Members will have five legislative days with which to revise and extend their remarks and insert extraneous material into the record. I now recognize myself for an opening statement. I'd like to thank Chairman Ferguson for being here today and his leadership over the last several months. The Federal Trade Commission plays an important role in promoting marketplace competition and protecting consumers. Ensuring robust competition is vital to fostering economic growth while also lowering costs for all Americans. Over the last several years, under previous leadership, the FTC routinely strayed from its core mission and stretched the limits of its statutory authorities. I'm encouraged by the commission's renewed focus and direction under your leadership. Advances in technology and the emergence of artificial intelligence have presented new opportunities and challenges for businesses and consumers alike. American innovators are at the forefront of these major technological advances. While regulators have a responsibility to maintain common sense guardrails, they should do so in a way that does not stifle innovation and force good paying jobs overseas. The FTC spending level for fiscal year 2025 was held flat from FY2024 at $425.7 million. Despite that flat funding for the last two fiscal years, the commission faces rising costs for expert witnesses, infrastructure, and technology. Furthermore, the recent passage of the Take It Down Act requires the FTC to deploy additional resources to crack down on the publication of non-consensual intimate images, including those generated by AI. I look forward to hearing more about the commission's implementation of this important piece of legislation and the additional resources that will be required. Chairman Ferguson, you have described the Federal Trade Commission's role as a cop on the beat. Like police officers, the commission has the responsibility to enforce the law fairly without bias or prejudice. The American people deserve an FTC that sticks to its core mission of promoting competition and preventing fraud in the marketplace, providing regulatory certainty and predictability to the private sector, will spur economic growth and benefit all Americans through affordable prices. I look forward to hearing from Chairman Ferguson about his vision for the commission and the resources that will be required to execute on the Federal Trade Commission's mission. I now recognize the ranking member, Mr. Hoyer, for his opening statement.
Thanks, Mr. Chairman, very much. Welcome Chairman Ferguson to the committee. I want to thank you for the work that you have done and you are doing. You had a very extensive statement, footnoted more than any other statement I think I've read for an opening statement. I thought I was reading a law brief. But having said that, it was very comprehensive. But one of the things I noticed in it, and I say this at the outset, well, I'm going to ask questions later. I'm going to be going in and out. It has nothing to do with your testimony. It has to do with we have two hearings going on at the same time. One of my top priorities, Mr. Chairman, as you know, throughout my time in Congress has been making our workers, our businesses, and our entire economy more competitive. That's why I as majority leader started the agenda that I call Make It in America, which obviously is a double entendre. People came to America to make it, to succeed, but also the way we're going to succeed better is to make it, whatever it may be, in America. We're moving towards that effort, but as you point out in your statement, it can be a self-defeating effort the larger one enterprise gets and other enterprises are left by the wayside. Many of the historic bills we passed in the 117th Congress, including the CHIPS and Science Act, the Bipartisan Infrastructure Law, and the Inflation Reduction Act were designed to promote competition and to grow manufacturing and our science research in America. That's the objective we ought to all share. If you support innovation, if you support growth, if you support development, then you have to support competition. I tell my Democrats, if you want to be pro-worker, you need to be pro-employer. Both need to be in equilibrium. Both have a role to play and both need a referee. You talked about cop on the beat, referee. If you recognize the importance of the free market, as I do, then you have to recognize how crucial it is to keep it free and keep it a market. The FTC is essential to that mission to promote fair competition and protect American consumers. It breaks up monopolies that inflate the price of everything from groceries to gas to healthcare. It protects Americans from scam calls, fraud, and unfair business practices. It stands up for Americans' privacy rights going after businesses that misuse or fail to secure their personal data. One thing I may just, it ticks me when I get advertisements that I don't ask for on this device which I own. I don't know whether there's a solution to that because obviously they got to pay for the product they give me in quotes. But that's a particular concern I have you may pay attention to. The FTC needs to maintain public trust and credibility to do this vital nonpartisan work. Now, I mentioned nonpartisan work. What I was starting to say, let me say I notice at least three times in the opening sort of synopsis of your statement that you use the term the Trump Vance FTC. I was caught by that because I don't see that very often in statements that are made. Actually, it's America's FTC. Now, you're appointed. You're a Republican. I'm a Democrat, so we have different points of view, but we need to make sure the agenda of the administration really needs to be in this case from your perspective, the agenda of what the FTC is intended to do. Now, we may have differences on that, but I would urge you to do it in as nonpartisan a way, and frankly, I urge your predecessor to do the same thing. There would be different views as to whether that was accomplished. The FTC needs to maintain public trust and credibility as I said and that will help. I think that's why the agency has always been independent. I'm deeply concerned by this administration's efforts, frankly, to undermine not only the independence that naming it the Trump Vance FTC would imply, but it also seems to me creeping into almost everything we do where so-called non-loyalists are being fired. They need to be loyal to the country and to the oath that we all take to the constitution, the laws thereof, not to any individual or group of individuals. In March, Donald Trump violated 90 years of Supreme Court precedent when he fired two Democratic FTC commissioners without any legal cause, which under the law is required. Those two commissioners are challenging that action in court. I hope they win. And if it's anything like the dozens of other cases we've seen in the past four months, I believe the courts will likely rule against the administration. Nevertheless, the Trump attempt to politicize the FTC ought to concern us all. So should the reports that Elon Musk and his DOGE agents may be able to access sensitive financial data the FTC's compliance on American businesses including Musk's competitors. That is the opposite of the FTC's purpose and we must not let it happen. Democrats and Republicans need to come together to protect this vital institution and ensure it has the resources it needs to keep serving the American people. I thank FTC Chair Ferguson for joining us today and I hope that he can address some of these concerns and speak to the importance of this funding. The American people are counting on the FTC and the FTC is counting on this committee. Thank you very much, Mr. Chairman.
