Okay. We're very pleased that Andrew Ferguson, chairman of the Federal Trade Commission, is with us today. And also with me, as well up here, is Barry Nigro, who I asked to help with the questioning. Barry's the global leader of Fried Frank's antitrust department and relevant to our session here today. Barry's a former deputy director of the FTC's Bureau of Competition. Do I think I have that right. So thank you, Barry, as well.
Um okay. In April 2024, Andrew Ferguson was sworn in as commissioner at the FTC and designated as chairman of the commission on January 20th. Wow, that didn't take very long for that to happen. So as is the case with all of our speakers today, I'll just say now that I'm not going to go through their entire bios for all of them. That would take more time than they want to use, but they're all in the brochure. So with Chairman Ferguson, I'm just going to recite a few highlights. He most recently served as solicitor general of the Commonwealth of Virginia. Prior to that, he served as chief counsel to Senator Mitch McConnell and as Republican counsel to the Senate Judiciary Committee. He earned his undergraduate and law degree from the University of Virginia, and after that he clerked for Karen Henderson on the US Court of Appeals and Justice Thomas on the Supreme Court. So, I have to say that's quite an impressive resume for someone that looks so young, at least to me, from where I sit. So congratulations on all of those accomplishments.
Okay. Now, we're going to talk of course about your specific priorities at the commission, but I think I want to ask you right out of the box about the FTC and how you think about it as an institution. And I guess as a jumping off point, we know that a few days ago President Trump dismissed the two Democrat FTC commissioners and essentially he didn't provide a reason in the sense of the statutory terms, neglect of duty or malfeasance or whatever, but just said that he was dismissing them. And so you have said, I think publicly, and I saw you on one television, though I know you've defended that action. And tell us if you could, Chairman Ferguson, I guess why you think that the president does have that removal power. Now we've got Humphrey's Executor in the background, and well, maybe that's a good place to start.
Well, thanks for having me, Barry. Thanks for being here too. I'm excited to be with the Free State Foundation. Yeah, so let's talk about the removal issue a little bit. I clerked for Justice Thomas, so my views on executive power generally are probably not terribly surprising, but the Constitution says that all of the executive power is vested in the president. And dating back to the early 20th century, the Supreme Court has acknowledged that one of the key features of the executive power is the power to supervise and order subordinate officers who execute the laws in the president's name. And that one of the most important powers that attaches to the power to supervise subordinate officers is the power to remove officers. Now we have Humphrey's Executor, a 1935 case that purported to bless, at least in some circumstances, for-cause removal protections for officers on multi-member boards. But I think a couple things to say about Humphrey's Executor. First, I encourage you all to read it. It is a decision difficult to sort of defend on its merits, right or wrong. It describes the FTC, for example, as not a part of the executive branch, as a quasi-legislative, quasi-judicial body. The Supreme Court has since abandoned that entirely in 2020 in a case called Seila Law against CFPB. The Supreme Court said, of course, the FTC is part of the executive branch. Of course it wields executive power. So the sort of premise on which Humphrey's Executor rested has been abandoned by the court. The second thing that the court said in Seila Law is Humphrey's Executor only applies to multi-member boards that do not wield substantial executive power. That's the test the court announced in Seila Law, is that Humphrey's Executor's exception to the president's otherwise plenary removal authority applies only to multi-member boards that do not wield substantial executive power. If the FTC does not wield substantial executive power, I do not know what agency of the federal government does. We have the power to issue and enforce rules having the force of law. We have the power to issue compulsory process to conduct investigations. Our jurisdiction extends to almost every corner of the economy. We have the power to seek civil penalties. We have the power to obtain restitution and we have the power to obtain injunctions in federal court. We also have the power to adjudicate disputes in our own internal court system. If that isn't substantial executive power, I literally can't imagine what would be. And so in my own view, and this is the view that the Department of Justice has taken as well, whatever the FTC was in 1935 when Humphrey's Executor was decided, the 2025 Federal Trade Commission wields substantial executive power and therefore under Seila Law, the removal protections in Section 1 of the FTC Act simply are not constitutional. My own view is I expect the Supreme Court probably will overrule Humphrey's Executor or it'll take the Seila Law approach and say the 2025 FTC is sufficiently different from the 1935 FTC that under Seila Law, Section 1 is no longer constitutional.
