WEBVTT - Challenge to the FTC's Independence 

0:00:02.880 --> 0:00:07.120
<v Speaker 1>This is Bloomberg Law with June Grossel from Bloomberg Radio.

0:00:08.880 --> 0:00:13.440
<v Speaker 2>The Trump administration has been mounting an unprecedented campaign to

0:00:13.560 --> 0:00:18.920
<v Speaker 2>reign in independent agencies and increase executive authority. To that end,

0:00:19.000 --> 0:00:22.159
<v Speaker 2>President Trump has fired more than a dozen leaders of

0:00:22.280 --> 0:00:26.680
<v Speaker 2>independent agencies without cause. What stands out in the long

0:00:26.760 --> 0:00:30.560
<v Speaker 2>list is Trump firing the two Democratic members of the

0:00:30.600 --> 0:00:35.120
<v Speaker 2>Federal Trade Commission. Rebecca Kelly. Slaughter is fighting her dismissal

0:00:35.159 --> 0:00:37.720
<v Speaker 2>in court, arguing that it was illegal.

0:00:38.320 --> 0:00:41.480
<v Speaker 3>Only one time in history has a president attempted to

0:00:41.560 --> 0:00:45.879
<v Speaker 3>remove an FTC commissioner over a policy disagreement. It was

0:00:46.080 --> 0:00:50.440
<v Speaker 3>ninety years ago President Roosevelt tried to remove Commissioner Humphrey,

0:00:50.800 --> 0:00:53.600
<v Speaker 3>and in the face of the clear language of the statute,

0:00:53.640 --> 0:00:57.360
<v Speaker 3>the Supreme Court said that was illegal, that the statute

0:00:57.440 --> 0:01:01.680
<v Speaker 3>is constitutional, and that FTC commissioner and other commissioners of

0:01:01.800 --> 0:01:06.080
<v Speaker 3>multi member bipartisan agencies cannot be simply removed because the

0:01:06.120 --> 0:01:07.479
<v Speaker 3>president doesn't agree with them.

0:01:07.680 --> 0:01:10.440
<v Speaker 2>But the Justice Department has said it's going to ask

0:01:10.480 --> 0:01:14.240
<v Speaker 2>the Supreme Court to reverse that ninety year old president

0:01:14.520 --> 0:01:19.520
<v Speaker 2>called Humphrey's executor. Legal experts say they'll be broad ramifications

0:01:19.760 --> 0:01:24.080
<v Speaker 2>if the President can fire FTC commissioners at will, and

0:01:24.160 --> 0:01:28.520
<v Speaker 2>the agency is no longer independent. My guest is William Kavasik,

0:01:28.640 --> 0:01:32.319
<v Speaker 2>former FDC chair and a professor at the George Mason

0:01:32.440 --> 0:01:35.959
<v Speaker 2>University School of Law. Bill tell us about the president

0:01:36.040 --> 0:01:37.039
<v Speaker 2>firing Slaughter.

0:01:37.560 --> 0:01:41.720
<v Speaker 1>Yeah, the President decided that he has the authority to

0:01:41.800 --> 0:01:46.039
<v Speaker 1>simply fire members of the FTC without any cause, and

0:01:46.319 --> 0:01:50.440
<v Speaker 1>this contradicts a nineteen thirty five Supreme Court decision called

0:01:50.600 --> 0:01:54.640
<v Speaker 1>Humphrey's Executor that said that FTC commissioners can be removed

0:01:55.000 --> 0:01:58.800
<v Speaker 1>only for good cause. The President clearly wanted to remove

0:01:58.840 --> 0:02:02.400
<v Speaker 1>the two Democrats from the FTC, Rebecca Kelly Slaughter and

0:02:02.560 --> 0:02:07.120
<v Speaker 1>Alvaro Beadoya, and he simply dismissed them. So he decided

0:02:07.200 --> 0:02:09.760
<v Speaker 1>not just for the FTC, but I think as part

0:02:09.760 --> 0:02:13.520
<v Speaker 1>of a program for government generally, decided to assert executive

0:02:13.560 --> 0:02:16.519
<v Speaker 1>authority to control more directly who can serve on these

0:02:16.560 --> 0:02:17.800
<v Speaker 1>regulatory agencies.

0:02:18.000 --> 0:02:21.560
<v Speaker 2>Slaughter won her first battle in court. A federal judge

0:02:21.600 --> 0:02:26.119
<v Speaker 2>reinstated her last month, although that reinstatement has been put

0:02:26.160 --> 0:02:30.200
<v Speaker 2>on hold pending an appeals court decision. Explain the judge's

0:02:30.240 --> 0:02:31.760
<v Speaker 2>reasons for reinstating her.