Thank you, Mr. Hoyer. Today, we welcome the testimony of the Honorable Andrew Ferguson, chairman of the Federal Trade Commission. Chairman Ferguson, without objection, your full written testimony will be entered into the record. With that in mind, we ask you to please summarize your opening statement in five minutes.
Thank you, Mr. Chairman, ranking member Hoyer, members of the subcommittee. I'm Andrew Ferguson, chairman of the Federal Trade Commission, and I'm pleased to appear before you today to testify about the FTC, its competition, and consumer protection priorities and how we are restoring the agency's financial health and public credibility. I'm also pleased to be joined by our newest commissioner, Mr. Mark Meador. I was profoundly honored when President Donald J. Trump appointed me to lead the agency in January. President Trump's resounding victory in the 2024 election has given him a broad mandate to restore our economy. Restoring our economy requires a dynamic business environment characterized by increasing innovation, wages, productivity, and growth. The fruits of such an economy must be enjoyed by all Americans, particularly the backbone of our economy, our workers. Vigorous and effective consumer protection and competition law enforcement is key to facilitating a dynamic pro-worker economy. And I'm honored to be the chairman of the FTC under President Trump and to help drive this pro-growth, pro-worker agenda. I am also honored to run an agency that is filled with lawyers, economists, investigators, and professional staff who are tirelessly dedicated to the rule of law, to promoting competition, and to protecting consumers. They are the lifeblood of the FTC and we owe our success to them. We also confront challenges. Poor management decisions made by the previous administration have spread our resources thin. Thankfully, the measures we have taken to restore fiscal health to the FTC align with the president's directives to ensure that the agency is operating as efficiently and effectively as possible in the fulfillment of its mission to protect American people from monopolies and frauds. I resolutely believe in the mission of the FTC. No economic system in history has promoted the common good more than the American free enterprise system. No economic system has contributed more to human flourishing. But our free enterprise system promotes the common good of all Americans only if we protect it from anti-competitive business practices, anti-competitive consolidation, and fraud. Without vigorous enforcement of our competition and consumer protection laws, our free enterprise system would benefit only the wealthy and the corrupt. For that reason, the Trump Vance FTC has gone back to the agency's roots. Vigorous enforcement of the law is our focus. Congress established the FTC to be a cop on the beat for our markets, not to make the rules. We enforce the laws that the people through their representatives in Congress have decided best promote competition and fairness. We investigate wrongdoing and if we believe violations of the law are taking place, we bring lawsuits. If we don't, we get out of the way and let markets promote innovation and growth. We seek to protect competition and combat fraud through vigilant, fair, and thorough investigations and litigation where necessary. The FTC is here to defend our free enterprise system and make it work for everyone. We want to protect Americans when they shop for groceries, when they go to the hospital, and when they speak online.
My written testimony discusses in more detail the FTC's important work to protect US consumers and competition as well as a brief overview of the FTC's budget, resources, and cost-saving endeavors. Today, I will briefly highlight some of the agency's major recent activities and initiatives. We are focused on protecting Americans in the markets that affect them the most. That is why we have focused substantial resources on protecting Americans online. We have ongoing competition litigation against major big tech platforms under both the consumer protection and competition laws. Focused on healthcare markets, the first major competition action undertaken by the Trump Vance FTC was to enjoin a merger of medical device manufacturers that the commission alleges would have increased the prices of medical devices used by millions of Americans. I'm deeply concerned by the increasing prices across all of our healthcare markets. The FTC will do everything that it can to ensure that prices in healthcare markets are the product of vigorous competition and that our health care markets are free of deception and unfairness. We're also going beyond our law enforcement efforts in the health care space by using our Section 6(b) authority to examine the operations of the nation's pharmacy benefits managers, an industry that manages nearly 95% of all prescription prescriptions filled in the United States. As part of that probe, the FTC issued interim reports in July 2024 and January 2025 on PBM markups of specialty generic drugs. There's still much work to be done on this report and I have made completing this report quickly and thoroughly one of the FTC's highest priorities. I look forward to presenting it to Congress when it is completed.
We continue to focus on protecting vulnerable Americans from scams and frauds. The FTC has a long and proud history of protecting elderly Americans, veterans, and their families from scams and frauds through both education, outreach, and vigorous law enforcement. We're not taking our foot off the gas on that front. Similarly, protecting the vulnerable requires us to protect our children and teens as well. We are implementing an updated rule on the Children's Online Privacy Protection Act and we'll be hosting a workshop entitled The Attention Economy: How Big Tech Firms Exploit Children and Hurt Families. This event will bring together parents, child safety experts, and leaders from across the federal government to discuss how big tech companies impose addictive design features, erode parental authority, and fail to protect children from exposure to harmful conduct. I look forward to hosting that in less than a month. Again, thank you for the opportunity to testify about the priorities of the FTC. We look forward to continuing to work with this subcommittee and with all of Congress and I'm happy to answer your questions.
Thank you, Mr. Chairman. I now recognize myself for an initial question. Chairman, under the Biden administration, the FTC took an aggressive and unprecedented approach to enforcement and rulemaking. The commission stretched statutory authorities and at times took a hostile view towards mergers and acquisitions. Under your leadership, how will the FTC make a different approach going forward or will you take a different one? And if yes, how?