I also want to comment very briefly on sort of the political theory that animated removal protections for not just the Federal Trade Commission but for the sort of swath of alphabet soup agencies that we call the independent agencies. So these are arising sort of in the heyday of Wilsonian progressive political theory where advocates of the administrative state posited that the administration of government is a technocratic expert exercise that ought to be left to highly specialized experts and that the grubby business of politics ought to have nothing to do with the administration of government. I think, you know, a lot could be and has been said about the problems with Wilsonian progressivism as it comes to the administration of government. But I think for my own purposes, just a couple comments on that. First, my own experience in the executive branch, the judicial branch, the legislative branch, and in state government is that this proposed distinction between the administration of government and politics is farcical. Of course, the administration of government is necessarily inflected by, determined by politics. Of course it is, because the president, an elected politician, picks the people who go on the agencies and Congress, comprised of elected politicians, conducts oversight of those agencies. So, of course, politics plays a role in administration. And I think the second thing to say is that the sort of Wilsonian utopian version of the independent agency is that we'll have all of these independent agencies staffed by hyper-elite technical experts who will be highly specialized, will know more about whatever their subject matter than anyone else in America and will be completely aloof from politics. A fair amount of work has been written on sort of the demography of those who have been federal trade commissioners, but the overwhelming majority of them have substantial political experience and powerful political patrons. I spent time on the Hill. My two colleagues who were removed by President Trump last week spent almost their entire careers on the Hill. And so I think the idea that the independent agencies were going to be comprised of politically aloof experts has simply not been true as a historical matter. But I also think that it is the result of this sort of Wilsonian myth that the administration of government is distinct from politics and they ought to be separated. It's not true. It never has been true and it can't be true. Politics and the administration of government, of course, go together. And this is the key point. If that is true, then the American people ought to have a direct say in how their government is administered. And in our system, what is the way that the American people have their say in the administration of the executive branch? It is through the election of the president of the United States. And so when we elect the president, when we pick the chief magistrate of our government, we are electing the person who is going to be able to supervise the entire government. Not parts of the government, the entire government. And if the president can't supervise 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. That's the deep state. That's exactly the criticism that President Trump and Republicans have been leveling towards the way that the government has been run. And the way to ensure there isn't a deep state that is divorced from the will of the people is to ensure that the president, the popularly elected, politically accountable representative of the American people can exercise real control over the conduct of his government. And that is why the removal power is so important to democratic accountability.
Wow. Well, thank you for that very complete answer. I might try and transcribe that and submit it as a law review article. So watch out. No. So, a couple quick questions just with quick answers. Are commissioners Bedoya and Slaughter, are they still at the commission this morning? And if they are, what does it mean for the, I guess either way, what does it mean for the legal validity of enforcement decisions going forward with or without them? Just quickly.
Former commissioners Slaughter and Bedoya, of whom I'm personally fond, are not commissioners of the Federal Trade Commission. They were lawfully removed by President Trump. Both of them, of course, have suggested that they intend to sue to resolve this question and, you know, a court of courts will, you know, if that's true, eventually decide. But my own view is the president's removal was lawful and neither of them are officers of the United States. In terms of the validity of our enforcement actions, the commission has operated with two commissioners before. We have a specific rule that says that if the commission is comprised of fewer than three commissioners, then all of the commissioners, two of them, comprise the quorum. So, you know, the commission can continue to take action and we will continue to take action to protect Americans from monopolies and from frauds. You know, at the end of the day, in my view, the president had the power to do this, but ultimately, you know, I don't speak for the president. My job is to run the commission and to protect Americans and American families. And that sort of business of the commission continues, you know, notwithstanding sort of the political drama of the day.
Okay. And just one more institutional question, then we're going to drill down to specific issues. Has DOGE been active at the FTC in examining personnel and activities? And if DOGE has been, by DOGE I mean the people that run DOGE, have, and how has that been working out if DOGE has been at the FTC?