0:02:32.360 --> 0:02:36.480
<v Speaker 1>Now. She concluded that the president's authority is defined by

0:02:36.639 --> 0:02:40.079
<v Speaker 1>the nineteen thirty five Supreme Court decision, and the nineteen

0:02:40.160 --> 0:02:43.880
<v Speaker 1>thirty five Supreme Court decision said that the president can

0:02:43.919 --> 0:02:47.880
<v Speaker 1>remove Federal Trade Commissioners only for good cost, that the

0:02:47.960 --> 0:02:52.440
<v Speaker 1>limitation on removal was established in the FTC Statute adopted

0:02:52.480 --> 0:02:57.080
<v Speaker 1>in nineteen fourteen, and that the Supreme Court's interpretation of

0:02:57.120 --> 0:03:00.200
<v Speaker 1>that statute limited the circumstances in which the present and

0:03:00.200 --> 0:03:04.400
<v Speaker 1>it could remove FPC commissioners. Judge Ali Khan and the

0:03:04.440 --> 0:03:09.160
<v Speaker 1>District Court opinion concluded that those authorities are controlling, that

0:03:09.440 --> 0:03:13.400
<v Speaker 1>the statute itself makes clear the conditions enrich removal can

0:03:13.440 --> 0:03:17.640
<v Speaker 1>take place, and the Supreme Court upheld the limitation on

0:03:17.760 --> 0:03:22.200
<v Speaker 1>executive power, and she said the President contradicted that approach,

0:03:22.560 --> 0:03:26.800
<v Speaker 1>and until the Supreme Court says otherwise about it's nineteen

0:03:26.880 --> 0:03:31.880
<v Speaker 1>thirty five decision, that decision is binding on me and commissioners,

0:03:31.880 --> 0:03:33.639
<v Speaker 1>Slaughter is entitled to be reinstated.

0:03:33.960 --> 0:03:37.120
<v Speaker 2>It seems like Humphrey's executor is in jeopardy at the

0:03:37.160 --> 0:03:40.680
<v Speaker 2>Supreme Court. In July, the Court allowed the Trump administration

0:03:40.840 --> 0:03:45.120
<v Speaker 2>to remove three democratic members of the Consumer Product's Safety

0:03:45.120 --> 0:03:48.360
<v Speaker 2>Commission that were fired by Trump and then reinstated by

0:03:48.360 --> 0:03:51.160
<v Speaker 2>a federal judge. And it may the Court rule that

0:03:51.200 --> 0:03:55.760
<v Speaker 2>the democratic members of the NLRB and Merit Systems Protection

0:03:55.920 --> 0:03:59.360
<v Speaker 2>Board couldn't return to their jobs because the government was

0:03:59.640 --> 0:04:03.320
<v Speaker 2>likely to be able to show that the agency's exercised

0:04:03.400 --> 0:04:07.600
<v Speaker 2>considerable independent power. So does it seem like the Supreme

0:04:07.640 --> 0:04:11.440
<v Speaker 2>Court is ready to overturn Humphrey's Executor.

0:04:11.440 --> 0:04:13.760
<v Speaker 1>As you say, June, The Court's given a number of

0:04:13.840 --> 0:04:17.440
<v Speaker 1>hints that it is ready to revisit Humphrey's executor and

0:04:17.720 --> 0:04:21.040
<v Speaker 1>to overturn it. The Court has cautioned that every burn

0:04:21.120 --> 0:04:23.560
<v Speaker 1>in the road that we're not making a final decision

0:04:23.560 --> 0:04:27.200
<v Speaker 1>on the merit, that that fuller evaluation of the merit

0:04:27.440 --> 0:04:31.240
<v Speaker 1>of Humphrey and its vitality today remains to take place.

0:04:31.480 --> 0:04:34.719
<v Speaker 1>So they've said we're not deciding now, but the way

0:04:34.720 --> 0:04:37.120
<v Speaker 1>in which they've written the decisions that you referred to,

0:04:37.640 --> 0:04:41.320
<v Speaker 1>even these preliminary rulings where they're not offering a final

0:04:41.400 --> 0:04:44.760
<v Speaker 1>view about the legitimacy of the challenges at issue, have

0:04:44.880 --> 0:04:47.400
<v Speaker 1>given hints that at least three members of the Court

0:04:47.720 --> 0:04:51.839
<v Speaker 1>think that Humphreys must be overturned, maybe two more members

0:04:51.839 --> 0:04:55.279
<v Speaker 1>of the Court are wavering in their support of Humphreys.

0:04:55.400 --> 0:04:58.640
<v Speaker 1>I suppose if you were making a wager now about

0:04:58.720 --> 0:05:02.480
<v Speaker 1>whether Humphrey's will live through the end of twenty twenty six,

0:05:02.880 --> 0:05:04.800
<v Speaker 1>I suppose the way to bet would be to say no,

0:05:05.080 --> 0:05:08.360
<v Speaker 1>that it won't. I don't think the possibilities for Humphrey's

0:05:08.360 --> 0:05:12.039
<v Speaker 1>executors to survive have been extinguished. There's still possibilities that

0:05:12.080 --> 0:05:15.040
<v Speaker 1>the Court might reflect on the basis for the creation

0:05:15.200 --> 0:05:18.960
<v Speaker 1>of the limit on removal, might think more completely about

0:05:19.120 --> 0:05:24.080
<v Speaker 1>existing controls that the President already has over administrative agency discretion,

0:05:24.360 --> 0:05:27.080
<v Speaker 1>to realize that the choice here is not between having

0:05:27.120 --> 0:05:31.120
<v Speaker 1>no control and absolute control over appointments and removal. The

0:05:31.160 --> 0:05:34.520
<v Speaker 1>president already has a number of tools at the president's

0:05:34.520 --> 0:05:37.760
<v Speaker 1>disposal to influence the way in which the Federal Trade

0:05:37.800 --> 0:05:41.320
<v Speaker 1>Commission and similar agencies operate. The real issue here is

0:05:41.320 --> 0:05:44.080
<v Speaker 1>whether that control must be absolute, and the Court might

0:05:44.120 --> 0:05:46.640
<v Speaker 1>reflect on that in a more elaborate way and come

0:05:46.640 --> 0:05:48.839
<v Speaker 1>to a different conclusion. But that's a long way of

0:05:48.880 --> 0:05:53.560
<v Speaker 1>saying that Humphrey's Executor appears to be in peril, and

0:05:53.560 --> 0:05:56.360
<v Speaker 1>that when the Court does come at some point, perhaps

0:05:56.360 --> 0:06:00.200
<v Speaker 1>in twenty twenty six, to confront the continuing vitalent of

0:06:00.279 --> 0:06:04.080
<v Speaker 1>Hunfrees executive, it will probably say that we've decided to

0:06:04.160 --> 0:06:05.000
<v Speaker 1>change our minds.