Mr. Chairman, I agree with you. I think that the FTC under the previous administration had a bit of an ideological bent against mergers and acquisitions and my view is that mergers and acquisitions are a very critical part of how the economy grows and how we get innovation. Founders, innovators need access to capital and people will not invest in new ideas if they can't get their investments back and mergers and acquisitions is part of how capital flows to innovators and innovators get their new ideas to us in the marketplace. So M&A is very important. At the same time, protecting Americans from monopolies and from anti-competitive conduct is very important and that's our job. So I see it as the FTC's mission is to serve as a cop on the beat in the M&A space. If we think that a deal is anti-competitive and we think we can win in court, we're going to go to court. And if we can't, we're going to get out of the way and we're going to get out of the way quickly. Congress set timelines by which we're supposed to examine M&A activity and we're going to stick by those timelines. That's on the front end. On the back end, a big change is that we are open to merger remedies at the FTC. My colleague Gail Slater at the Department of Justice has said the same thing. The previous administration prohibited remedies as a way to address anti-competitive conduct that didn't require blocking a whole merger. We are open to remedies negotiations with parties. The remedies have to be real. They have to be enforceable and we have a strong preference for structural remedies over behavioral remedies. But in order to make sure that we are preventing as much anti-competitive conduct as we can, we have to recognize that sometimes we can eliminate anti-competitive features of mergers without blocking the whole thing, and we have to be open to doing that. So on the M&A front, those are the biggest differences between the previous administration and the current one.
Are there any specific enforcement actions or rulemakings that you're looking to reverse?
We tend not to discuss the deliberations on that stuff. I wrote lots of dissents in the previous administration on both rulemakings and enforcement actions. And one of the things that we did when President Trump was sworn in is that we did not accept on faith the lawfulness, reasonableness, or the prudence of any ongoing enforcement matter or investigation and are conducting our own review top to bottom of everything that we inherited. If we think it's unlawful, if we think it's a poor use of agency resources, if we think it's inconsistent with administration priorities, then we will take steps to eliminate it, to change it, to align it with the law. If we don't, we will continue it. But particularly given that the FTC at the end of the Biden administration raced a huge amount of material out the door, we're conducting a thorough review and as we find things that we think are either unlawful or inconsistent with administration priorities, we will be changing them.
Complex antitrust cases such as the proposed Kroger Albertsons merger have required the FTC to spend millions of dollars on expert witnesses and data storage and analytics. How much does the FTC spend on expert witnesses and data analytics each year? And are these growing costs inhibiting the commission's ability to bring and successfully try antitrust cases?
It is not inhibiting our ability to do it, but it is a serious challenge that we're confronting. So we have a Bureau of Economics at the commission with some of the country's most talented economists. They do unbelievable work both at the investigative stage and at the litigation stage. We could not do our enforcement work without the Bureau of Economics. But a lot of our cases, not just big tech cases, a lot of our enforcement matters require us to onboard massive amounts of data in order to investigate potential wrongdoing and proceed to litigation where appropriate. And we don't currently have the infrastructure to house, maintain, and access those data in a meaningful way. So we end up paying vendors a lot of money to do that for us. We ran a pilot program at the end of the previous administration on ways to reduce those costs by bringing some of that infrastructure internally. It was very successful. We've been working with other parts of the government to expand that pilot and make it programmatic at the FTC. On the expert front, you're right. Expert witnesses are expensive. Even with our very talented economists in the Bureau of Economics, we often have to hire industry specialist experts from outside the agency. We are imposing budgeting requirements within the agency for the first time as far as I know in the agency's history to make sure that at the outset of litigation, everyone knows what the agency is willing to spend and we constrain the agency to spend only those resources on litigation. That is going to help save us a lot of money by avoiding the ballooning problem at the end of litigation we've had in the past.
Thank you. The chair now recognizes the gentle lady from Washington, Mrs. Gluesenkamp Perez, for five minutes for any questions she may have.
Thank you, Mr. Chair. And thank you, Chair Ferguson, for being here. I appreciate the work you're doing and you know, before coming to Congress, you might know I ran an auto repair and machine shop and care deeply about a level playing field for small businesses. That is how we build wealth in this country, is a diversity and a level playing field. I think it's a lens of being pro-business and antitrust. And one of the things that I've heard in your testimony is about the expert witness testimony, but I've also had questions about how many people on staff in your department that don't have a college degree because any of the mechanics I know could point to, you know, a headlight assembly and tell you that there's an issue going on when you can no longer replace a single light bulb and you have to do the entire assembly for $700 where we used to do it for three. And it's these kinds of things in the lens of I think experience of like what is important to people. There are big arguments and then there are the kind of the things that make or break a household budget and those things I think are often best informed by having a plurality and a diversity of experience. And so I'm wondering how you are choosing to balance the credentialing of your team.
So I agree with you that having diverse experiences and viewpoints is super important for the FTC to do its work. I think for all government agencies there is an unfortunate bureaucratic impulse to sort of look only inside the beltway, interact only with the interests that have inside the beltway presences, and that generally small and medium-sized businesses will suffer as a result because they are the ones that can't go to the lobby shops in Washington and inundate Congress and the executive branch with lobbyists. So, I certainly agree with you. We're a law enforcement agency and almost all of our work winds up in court, which means we end up being very lawyer heavy. We hire from law schools all across the country, even on the commission itself. We have two commissioners who graduated from state schools. The previous administration had focused a little heavy on the Ivy Leagues for commissioners. I went to a state school. One of my colleagues went to a state school. We're from all over the country. That lends itself to diversity of experience and make sure that we don't get tunnel vision from within the beltway. So I agree with you. It would be very easy to lose focus on the things that matter to Americans on the ground around the kitchen table without a diversity of experience and that is important to me at the FTC.