So we don't generally talk about personnel or other sort of internal agency stuff in public. But I will say that in my own view, I unequivocally support the president's sort of efficiency and deregulatory agenda. Government should be no bigger than necessary to secure the flourishing of all Americans. And I think it has become very clear over the last several months that the federal government was suffering from an epidemic of waste, fraud, and abuse. And I think that the president's administration has done a superlative job in rooting that out all over the government. You know, we at the commission have taken steps to promote efficiency. We've canceled contracts. But, you know, the American people voted for major reform of their government. The president is ensuring that major reform is taking place and we unequivocally support that reforming mission at the FTC.
Okay. So now Barry and I are going to come at you with some FTC-specific competition and consumer protection issues. And let me just start with asking you about the consumer welfare standard. That was obviously, as you know, a big topic of discussion and concern during your predecessor's chairmanship. I guess to put a point on it, she moved away from the traditional, or wanted to move away from the traditional understanding of the consumer welfare standard as it had been understood for a couple decades, so that other factors that were not so strictly tied to the economic analysis came into play. What is your view, Chairman Ferguson, on how you think about how the consumer welfare standard fits into your decision making?
The consumer welfare standard, properly understood, is the prevailing understanding of the antitrust laws in court. And at the end of the day, I'm a law enforcer, which means that I need to win in court. And if the courts say that the consumer welfare standard is the law, that needs to be sort of the critical part of my analysis. But I do want to comment on two of the things that you said. The first is, you know, is the consumer welfare standard still here? The answer is definitely yes. But I do think that one of the most important things that happened beginning in the first Trump administration was sort of taking a broader understanding of all of the components of the consumer welfare standard. I think among some sort of antitrust scholars, but more sort of like advocates for particular industries, there's a desire to reduce the consumer welfare standard to sort of very simple econometric questions about short-term price effects and short-term output effects. That isn't what the consumer welfare standard has ever been. It's always understood consumer welfare in a broader capacity than just price and output effects. It's always understood risks to innovation, to future competition, risks to product quality. Basically treating injuries to consumers as marketplace participants and injuries to workers as marketplace participants, because the antitrust laws protect Americans as suppliers of labor as well as consumers of products, has always been part of the consumer welfare standard. And I think there's been a drive in some quarters to reduce the consumer welfare standard to just a price and output question. And I think that is sort of a misstatement of the consumer welfare standard. With regard to sort of my predecessor's views, I think there's no doubt that my predecessor took the view that the consumer welfare standard, I'm not sure exactly how she would have meant it when she talked about the consumer welfare standard, but let's name her just for the record.
Let's name her just for the record.
The former chairwoman of the FTC, Lina Khan. But, you know, her view was that the consumer welfare standard is too narrow and that antitrust laws protect all sorts of values and interests that are unrelated to sort of economic harms inflicted on marketplace participants. And I, you know, who I'm about to talk about, Barry, but Daniel Francis is an antitrust professor at NYU and was a member of the Trump administration at the FTC and is my favorite antitrust scholar writing today. And he wrote an article in November assessing the effect of the sort of what we call the, or what they call themselves, the Neo-Brandeisian revolution in the Biden administration. And his view, I think, really captures what happened, which is insofar as the goal of the Biden antitrust enforcers was to overthrow the consumer welfare standard, it was a failure. The revolution failed. The courts continue to apply the consumer welfare standard. In fact, you know, some of the most aggressive early efforts of the Biden FTC to bring cases that weren't really tied to the consumer welfare standard, like Meta Within or Microsoft Activision, just failed quite spectacularly in court. But that sort of retrenched the consumer welfare standard in the judiciary. Professor Francis writes very persuasively that the legacy of the first Trump administration enforcers, including Barry's time at the Department of Justice, and of the Biden administration, is a fuller understanding of the consumer welfare standard. Taking it out of sort of what I maybe a little bit unfairly call sort of the very libertarian view that the only thing we should care about in antitrust is what the economists predict will happen to price and output. An understanding that antitrust protects marketplace participants from identifiable economic harms, not just from price and output constraints.