0:06:05.120 --> 0:06:09.920
<v Speaker 2>Bill. Is the FDC right now a fully independent agency?

0:06:10.400 --> 0:06:14.440
<v Speaker 1>When you look at the design, organization and operation of

0:06:14.440 --> 0:06:18.080
<v Speaker 1>the agency, I think we discover that the English word

0:06:18.520 --> 0:06:22.520
<v Speaker 1>independence is badly ill suited to describe the Commission's place

0:06:22.560 --> 0:06:25.719
<v Speaker 1>in the political landscape. You know, first, the President gets

0:06:25.760 --> 0:06:29.919
<v Speaker 1>to designate the chair from among existing members of the Commission,

0:06:30.120 --> 0:06:32.240
<v Speaker 1>and that only takes signing a letter that says you're

0:06:32.279 --> 0:06:34.799
<v Speaker 1>the chair. That comes with a lot of power, because

0:06:35.160 --> 0:06:39.120
<v Speaker 1>since nineteen forty nine nineteen fifty, the chair of the

0:06:39.320 --> 0:06:44.040
<v Speaker 1>so called independent agencies has been the chief operating officer

0:06:44.160 --> 0:06:49.240
<v Speaker 1>and the chief executive of these agencies and exercises extraordinary

0:06:49.240 --> 0:06:53.840
<v Speaker 1>authority as part of that reshuffling of government power that

0:06:53.880 --> 0:06:57.400
<v Speaker 1>took place in the Government Reorganization Act of nineteen forty

0:06:57.480 --> 0:07:00.760
<v Speaker 1>nine and a reorganization plan that put in place for

0:07:00.800 --> 0:07:03.919
<v Speaker 1>the FTC in nineteen fifty. So that already gives the

0:07:03.920 --> 0:07:06.479
<v Speaker 1>president a lot of power. Of course, the White House

0:07:06.480 --> 0:07:09.359
<v Speaker 1>submits the budget on behalf of the United States to

0:07:09.400 --> 0:07:12.360
<v Speaker 1>the Congress. The FDC does not do that. Directly, so

0:07:12.480 --> 0:07:15.560
<v Speaker 1>the FTC's budget requests have to be filtered through the

0:07:15.640 --> 0:07:20.280
<v Speaker 1>white The White House controls whether FTC officials can go overseas.

0:07:20.680 --> 0:07:25.720
<v Speaker 1>The Executive Branch gives permission to FDC officials to travel

0:07:25.800 --> 0:07:30.560
<v Speaker 1>abroad for government purposes, So if they don't want the

0:07:30.640 --> 0:07:34.120
<v Speaker 1>FTC roaming the global landscape speaking on its own, they

0:07:34.120 --> 0:07:37.760
<v Speaker 1>can stop that right away. The Department of Justice intervenes

0:07:37.880 --> 0:07:41.160
<v Speaker 1>in a number of instances in the cases of the

0:07:41.240 --> 0:07:44.880
<v Speaker 1>FTC to oppose the FTC. This is a short list

0:07:44.880 --> 0:07:48.160
<v Speaker 1>of ways in which the FTC is not independent, and

0:07:48.240 --> 0:07:51.240
<v Speaker 1>in a broader sense, when we look at Congress, the Congress,

0:07:51.240 --> 0:07:54.480
<v Speaker 1>of course controls the FTC's budget, and every year the

0:07:54.560 --> 0:07:57.160
<v Speaker 1>FTC has to go ask for money, I would say

0:07:57.200 --> 0:08:00.080
<v Speaker 1>that an agency that every year has to ask Congress

0:08:00.120 --> 0:08:03.960
<v Speaker 1>for an allowance is not very independent, no more independent

0:08:04.000 --> 0:08:06.560
<v Speaker 1>than a college student is going to their parents at

0:08:06.600 --> 0:08:09.480
<v Speaker 1>the beginning every school year and saying, top up my allowance.

0:08:10.160 --> 0:08:13.360
<v Speaker 1>That independence is severely constrained, and maybe a better way

0:08:13.400 --> 0:08:17.360
<v Speaker 1>to describe the FTC's relationship to the political process is

0:08:17.520 --> 0:08:21.960
<v Speaker 1>semi autonomous with respect to some functions like adjudication, But

0:08:22.240 --> 0:08:26.000
<v Speaker 1>independence is a badly inaccurate way to describe its place

0:08:26.400 --> 0:08:27.760
<v Speaker 1>in the political ecology.

0:08:28.440 --> 0:08:32.120
<v Speaker 2>Let's talk about what would happen the changes if the

0:08:32.200 --> 0:08:36.800
<v Speaker 2>FDC loses the independence it now has. It's been said

0:08:36.800 --> 0:08:40.880
<v Speaker 2>that one casualty would be the in house adjudication system.