Yeah, I think, you know, there's been arguments about needing a larger budget to be able to expand the staff, but I think it is about the prioritization of who deserves a seat at the table and identifying and prioritizing the experiences. One of the things that I've been looking at, you know, my washing machine's from 1987. But a lot of the newer ones it's like they're playing Tchaikovsky and they don't last more than six years and there's very clear design issues why that's happening. Having more information as a consumer about what the expected life expectancy, what the annual maintenance costs, those kinds of ways to get at not building more agency, more bureaucracy, but saying let's, people just deserve the right to have more clarity of information. And would certainly appreciate your support in identifying some planned obsolescence strategies as well as obfuscation of the durability of a given product. Might be your thoughts on that?
I'd love to work with you on it. Look, the FTC's most important consumer protection mission is preventing deception. And deception under Section 5 is not just straight out lies. It's also omitting things that would be important and material to a consumer before he or she decides to purchase something. And misrepresenting either intentionally or through omission the lifespan of a product is potentially a problem. So, I'm more than happy to work with you on that on industries where you think that's a particular problem and require our focus.
Not often but sometimes. Yes.
Yeah. You know about the issue with the ice cream machines.
I am aware that it is sometimes difficult to get a McFlurry when you want it.
Well, I've appreciated the work that has happened to ensure that people who are buying equipment have the right to fix it. Whether we're talking about a car, an ice cream machine, I think there's some very embedded paternalistic attitudes towards who has the right in the agency and what a material environmentalism, an applied environmentalism is in making things that last longer and having clarity for the owners. This tort law goes back to the 1400s. You bought it, you have the right to fix it and maintain it. And I'm hoping that we are seeing a continuation of that and a seriousness of building wealth and economic self-determination in America.
My grandfather had a Ford tractor from the 1950s with which he tinkered up until his death. So I, and I grew up in a farming community. So I understand particularly to farmers the importance of being able to repair your equipment without having to go back to the manufacturer. We have an ongoing case against John Deere on this issue. This is also an issue that the states have started to address legislatively. I know that there have been legislation Congress has passed on this front, other legislation considered. In so far as preventing someone from repairing violates Section 5, we are prepared to enforce it. We also want to recognize that generally the best approach to problems is to let the people's representatives both in the state legislatures and in Congress address it first and so we don't want to sort of interfere with those efforts but this issue is important to me. I grew up around this issue. I hear you loud and clear.
Thank you. Chair now recognizes the distinguished gentleman from Arkansas, Mr. Womack.
Thank you, Mr. Chairman. And Mr. Chairman, welcome. You're a breath of fresh air. I got to say that in my words, in my strong opinion, the last administration was more agenda-driven and in listening to your testimony this morning and then in our private conversation, you seem to have the view that your job is like that of an umpire or a referee to make sure that you are holding the people and the institutions that are subject to your purview accountable. And again, my words, certainly not yours. And so it's from that standpoint that I think you're on the right course of getting the FTC back to the nuts and bolts, the blocking and tackling if you will of what the commission was set up for. I do have a question about budget though. When we had our conversation, and these are appropriators up here so it's our job to fund the discretionary side of government and yours is part of that. We don't have clarity right now and we need clarity. My assumption is, and I want to be clear that it's just an assumption, that there will be many agencies that will be facing some budget adjustments, some cuts if you will. And where is the FTC right now with regard to the prospect of having to settle for less and be able to continue to function as a reputable institution within the government?
The agency that I inherited even at current funding levels was in a very difficult position. The previous administration had hired employees at levels far beyond what we could afford.
Would you call it bloated?
It was bloated. There was like a two-year hiring spree that got us to levels that we couldn't sustain. And so it was important to me coming in as chairman to sort of make the difficult decisions necessary to restore fiscal health to the agency. And so as the president has, consistent with what he ran on in the 2024 election, oriented the government towards efficiency and being no larger than necessary to carry out its critical missions for the American people, we were already well underway on getting the agency down to a size consistent with what this body had appropriated us. And so we were sort of ready to go on that front, consistent with the president's agenda as well. We've been conducting a thorough review of our contracting. We've already reduced contract spend for this fiscal year by more than $6 million. So we are positioned. We also, as I discussed earlier, are undertaking steps that we are very optimistic about that will over the course of the next several years shrink the amount of money we have to pay outside vendors to house our data in some of our big and important investigations and litigations. So, we are well on our way to being prepared for whatever budget this committee decides to appropriate for the FTC.
You know, that runs counter to what a lot of agency heads would suggest. They need more money. They need more people. They need more resources. It sounds to me like you feel like the FTC can do its job.
And that's a testament to the FTC staff. I would put the FTC staff up against the staff of any agency, civilian or federal, in the federal government. And whatever this committee decides to appropriate to the commission, American consumers will be protected by our staff.
Good. In the president's executive order, agency heads in consultation with the FTC chair and the US attorney general complete a review of all agency regulations under their rulemaking authority and determine which rules create anti-competitive barriers. How do you plan to execute antitrust enforcement in recognition of this particular executive order?
