson lobbied for Khan’s job by pitching himself to the White House as a Trump loyalist who would “stop Lina Khan’s war on mergers,” “end Lina Khan’s politically motivated investigations,” and thwart the “anti-business, anti-innovation agenda of the radical left.” He also said he would “fight back against the trans agenda,” because a prerequisite for getting Trump’s attention is promising to inflict pain and suffering on members of a marginalized group.
People whose outsized wealth and power felt threatened under Khan seem determined not to face such a nightmarish future again. Elon Musk, Jeff Bezos, and Mark Zuckerberg, whose companies have tangled with the FTC in recent years, are prostrating themselves at Trump’s feet, writing seven-figure checks for his inauguration or, in Musk’s case, nine-figure checks in support of Trump’s 2024 re-election bid. It is not a coincidence they are doing so as the FTC seeks Zuckerberg’s testimony next month in its antitrust lawsuit against Meta, and prepares to take Amazon to trial this year over allegations that the company trapped customers in Prime subscriptions that were especially difficult to cancel. In an interview in January, Khan said she hoped the incoming administration would not offer a “sweetheart deal” to the tech executives cozying up to the president, but recognized that the matters were out of her hands. “I can’t predict what future people in my position are going to do,” she said.
Bedoya and Slaughter, the fired commissioners, have what feels like a pretty airtight case: a near-century-old Supreme Court precedent that protects their jobs through the end of their respective terms. Khan is backing her former colleagues, framing their “blatantly illegal” firings as evidence of the White House’s enthusiasm for selling out consumers to the highest bidder. “If what we care about is freedom, and making sure that Americans enjoy real liberties, allowing big corporations to abuse people—to bully them, to coerce them—is so antithetical to that idea of freedom,” she told MSNBC’s Ali Velshi earlier this week.
But precedent is only as useful as long as five justices are willing to uphold it, and this Supreme Court has functioned mostly as a rubber stamp for exercises of executive power, as long as the executive is Donald Trump. An eventual Supreme Court decision that empowers presidents to fire independent agency heads would further empower corporations to consolidate power and exploit regular people. In the meantime, Bedoya and Slaughter’s absence from the Federal Trade Commission will allow the Trump administration to get a nice head start.
No comments