0:08:41.080 --> 0:08:43.599
<v Speaker 1>I think that's right too, and I think the administrative

0:08:43.720 --> 0:08:48.280
<v Speaker 1>in house adjudication system ultimately topples. For this reason, I

0:08:48.280 --> 0:08:52.800
<v Speaker 1>think crucial to the legitimacy of any judicial dispute resolution

0:08:52.960 --> 0:08:56.240
<v Speaker 1>tribunal is some degree of autonomy. This is where the

0:08:56.280 --> 0:09:00.640
<v Speaker 1>autonomy is most important for legitimacy. Once times a parent

0:09:00.720 --> 0:09:04.199
<v Speaker 1>that the president can simply fire Federal Trade commissioners because

0:09:04.200 --> 0:09:08.080
<v Speaker 1>he doesn't like their work, doesn't like their philosophy, I

0:09:08.120 --> 0:09:11.640
<v Speaker 1>think that system unravels. You can't have courts where the

0:09:11.720 --> 0:09:16.400
<v Speaker 1>judges are aware that a decision or a specific approach

0:09:16.520 --> 0:09:19.360
<v Speaker 1>taken in a given case could cause their dismissal, and

0:09:19.400 --> 0:09:24.880
<v Speaker 1>the FTC commissioners serve as adjudicators when the FTC uses

0:09:24.920 --> 0:09:28.959
<v Speaker 1>that internal mechanism. So, I think a domino that falls

0:09:29.120 --> 0:09:33.880
<v Speaker 1>if Humphrey's executor is overturned is the perceived legitimacy and

0:09:33.920 --> 0:09:38.839
<v Speaker 1>functioning of the administrative adjudication system That disappears.

0:09:38.640 --> 0:09:43.400
<v Speaker 2>And even now we're seeing motions to dismiss FTC cases,

0:09:43.880 --> 0:09:48.600
<v Speaker 2>eleging that the FTC structure is unconstitutional because of this

0:09:49.000 --> 0:09:51.360
<v Speaker 2>weight over Humphreys, I.

0:09:51.320 --> 0:09:55.840
<v Speaker 1>Think the deeper threat to the FTC's effectiveness is that

0:09:55.880 --> 0:09:58.160
<v Speaker 1>when it goes to court, it has always had the

0:09:58.200 --> 0:10:01.480
<v Speaker 1>capacity to tell the court the positions we are taking

0:10:01.559 --> 0:10:04.640
<v Speaker 1>are the result of our best professional judgment, and as

0:10:04.679 --> 0:10:08.839
<v Speaker 1>an expert body, we are asking for respect for our

0:10:08.920 --> 0:10:13.040
<v Speaker 1>judgments because they're based on our accumulated experience, our research

0:10:13.120 --> 0:10:16.280
<v Speaker 1>in the field of competition and consumer protection, and the

0:10:16.400 --> 0:10:20.480
<v Speaker 1>expertise that individual members of the Commission bring to the

0:10:20.520 --> 0:10:24.240
<v Speaker 1>analysis of specific cases. When you put all of those together,

0:10:24.720 --> 0:10:28.600
<v Speaker 1>you have a key element of professional judgment that might

0:10:28.640 --> 0:10:33.520
<v Speaker 1>not be always correct, but it deserves respect because it

0:10:33.600 --> 0:10:36.920
<v Speaker 1>is more likely to be correct than the judgment of

0:10:37.600 --> 0:10:41.080
<v Speaker 1>individual federal judges, the parties, and the cases. That is

0:10:41.120 --> 0:10:43.839
<v Speaker 1>that that judgment is worthy of respect. It doesn't mean

0:10:43.880 --> 0:10:45.839
<v Speaker 1>that the FDC is always going to prevail in court.

0:10:46.200 --> 0:10:50.280
<v Speaker 1>The moment that courts perceive that you are using your

0:10:50.320 --> 0:10:55.840
<v Speaker 1>authority not because of your best professional judgment, but because

0:10:55.960 --> 0:10:59.640
<v Speaker 1>you are simply an extension of the political process and

0:10:59.760 --> 0:11:03.000
<v Speaker 1>you are serving the specific interests or whims and the

0:11:03.080 --> 0:11:07.679
<v Speaker 1>chief executive, that element of professional judgment and respect disappear.

0:11:07.960 --> 0:11:11.720
<v Speaker 1>They're gone. So I think a consequence ipumphrase dies is

0:11:11.760 --> 0:11:14.600
<v Speaker 1>that the Commission loses the ability to scand before the

0:11:14.640 --> 0:11:17.800
<v Speaker 1>courts and say you can trust us. And in so

0:11:17.880 --> 0:11:22.199
<v Speaker 1>many ways, that's what government agencies ask court is trust

0:11:22.280 --> 0:11:26.160
<v Speaker 1>us because we are the professionals. We're using professional judgment,

0:11:26.880 --> 0:11:29.320
<v Speaker 1>and that's why you can have confidence in the judgments

0:11:29.360 --> 0:11:34.520
<v Speaker 1>we're making. You take protection against removal except for a

0:11:34.520 --> 0:11:39.920
<v Speaker 1>good cause away the basis for asserting that respect disappears,

0:11:40.200 --> 0:11:43.320
<v Speaker 1>and I think it means that, simply stated, you have

0:11:43.360 --> 0:11:45.559
<v Speaker 1>a harder time winning your cases when you go to court.