President Trump has put out a bunch of amazing executive orders. I'm not sure I'm as excited about any of them as I am on this one. So, when we talk about competition in America, we generally think about monopolies and consolidation and price fixing, which is appropriate. But one of the biggest obstacles to competition, particularly to small and medium-sized businesses, is regulation. And, you know, I worked on the hill, I've seen it in action. I've worked in state government. I've seen it in action. Big businesses will often come into the government and propose regulations that they can comply with quite easily, but that make it very difficult for competitors to rise and challenge them. And the president's executive order tells us, look through the entire Code of Federal Regulations, find regulations that are barriers to entry that raise rivals' costs and get them out of there. So, we put out an RFI to the public. We said if you, especially small businesses, if you are aware of regulations that benefit your competitors but make it harder for you to compete, tell us. We will review them. We will make recommendations to the president. We also sent letters to every agency head in the federal government asking them to do the same thing. We will have economists and lawyers at both the Department of Justice and the FTC reviewing these regulations as they are identified to us. And I'm very excited when we eventually send the list to OMB and the president on our recommendations for descoping and deletion.
Yeah. One final comment because I may not be around for if we have a second round of questions and I want to be able to say this in regard to what you just discussed and that is I'm sure hopeful that among those things that are considered in this context is Section 1071 of the Dodd-Frank Act because that is, and Ms. Gluesenkamp Perez and I both agree that this small business side of the equation is where the jobs are created and where we need to be creating emphasis as far as the FTC goes. But that's one that is...
Very punitive to our banking community. So I applaud you for the work that you're doing. Keep it up and we look forward to getting your budget. Thank you.
Thank you, sir. The chair now recognizes the gentleman from Maryland, Mr. Ivy, for five minutes of questions.
Thank you, Mr. Chairman. Good morning, Mr. Chairman. I want to thank you for appearing here today. I appreciate your opening comments. I look forward to the report you're going to come back with with respect to PBMs. I think it's a very important issue. It's also a very complicated issue. So adding your insight, your agency's insight, will be especially helpful. I didn't follow the medical device merger issue in detail, but I was pleased to see that you were open to enjoining a merger. Your opening comments I think reflect the fact that you're trying to call the balls and strikes, that you're not trying to be ideological about it. I appreciate that. Continuing the ongoing litigation with big tech I thought was interesting as well. And I believe you, well, the FTC upheld the junk fees, I'll call it, determination, which I think is important. I think it's really one of those things that's tremendously helpful to people across the board. And I do want to join with my colleague from Washington state on the right to repair issue. I think that's one that is very important. You know, business-to-business conflicts, that's one thing. But, you know, a lot of these scenarios, we have individuals. You talked about a farmer owning a tractor with respect to John Deere, and I know that's ongoing, but that's the kind of scenario we, I think, we really need you to step up and make sure that people are protected, so that they can just take care of basic things and run their business or take care of their appliances. McDonald's. I'm not a big McFlurry guy, but you know, if they get a break along the way, that's fine. Click to cancel is another one that I think could really be helpful to a lot of people across the board. I know every time I try and cancel something that frequently one of my kids signed up for, it takes forever to do it. You know, you can sign up in a minute, but getting out of it can take half of a lifetime. So, I appreciate anything you can do on that front as well. I do want to say this with respect to the non-compete issue. I think that, and you opened by talking about the importance of workers and how they're the backbone of the economy and you want to take a pro-worker approach. The non-compete piece, in my experience when I was practicing, corporation to corporation, no poaching, that kind of stuff, I get it. But there's a lot of times where you have workers, individuals who really don't have negotiating capability with respect to larger corporations and they want to try and move to do another job or, you know, find other types of employment, might have some situation where, you know, beyond their control. And these clauses can really get in the way and hamstring them. And I think I took a look at your dissent on that issue and I appreciate your views on it. I know a lot of that's procedural. And I don't mean to belittle that, but this is a very important restriction on what regular people can do from an employment standpoint. And I hope that you'll be able to find a way to address that with respect to people who don't have that kind of power. They can't hire the big lobbyists as you mentioned. And I want to close with this, and I know this is ongoing litigation as well. The termination of Commissioners Slaughter and Bedoya, as you know, caught a lot of people's attention, that would include me. And I know it's still kind of in court, just getting underway. But one of the things that concerned me about that was it didn't appear that there were any grounds for the termination. Now I note that you issued a statement with respect to it, I think on the day they were terminated. And in the statement you issued, you didn't reference the standard for termination: inefficiency, neglect of duty, or malfeasance in office. And I, you know, you supported the termination but not on statutory grounds, not on legal grounds. And I think that's pretty significant, especially given your background. I took a look at your 40-page dissents. Supreme Court clerk, you mentioned being from a state school. You didn't mention it was UVA, which is a little more than a regular state school. They'll appreciate you saying that. Well, my brother will too. But my larger point though is, you know, you didn't hit on the law in the statement that you gave. You're a defendant in the case, so I know you'll have a chance to explain your position at length, but I think it's important for us to make sure we understand that independent commissions are supposed to be independent. The president certainly has the authority to make appointments, and as you pointed out, he just did, but there's supposed to be a partisan balance to these, and those terminations upset that balance from a statutory standpoint. So, you're in the middle of the case. I want to commend you overall in general for a lot of the positions you've taken and I look forward to working with you going forward.
Thank you. Chair now recognizes the gentle lady from Iowa, Miss Hinson, for any questions she may have.