0:11:45.800 --> 0:11:48.120
<v Speaker 2>Coming up next on the Bloomberg Lan Show, I'll continue

0:11:48.120 --> 0:11:52.280
<v Speaker 2>this conversation with former FTC chair Bill Kvasik. We'll talk

0:11:52.320 --> 0:11:56.160
<v Speaker 2>about a bill to consolidate anti trust authority solely in

0:11:56.200 --> 0:12:00.480
<v Speaker 2>the Justice Department. You're listening to Bloomberg. I'm talking to

0:12:00.600 --> 0:12:06.079
<v Speaker 2>former FTC chair William Kavasik about the Trump administration's campaign

0:12:06.200 --> 0:12:10.800
<v Speaker 2>to reign in independent agencies and increase executive power.

0:12:11.200 --> 0:12:15.880
<v Speaker 4>Bill. Is there any argument that you see for a

0:12:16.000 --> 0:12:19.640
<v Speaker 4>president having the ability to fire commissioners at will.

0:12:20.120 --> 0:12:22.600
<v Speaker 1>I guess the best argument would be this. I mean,

0:12:22.679 --> 0:12:28.320
<v Speaker 1>suppose you're an incoming president and the existing configuration of

0:12:28.360 --> 0:12:31.840
<v Speaker 1>the commission means that there is nobody from your political

0:12:31.880 --> 0:12:34.520
<v Speaker 1>party on the board. Imagine a commission of five and

0:12:34.559 --> 0:12:37.880
<v Speaker 1>you have two vacancies, and the vacancies ordinarily would be

0:12:38.320 --> 0:12:42.640
<v Speaker 1>your party, but nobody's been confirmed. In that insense, you

0:12:42.679 --> 0:12:44.840
<v Speaker 1>can make an argument that the president ought to be

0:12:44.880 --> 0:12:48.440
<v Speaker 1>able to put the president's preferred person on the board,

0:12:48.520 --> 0:12:50.959
<v Speaker 1>although even there they have to go through Senate confirmation.

0:12:51.320 --> 0:12:53.400
<v Speaker 1>They'd have to go through Senate confirmation. And if you

0:12:53.400 --> 0:12:55.760
<v Speaker 1>have a vacancy, you can you can appoint somebody to

0:12:55.800 --> 0:12:58.720
<v Speaker 1>fill that spot. I guess the other argument one could

0:12:58.760 --> 0:13:03.480
<v Speaker 1>make is that in d need, these agencies exercise significant discretion.

0:13:03.960 --> 0:13:08.079
<v Speaker 1>They have considerable powers. The FPC has a broad mandate

0:13:08.200 --> 0:13:12.480
<v Speaker 1>with a number of policymaking tools to implement it, and

0:13:12.559 --> 0:13:16.440
<v Speaker 1>those are significant economically important. And if I'm the president,

0:13:16.559 --> 0:13:19.920
<v Speaker 1>I'm saying I have to have the ability to determine

0:13:20.000 --> 0:13:24.480
<v Speaker 1>how this large machine of government functions and where it's going. Now, again,

0:13:24.559 --> 0:13:27.679
<v Speaker 1>as I've said before, I think the president already has

0:13:27.720 --> 0:13:30.040
<v Speaker 1>a lot of tools to influence that and what you

0:13:30.120 --> 0:13:33.080
<v Speaker 1>have in the status quo embodied in cases like Humphreys

0:13:33.160 --> 0:13:36.880
<v Speaker 1>is basically a bargain between the legislature and the President

0:13:37.120 --> 0:13:41.000
<v Speaker 1>over how oversight functions will be allocated. Some of those

0:13:41.040 --> 0:13:44.080
<v Speaker 1>functions reside in the White House today already, such as

0:13:44.120 --> 0:13:47.400
<v Speaker 1>the ability to designate the scare among members of the Commission.

0:13:47.800 --> 0:13:51.280
<v Speaker 1>Others such as congressional oversight control of the budget, reside

0:13:51.280 --> 0:13:53.240
<v Speaker 1>in the Congress. One way to put it is that

0:13:53.320 --> 0:13:57.840
<v Speaker 1>it is shared oversight and accountability that engages the Congress,

0:13:57.920 --> 0:14:01.200
<v Speaker 1>the President, and indeed the Federal Court. So my view,

0:14:01.200 --> 0:14:03.360
<v Speaker 1>and this is very much based on my experience that

0:14:03.440 --> 0:14:06.080
<v Speaker 1>the FTC is a member of the Commission for a

0:14:06.160 --> 0:14:09.880
<v Speaker 1>year is chair that I was always aware of the

0:14:09.880 --> 0:14:11.839
<v Speaker 1>capacity of the White House to shape what we were

0:14:11.880 --> 0:14:14.840
<v Speaker 1>doing in key respects. That is, from the place that

0:14:14.920 --> 0:14:18.560
<v Speaker 1>we occupied on Pennsylvania Avenue. I was always aware of

0:14:18.720 --> 0:14:21.520
<v Speaker 1>both ends of the avenue, that both of them had

0:14:21.520 --> 0:14:23.320
<v Speaker 1>a lot to do to shape the environment in which

0:14:23.360 --> 0:14:26.160
<v Speaker 1>we worked in. And when I looked out the window

0:14:26.280 --> 0:14:29.680
<v Speaker 1>at the front of the building, they're also sat the

0:14:29.720 --> 0:14:34.120
<v Speaker 1>Federal Courthouse for the District of Columbia. So I always

0:14:34.280 --> 0:14:36.680
<v Speaker 1>knew that we were working in an environment when all

0:14:36.760 --> 0:14:39.800
<v Speaker 1>three could hold us to account, and I was aware

0:14:39.800 --> 0:14:41.680
<v Speaker 1>of the history that showed that they certainly would.