Thank you, Mr. Chairman. Good morning, Mr. Chairman. Thank you so much for coming before our committee to testify and for the great work that you and, you mentioned, the incredible staff that you have at the FTC who are keeping American consumers protected. I really appreciate that great work that you're doing. Obviously, holding the bad actors accountable and ensuring that we have a system that doesn't burden our small businesses with excessive regulations remains a priority. I'm really excited to hear that we share that priority. One area that I think is a raging example of that is the pharmacy benefit managers. And I know there's already been discussion about that report this morning, but I think people are getting fed up of seeing people profit off of sick Americans and pushing many of these independent pharmacies in small rural communities like many in my district out of business. And just this week, we actually had a fellow, Ian and president of the American Pharmacist Association, Dr. Randy McDonough, he testified in front of Senate Judiciary Committee this week that in Iowa alone, 200 have closed since 2014. A record 31 pharmacies closed in 2024. I mean, those numbers are staggering to me when we think about access to health care, access to those life-saving drugs. Really, really important that we find a solution here. The FTC obviously released the interim report in January revealing that the big three PBMs impose markups of hundreds of thousands of percentages on numerous specialty generic drugs dispensed at their affiliated. So, I think we're all trying to wrap our heads around how they've been able to get away with this for this long. Can you talk a little bit about the FTC's plans to not only continue but ultimately complete this study and release that final report?
Absolutely. The commission has gotten huge quantities of data from the PBMs and the GPOs, and you know, we are going through it. I think it's very, in my view, as I said in my concurrence to the first interim report, was a bit rushed. The work was not the FTC's best. Substantial improvement in the second interim report. My view is that whatever we next produce needs to be a very, very thorough accounting of all the data we have and of all the issues it presents so that legislators here in Congress and in the states and policy makers throughout the federal government and the state governments have our full understanding of what is going on in these incredibly complicated markets. So we are devoting a ton of resources to getting this done. I want it done as quickly as possible but I do not want speed to be the enemy of thoroughness. So, we're trying to sort of thread the needle to make it as thorough, comprehensive as possible, which includes interacting with PBMs to hear their side of the story while also making sure that we have a full understanding of what's actually going on in these markets and that you all have it as soon as possible. We have other PBM matters ongoing. This is all public, but we took Kmart to court in the District of Columbia just a couple months ago because they were refusing to comply with some of our orders in a law enforcement investigation and we won. They were ordered to comply. That was a significant win not just for our PBM investigation, but for our sort of investigative authority across the board. And we have an ongoing administrative adjudication involving PBMs and insulin. It's difficult for me to talk about that one because I sit as a judge in the course of that proceeding. But this is one of our critical priorities at the FTC because health care is one of our critical priorities. Everyone participates in healthcare markets and the prices in health care are going up across the board and the rate at which people have to use the healthcare markets is also going up across the board. And you know, I don't think competition is a panacea to the health care cost crisis in this country but at least the FTC can make sure that everyone is competing within the bounds of the laws that Congress has passed and that is what we are focused on.
Yeah, this is about a level playing field and protecting consumers at the same time. And I think that my, I think all of us policy makers are trying to get to a point where we figure out how did we get here in the first place, right? So I don't know if you have any insight in that when you think about the FTC's job to protect consumers and here we are, you know, decades into this experiment with PBMs and we've kind of opened Pandora's box. And to your point about trying to be thorough here, time is of the essence because we are seeing states take action. My own home state of Iowa just passed, they just ended their legislative session I think at like 6:30 this morning, but they just passed Senate File 383. It's one of the most comprehensive state level PBM reforms in the country. And so I mean do you have any insight on just overall observations on how we got here and why these steps were not being taken along the way?
So, I have my suspicions, but I don't want to get ahead of the report. I sort of want the FTC's work, having analyzed all the data, to be our definitive statement on this. So, if you'll permit me, I will let the report when it is ready for release to Congress, sort of speak on this. I also think it's important, I think state and federal legislative action to address problems that may be posed by PBMs are good. It is always better for the people's representatives to confront the people's problems rather than sort of deferring to the bureaucrats. I think the report will be very helpful as Congress and the state legislators are trying to figure out what to do. But I think we should all welcome legislative action on this because you all understand the needs of your constituents better than anybody else, including their relationships with the PBMs.
Yes. And the need for lower-cost prescription drugs for sure. Thank you so much, Mr. Chairman, for coming. Appreciate it. I yield back.
Thank you. The chair now recognizes the gentleman from Wisconsin, Mr. Pocan, for five minutes.
Thank you, Mr. Chairman. And thank you for being here today. Sorry I missed the opening testimony. We have, you'll see Steny here in a second, battling hearings going on. You know, one of the things I think that I really appreciated about former chair Lina Khan was keeping the FTC independent. And you've mentioned that a number of times. In 2023, you testified to the Senate during your confirmation process that if confirmed as an FTC commissioner, I'll abide by binding Supreme Court precedent. And then you went on to cite Humphrey's Executor versus United States as the precedent that you'd support. As you know, that case upheld the independence of the FTC and specifically limited the president's ability to remove a commissioner. Well, the president has illegally fired two of your fellow commissioners and you went on to publicly support his actions. On March 18th, you said that quote, President Trump is vested with all of the executive power in our government. I have no doubts about his constitutional authority to remove commissioners. So, that's in direct conflict with what you said when you testified before the Senate in 2023. So, what is accurate? What you said when you were under oath in front of the Senate or what you said most recently when Donald Trump broke the law?
I'm a defendant in that litigation, but I can tell you what the brief said because the brief is filed in my name.
Yeah. And I'd like to get to three subjects during my time. So yeah, thank you.
Sure. Humphrey's Executor is good law. It governs the removal protections for the 1935 FTC. As I'm sure you know as well as I do, the 2025 FTC has orders of magnitude more authority than the 1935 FTC. And what the Supreme Court said in 2020 in Seila Law is that the Humphrey's Executor exception does not apply to federal agencies that wield substantial executive authority.