0:14:42.240 --> 0:14:45.640
<v Speaker 2>Slaughter has said there are two lines of pushback, one legal,

0:14:45.800 --> 0:14:47.440
<v Speaker 2>the other political. Quote.

0:14:47.480 --> 0:14:49.680
<v Speaker 4>The legal fight we're having in the court, but the

0:14:49.720 --> 0:14:53.560
<v Speaker 4>political fight is in the court of public opinion. Do

0:14:53.600 --> 0:14:56.360
<v Speaker 4>you think that the public is aware of what's happening

0:14:56.400 --> 0:14:57.560
<v Speaker 4>with these agencies?

0:14:58.040 --> 0:15:02.160
<v Speaker 1>For the broader public, I have re doubts. I suspect

0:15:02.160 --> 0:15:04.840
<v Speaker 1>that there are many in the public, for a variety

0:15:04.840 --> 0:15:07.320
<v Speaker 1>of reasons, who are aware that there's something called the

0:15:07.320 --> 0:15:11.840
<v Speaker 1>Federal Trade Commission. But if you gave the ordinary American

0:15:11.880 --> 0:15:17.520
<v Speaker 1>citizen a short quiz, true false questions or multiple choice questions,

0:15:17.720 --> 0:15:20.680
<v Speaker 1>I don't know how many would answer it in a

0:15:20.680 --> 0:15:23.360
<v Speaker 1>way that reflected a real understanding of how these agencies

0:15:23.400 --> 0:15:25.720
<v Speaker 1>function and what they do. So, if we're talking about

0:15:25.800 --> 0:15:30.320
<v Speaker 1>the US public writ large, I doubt there's a keen

0:15:30.440 --> 0:15:34.680
<v Speaker 1>awareness of the governance mechanism of the FPC and what

0:15:34.920 --> 0:15:38.720
<v Speaker 1>removal of commissioners does to that framework. The larger public

0:15:38.960 --> 0:15:44.160
<v Speaker 1>might be aware of efforts by the President to consolidate

0:15:44.200 --> 0:15:47.800
<v Speaker 1>power in the White House. They've probably noticed in this

0:15:47.920 --> 0:15:51.520
<v Speaker 1>barely six months of the second Trump presidency, that the

0:15:51.560 --> 0:15:54.280
<v Speaker 1>President is doing a number of things to exercise power,

0:15:54.760 --> 0:15:58.840
<v Speaker 1>imposing tariffs, for example, setting in motion dramatic reductions in

0:15:58.960 --> 0:16:02.720
<v Speaker 1>force for individual real agencies. And maybe they're aware of

0:16:03.160 --> 0:16:07.040
<v Speaker 1>the dismissals of heads of different institutions at a high level.

0:16:07.120 --> 0:16:10.160
<v Speaker 1>They may be aware that the presidents seeking to exert

0:16:10.160 --> 0:16:14.160
<v Speaker 1>more control over how the government operates. So that awareness

0:16:14.160 --> 0:16:17.120
<v Speaker 1>I suspect exists, and certainly to the extent of the

0:16:17.160 --> 0:16:20.360
<v Speaker 1>public she is speaking about, includes the Congress of the

0:16:20.480 --> 0:16:24.640
<v Speaker 1>United States. I assume that more keenly than the ordinary citizen,

0:16:24.720 --> 0:16:28.160
<v Speaker 1>they are very aware of the reallocation of power that's

0:16:28.160 --> 0:16:31.840
<v Speaker 1>taking place in Washington and ought to be concerned about,

0:16:32.080 --> 0:16:35.720
<v Speaker 1>especially because in the case of the FTC, when Congress

0:16:35.760 --> 0:16:40.000
<v Speaker 1>created the FTC in nineteen fourteen, their unmistakable view is

0:16:40.000 --> 0:16:42.680
<v Speaker 1>that the FTC would be accountable through the Congress. First

0:16:42.720 --> 0:16:45.760
<v Speaker 1>and foremost. Here are debate in the Senate, for example,

0:16:46.320 --> 0:16:48.640
<v Speaker 1>where members of the Senate asked, as part of the

0:16:48.680 --> 0:16:52.320
<v Speaker 1>colloquy that takes place in the legislative debates, aren't we

0:16:52.400 --> 0:16:54.800
<v Speaker 1>giving a lot of fairly open ended power to the

0:16:54.800 --> 0:16:58.600
<v Speaker 1>federal Trade Commission, shouldn't we specify more carefully what the

0:16:58.680 --> 0:17:01.960
<v Speaker 1>relevant offenses might be? And the defenders of the FTC

0:17:02.040 --> 0:17:06.240
<v Speaker 1>Act has ultimately adopted said, you need a flexible, adaptable mandate.

0:17:06.440 --> 0:17:08.600
<v Speaker 1>That's why we're putting it that way. And if the

0:17:08.640 --> 0:17:12.640
<v Speaker 1>STC ever misused that mandate, we, the Congress that created it,

0:17:12.960 --> 0:17:16.120
<v Speaker 1>could abolish it. In the words of one senator, we

0:17:16.200 --> 0:17:19.960
<v Speaker 1>created it, we could destroy it. So there was no

0:17:20.160 --> 0:17:23.679
<v Speaker 1>doubt in the minds of Congress that this institution, with

0:17:23.800 --> 0:17:27.360
<v Speaker 1>its considerable authority, will answer first and foremost to us.

0:17:27.640 --> 0:17:31.719
<v Speaker 1>So the Congress ought to be keenly aware of the

0:17:31.840 --> 0:17:38.000
<v Speaker 1>process by which the relevant oversight, responsibility and accountability mechanisms

0:17:38.200 --> 0:17:38.800
<v Speaker 1>are changing.

0:17:39.280 --> 0:17:42.440
<v Speaker 2>Can you give us the broader reasons why you think

0:17:42.560 --> 0:17:45.840
<v Speaker 2>the FTC's independence is critical.

0:17:46.680 --> 0:17:51.360
<v Speaker 1>The broader, high level reason is that the FTC exercises

0:17:51.760 --> 0:17:57.520
<v Speaker 1>significant economic policy making functions and as broad regulatory responsibilities.

0:17:57.760 --> 0:18:00.639
<v Speaker 1>I think in any economy, and certainly in our market economy,

0:18:01.119 --> 0:18:04.919
<v Speaker 1>the business community, the citizens as a whole have to

0:18:04.960 --> 0:18:07.320
<v Speaker 1>have confidence that that authority is being used in a

0:18:07.359 --> 0:18:11.600
<v Speaker 1>principled way, and then when it's used, it reflects truly

0:18:11.960 --> 0:18:16.200
<v Speaker 1>the exercise of high quality professional judgment from an agency

0:18:16.240 --> 0:18:19.520
<v Speaker 1>that has special expertise broad experience, and then when it's

0:18:19.520 --> 0:18:22.639
<v Speaker 1>making those judgments, it's making it on the basis of

0:18:22.800 --> 0:18:27.960
<v Speaker 1>sound policy analysis. That assumption and confidence vanishes if the

0:18:28.040 --> 0:18:31.600
<v Speaker 1>head of State can simply designate outcomes or point the

0:18:31.640 --> 0:18:34.359
<v Speaker 1>agency in a specific direction. I mean, it's the same

0:18:34.400 --> 0:18:38.320
<v Speaker 1>concern we have about the Federal Reserve Board and monetary policy.

0:18:38.600 --> 0:18:42.119
<v Speaker 1>Notice how the markets lose their minds when it appears

0:18:42.160 --> 0:18:45.320
<v Speaker 1>as though the Fed might lose that insallation from direct

0:18:45.320 --> 0:18:48.880
<v Speaker 1>political influence over the monetary system. I can't quite assert

0:18:48.960 --> 0:18:53.120
<v Speaker 1>that the FTC occupies the same position in the minds

0:18:53.160 --> 0:18:57.560
<v Speaker 1>of business leaders and others about its role in the economy,

0:18:57.800 --> 0:19:01.720
<v Speaker 1>but I think it is nonetheless and important pillar of

0:19:01.760 --> 0:19:04.919
<v Speaker 1>the regulatory mechanism in the US. If you take away

0:19:05.280 --> 0:19:09.560
<v Speaker 1>some measure of autonomy, especially in the decision to prosecute,

0:19:09.720 --> 0:19:13.320
<v Speaker 1>the decision to impose sanctions, the decision to do things

0:19:13.320 --> 0:19:15.920
<v Speaker 1>that in a broad sense hurt, you take away that

0:19:16.040 --> 0:19:20.359
<v Speaker 1>presumption of good professional judgment and autonomy with respect to

0:19:20.440 --> 0:19:23.800
<v Speaker 1>those functions. I think it underminds confidence in the regulatory

0:19:23.840 --> 0:19:27.680
<v Speaker 1>process itself, and at a higher level, for our entire

0:19:27.680 --> 0:19:30.280
<v Speaker 1>political economy. And our stature in the world. For the

0:19:30.359 --> 0:19:33.280
<v Speaker 1>last thirty plus years, we have been telling the world

0:19:33.560 --> 0:19:37.960
<v Speaker 1>that these key economic regulatory functions must have some element

0:19:38.040 --> 0:19:42.840
<v Speaker 1>of protection with respect to these fundamental decisions about prosecuting cases,

0:19:43.080 --> 0:19:46.359
<v Speaker 1>initiating rules, that there has to be an accountability regime.

0:19:46.640 --> 0:19:50.639
<v Speaker 1>But you can't have political leadership telling the agency to

0:19:50.760 --> 0:19:54.879
<v Speaker 1>punish enemies, reward friends, and otherwise simply be party to

0:19:54.920 --> 0:19:59.120
<v Speaker 1>a negotiation between top political leadership and individual business interests.

0:19:59.240 --> 0:20:02.320
<v Speaker 1>So once you do that, confidence in the entire system

0:20:02.359 --> 0:20:06.160
<v Speaker 1>of governments tends to erode. And if the Humphries executive

0:20:06.680 --> 0:20:11.600
<v Speaker 1>protections against removal except for good cause disappear, that's a

0:20:11.640 --> 0:20:15.080
<v Speaker 1>step in the direction of diminishing that confidence and legitimacy

0:20:15.160 --> 0:20:16.400
<v Speaker 1>for the regulatory process.