So the question I had is which was the accurate statement.
Both of them are accurate. What I said in 2023 is Humphrey's Executor is good law, which is true, as is Seila Law, the Supreme Court's definitive 2020 decision.
Thank you, Mr. Chairman. I'd like to enter into the record just the comments from that Senate hearing just so I can have it entered as well.
Thank you very much. Okay. So hopefully we can get two more subjects in two minutes. I'm going to do as fast as I can. I apologize. Last year the FTC uncovered in the proposed merger between Exxon Mobil and Pioneer Natural Resources, Pioneer CEO Scott Sheffield conspired with a foreign entity, OPEC, to raise gas prices for Americans. This price fixing likely cost consumers $2 to $4 billion, it's been estimated, in 2021. After learning of this illegal scheme, the FTC allowed the Exxon-Pioneer merger, but prohibited Sheffield from serving on the board or advising the new company in any way. Rightfully so. In March, after donating massive amounts to President Trump's election campaign, Mr. Sheffield asked the FTC under your leadership to reopen and alter, modify, or set aside the orders against him. Unfortunately, it seems that it has been reopened at this point, obliging to his request. I know that the commission just wrapped up a public comment period on this, of which I submitted a letter of opposition to that. Could you please let us know how allowing an alleged price fixer who actively colluded with a foreign entity, OPEC, should be put on the board of Exxon, and how that aligns with FTC's mission of protecting consumers and promoting competition?
I dissented from both of those orders dating back to May 2024. We did not, first of all, we did not proceed on the basis of evidence of price fixing. We accused him of making comments and that was it. Number one. And number two, I don't care if Mr. Sheffield ever serves on that board. I do care that the FTC rigidly follows the law, including Section 7. We had never articulated a Section 7 theory of that kind before. We had never issued an order of that kind before. And my concern remains that it was done in response to dozens of letters from Democratic legislators filed with the committee while we were considering that merger and that it was politically motivated. I want the FTC to follow the law. And to be clear, I didn't reopen the proceeding. The APA requires that I reopen the proceeding if I am asked.
I just, again, I think it would run counter to what both you've said and what Donald Trump has said about lowering costs. So hopefully we won't allow this guy who's colluded with hundreds of messages to a foreign entity to get on a board and rip off consumers ever again. Lastly, in 30 seconds really quick, an area I don't know if you've ever covered, but I'm checking in on Medicare Advantage plans. Four companies represent something like 75, 80% of the market out there. One of the complaints I think we all get from constituents are people have to get permission to have medical care and you don't have to do that with Medicare. They get turned down. When those are appealed, only 1 to 3% appeal. The appeal rate gets overturned is 85%. That's clearly like they're turning down so many cases that need coverage. Is that something that potentially you guys could look at? Because again a few companies seem to be of consolidation in the market and when that rate is so high, 85%, I'd love to know what your thoughts are on that.
I'm not familiar with the issue but I would be more than happy to work with you on it. Your staff should reach out to my staff and we're happy to talk with you about this.
I appreciate that. Thank you very much.
Thank you. The chair now recognizes the gentleman from North Carolina, Mr. Edwards, for any questions he may have.
Thank you, Mr. Chair. Chairman Ferguson, in 2019, HCA Healthcare acquired Mission Health in North Carolina for 1.5 billion. My constituents in western North Carolina were promised that this acquisition would result in lower patient costs. But after the merger, prices rose higher than the average list prices of the 11 neighboring hospitals and annual markup prices nearly doubled to an average of 33 percentage points a year. Patients have also experienced a lower quality of health care with a Centers for Medicare and Medicaid Services report finding that at least three patients died and more were endangered at the merged hospital in 2022 and 2023 due to significant wait times, delays, negligence, and lapse of care. Despite this significant decline in quality of care, Mission's patient care profits were almost a hundred million in 2022, three and a half times higher than its profits the year before the acquisition. Chairman Ferguson, in our previous meeting, you expressed similar concerns regarding the increasing prices of health care in rural areas as a result of private entity rollups and mergers. During your tenure as FTC chairman, what actions can and will you take to protect competition within the healthcare industry?
I enjoyed our discussion, Congressman Edwards. As we discussed and as I've discussed, going back to my confirmation hearing, rural healthcare in particular is super important to me. I grew up rural and saw a company come in and buy up a lot of physician practices and so I've seen the effects of it. The commission has a pretty remarkable track record of policing hospital mergers. We don't get them all right, but it's one of the things the commission is better at than almost anything else that it does. I know you've asked for a briefing on the HCA merger, and I think we've set it up with you in terms of what we can do. So, my first, the commission's first enforcement, antitrust enforcement action since I became chair was in the healthcare industry. It was to block a merger of two medical device manufacturers that we allege would have increased prices. We have ongoing litigation involving PBMs. We have the PBM report. And you know, I think continuing to make sure, we've also advocated against certificates of public advantage in states that allow hospital.
So, in the interest of time, respectfully, he's only going to give me five minutes. What can you do going forward to ensure that rural health care in America is protected?
We will continue to police hospital mergers as effectively as we've done for the last two decades.
How can you use your role as a federal regulator now to review the HCA and Mission Healthcare merger and take the necessary actions to reverse it if you determine that it's inhibited competition within the healthcare industry in western North Carolina?