0:20:17.000 --> 0:20:17.840
<v Speaker 2>I want to get.

0:20:17.640 --> 0:20:22.879
<v Speaker 4>Your input on the bill to consolidate federal antitrust authority

0:20:23.000 --> 0:20:27.840
<v Speaker 4>solely within the Justice Department's Antitrust Division, so that would

0:20:27.920 --> 0:20:33.120
<v Speaker 4>lead the FTC as a consumer protection agency. What's your

0:20:33.160 --> 0:20:33.760
<v Speaker 4>take on that.

0:20:34.320 --> 0:20:36.639
<v Speaker 1>I think it's a bad time to do that. I

0:20:36.680 --> 0:20:40.640
<v Speaker 1>think the question of whether you want two federal agencies

0:20:40.960 --> 0:20:44.159
<v Speaker 1>to occupy in many ways the same policy domain is

0:20:44.200 --> 0:20:48.040
<v Speaker 1>a very useful and important issue. That's worthy of debate.

0:20:48.480 --> 0:20:52.320
<v Speaker 1>I would hope that that debate would involve a more

0:20:52.440 --> 0:20:56.520
<v Speaker 1>nuanced than careful consideration of what the FTC has brought

0:20:56.560 --> 0:20:59.480
<v Speaker 1>to the mix. I mentioned the FTC because the assumption

0:20:59.520 --> 0:21:02.280
<v Speaker 1>always is, as you say, all that authority will be

0:21:02.280 --> 0:21:04.760
<v Speaker 1>given to the Department of Justice. The main reason I

0:21:04.760 --> 0:21:06.720
<v Speaker 1>think it's a bad tub to do this is that

0:21:06.800 --> 0:21:11.560
<v Speaker 1>in the area of all things digital and information systems platforms,

0:21:11.920 --> 0:21:14.879
<v Speaker 1>there is a growing global awareness that the solution to

0:21:15.000 --> 0:21:18.920
<v Speaker 1>problems observed in that area and the disciplines that have

0:21:19.000 --> 0:21:21.080
<v Speaker 1>to be brought to bear to come up with good

0:21:21.119 --> 0:21:27.000
<v Speaker 1>policy foundations include competition law, antitrust, consumer protection law, and

0:21:27.119 --> 0:21:31.080
<v Speaker 1>privacy data protection law. There is one agency in the

0:21:31.119 --> 0:21:34.640
<v Speaker 1>world that has all three of those mandates under its

0:21:34.720 --> 0:21:38.280
<v Speaker 1>umbrella in its portfolio. That's a Federal Trade Commission, which

0:21:38.320 --> 0:21:43.560
<v Speaker 1>also has distinctive information gathering powers and report writing powers,

0:21:43.960 --> 0:21:47.359
<v Speaker 1>has a collection of policy making tools that can bring

0:21:47.840 --> 0:21:51.400
<v Speaker 1>all of these policy domains to bear on specific issues.

0:21:51.840 --> 0:21:54.679
<v Speaker 1>I think in a time when we are seeing that

0:21:54.920 --> 0:22:01.240
<v Speaker 1>policy making involving information systems digital AI involve an intersection

0:22:01.320 --> 0:22:04.399
<v Speaker 1>of these different policy areas, I think that's exactly the

0:22:04.440 --> 0:22:09.040
<v Speaker 1>wrong time to divest the FPC of its Competition Policy mandate,

0:22:09.400 --> 0:22:14.000
<v Speaker 1>also because I think the Competition Policy Mandate has brought

0:22:14.320 --> 0:22:18.720
<v Speaker 1>useful discipline and direction to the consumer protection program. And

0:22:18.800 --> 0:22:23.040
<v Speaker 1>if you sever the competition mandate from the Consumer Protection mandate,

0:22:23.440 --> 0:22:26.400
<v Speaker 1>I think the consumer Protection Mandate and the Data Protection

0:22:26.520 --> 0:22:27.919
<v Speaker 1>Mandate they both suffer.

0:22:28.400 --> 0:22:30.760
<v Speaker 2>It's always great to have you on Bill, Thanks so much.

0:22:31.320 --> 0:22:35.480
<v Speaker 2>That's former FTC Chair William Kavasik, a professor at George

0:22:35.520 --> 0:22:38.600
<v Speaker 2>Mason University School of Law. And that's it for this

0:22:38.760 --> 0:22:41.480
<v Speaker 2>edition of The Bloomberg Law Show. Remember you can always

0:22:41.480 --> 0:22:44.399
<v Speaker 2>get the latest legal news on our Bloomberg Law Podcast.

0:22:44.680 --> 0:22:47.720
<v Speaker 2>You can find them on Apple Podcasts, Spotify, and at

0:22:47.880 --> 0:22:52.919
<v Speaker 2>www dot Bloomberg dot com, slash podcast Slash Law, and

0:22:53.000 --> 0:22:56.040
<v Speaker 2>remember to tune into The Bloomberg Law Show every weeknight

0:22:56.160 --> 0:22:59.560
<v Speaker 2>at ten pm Wall Street Time. I'm Jim Grosso and

0:22:59.560 --> 0:23:01.080
<v Speaker 2>your listen listening to Bloomberg.

0:23:05.880 --> 0:23:06.120
<v Speaker 4>Hmm