The commission doesn't approve mergers. If the commission declines to bring an enforcement action, it isn't an approval. So, the commission always continues to monitor competitive effects in markets even after there are mergers that are not blocked. I'm happy to work with you and your staff and my staff are as well to understand the effects that the mergers had on rural North Carolina.
Thank you. I appreciate that. And in the interest of time, I'm going to accept that offer and let's work together. Now, I'd like to ask, I'm informed that you may intend to file an amicus brief in a Texas Attorney General's case that would, if successful, cause asset managers to divest from the coal industry. Can you speak to that real quick? Is that true?
So the state of Texas along with a coalition of Republican attorneys general brought a lawsuit against asset managers and accused them of having driven up the price of energy by driving down output in coal and oil. Which if true is sort of a shocking horrible thing that has been inflicted on all of us by driving up our energy prices. We have monitored, the Department of Justice has monitored this case closely. I think this was an important and groundbreaking case brought by Attorney General Paxton. And if true, could potentially, you know, remedy increasing energy prices by making sure that asset managers can't collude to drive down output and increase prices.
And so real quick because I'm running out of time. How does that support President Trump's energy policy?
President Trump has made it one of his chief priorities to unleash American energy so that prices for energy go down, which promotes growth, makes it easier for all of us to put gas in our cars. The accusation in that case is that asset managers were colluding in secret to drive up our energy prices. That is exactly the sort of thing the antitrust laws are designed to protect all Americans from. And we have monitored this case very closely.
Thank you, Mr. Chair. I must yield. I'm out of time.
Thank you, Mr. Edwards. Chair now recognizes the ranking member for any questions he may have in five minutes.
Thank you very much, Chair. Mr. Pocan and I are playing tag team here. Chair Ferguson, I'm concerned this committee's ability to fund the Department of Justice in our bill, including the FTC. But I want to ask you about the staffing levels. The FTC is already down, as I understand it, 1,221 FTEs. Is that accurate?
I do believe that is our current number. Yes, sir.
And there is a goal to get even lower. Is that accurate?
We are trying to get our employee levels down to a level we can actually afford given our current appropriation. Yes.
And what level is that? Because this is largely being driven by attrition rather than layoffs, it's difficult to predict exactly where it's going. But we are trying to get down around the 1100 range.
When you say attrition, are you calling the fork in the road and voluntary retirements attrition?
Yeah, when I inherited the agency, it was very clear that we had more employees than we could possibly afford. We were using carryover funds to pay our employees. That is not sustainable. That's not responsible. But I wanted to get the agency to healthy employee levels without having to do layoffs. And so we've offered the deferred resignation program again. We've offered VERA and VSIP across the entire agency to try to get us to a healthy full-time employee level without having to do layoffs.
Now, has there been a study done on what the appropriate level, when you say healthy level, presumably, and as I said at the beginning, I don't know that I've read a more detailed opening statement, and as I said, fully noted at the bottom of almost every page. So you've done a lot of studies, but is there a study that you could provide for the committee which says what the appropriate level of funding is to meet the very numerous objectives that you outlined in your statement that you want to achieve?
I can't identify a study, but what I can say is that the levels that this committee chooses to fund us, we will maximize the American taxpayers' return on investment. We consistently send back to the Treasury and to consumers billions of dollars either in the form of lower prices or recovered unjust enrichment from fraud. And no matter what this committee funds us at, we will keep doing that, which is just a testament to the fact that the FTC has, in my view, the best civilian staff in the federal government. So look, the appropriate healthy funding or level of employees is driven by funding decisions this committee makes. But whatever funding decision this committee makes, we will maximize your return on investment.
Well, we made a decision. We made a decision in fiscal year 24. We reaffirmed that in fiscal year 25, the CR, and now you're, every one of them was offered early out and to be paid through September 30th. Every one of them, your employees, which whom you have just said are outstanding, and you said that in your statement, which I appreciate. I represent, by the way, 77,000 federal employees. And so I appreciate that statement, which I think is accurate. Why would we send every one of those people, because clearly some of them must be necessary to accomplish the objectives you set forth in your statement, a notice you can leave and get paid through September 30th?
Because we could not afford to pay all of our employees at the levels Congress had appropriated us. The previous administration hired radically more people than we could afford to pay and we were eating into carryover funds just to cover payroll, which is a deeply irresponsible way to run an agency. My goal was to get and remains to get the agency to healthy employee levels in light of the money that Congress appropriated the agency.
Let me repeat my question. What is the healthy level?
The healthy level is what we're aiming for, which is in the...
No, no, no, no, no. I know that's what you're aiming for. That's your objective. What is a healthy level given the very important work that you outline in your statement? What is the level that you recommend you should have comport with your dollars available to you and the work that you have?
So in light of the dollars available to me, the number we've been discussing, around 1100, is the healthy level because that's the affordable level in terms of accomplishing our mission. We can accomplish the mission with 1100 employees. I have no doubt about it because our people are really, really good. We have shifted our priority especially away from rulemaking, which is time and resource intensive, back toward law enforcement and are moving resources in that way and that is the priority of this administration. It's my priority and we have the employees to do that.
Okay. And is your request an FTE level 1100 to be funded to 1100. Is that your request?
So given the current status of, I know we have a skinny budget at this point in time so that's, you may or may not be able to, so I'm not in a position to discuss the specifics but what I'm saying is 1100 is healthy given the current CR funding level and we will get the job done, period.
Okay. Well, I'm a little over time. I'm not sure what you mean given the current funding level. What I really want to know, and maybe you can do for the record, is what level do you think you need to accomplish the objectives you set forth within your statement?
Thank you, Mr. Chairman. You'll have another round, too.
