On November 22, Sen. John Thune, R-SD, and Rep. Fred Upton, R-Mich, wrote a letter to Federal Trade Commission Chairwoman Edith Ramirez. The lawmakers wrote to “express concerns about the pending Federal Trade Commission agenda in light of the recent election and upcoming transition,” and told Ramirez any action “taken by the FTC before the designation of a new chairman will receive enhanced scrutiny.” Thune and Upton said they “strongly encourage” the commission to avoid focusing on “complex, partisan or otherwise controversial items” until the new administration is in place.
Given that the Obama administration was in power for two terms, the FTC is undergoing a shift in leadership – and possibly agenda – that it hasn’t seen in almost a decade. While an independent and bipartisan agency, there can only be one leader, and that’s the chairperson – a political appointee.
So what changes now at the FTC, and how much does the political persuasion of the leadership affect the agency’s agenda and priorities?
Janis Kestenbaum, an attorney at Perkins Coie and formerly Ramirez’s chief advisor, said it’s up to Trump as to who he’ll pick to lead the agency. Because the chairperson is a political appointee, however, we can assume he or she will be a Republican. The exact timing of that change is unknown, however.
Ramirez is a Democrat appointed by President Barack Obama as commissioner in 2010 to take over Debbie Majoras' seat, and has served as chairwoman since 2013. She has continued to serve, though her seat's term officially expired in September 2015, at Obama’s request, which isn’t uncommon in times of political shifts. It wouldn’t make sense to appoint a new commissioner with six months left in the Obama administration. Just getting a Senate confirmation could take as long. It’s yet unknown when she’ll step down.
“It seems quite likely that at some point after the inauguration, the chairwoman would leave so that a Republican can be named chair,” Kestenbaum said.
The obvious choice as the new chairperson seems to be current FTC Commissioner Maureen Ohlhausen, who’s served as a commissioner since 2012. She’s a logical pick, Kestenbaum said, because she’s both a Republican and already a Senate-confirmed commissioner and so in a position to take over without administrative hurdles.
“Whether that would be on a permanent basis or interim or acting basis is just a question mark at this point,” she said.
Former Commissioner Julie Brill, who resigned from the FTC earlier this year for private practice, said it wouldn’t be surprising should Ohlhausen be tapped.
“It is quite possible the incoming administration will choose Maureen Ohlhausen to serve as chair moving forward. Not just acting chair, but permanent chair,” Brill said. However, she was quick to add the administration may well choose to bring in someone completely new. “Everybody is thinking about what might happen, but the truth is that nobody really knows at this point in time.”
Looking at the FTC’s history for clues, it would be logical to assume the next chair would come from within the FTC. Most chairs have had some experience at the agency: Former Chairmen Jon Leibowitz, William Kovacic, Roberty Pitofsky, and Tim Muris all had agency experience – though Muris and Leibowitz had taken on gigs outside the agency just before their appointments as chair. Chairwoman Ramirez also came from within the agency.
As to whether the shift in leadership from Democratic to Republican will have an effect on the agency in its priorities, Lydia Parnes, now at Wilson Sonsini Goodrich & Rosati (where Wright is also of counsel) but formerly director of the Bureau of Consumer Protection at the FTC, said while the vast majority of the FTC’s consumer protection work has had bipartisan support, on the margins, “there are typically some issues that are affected by the agenda set by the agency’s leadership … I think it’s fair to say that each FTC chair has come in with his or her agenda, and those agendas are implemented by their bureau directors.”
"The change does not happen overnight. It’s not as though we’re going to have a totally new commission on January 21." -Janis Kestenbaum, Perkins Coie
“It can lead to significant changes in priorities,” Kestenbaum said, adding, however, “The change does not happen overnight. It’s not as though we’re going to have a totally new commission on January 21. The process of a commissioner going from formal nomination to confirmation from the Senate can be anwhere from a couple of months to six months – or more.”
It’s possible that Ramirez could stay until the process is complete and a new commissioner sworn in, Kestenbaum said. This seems particularly possible given the FTC's current composition.
There are already two vacancies at the commissioner level. Democrat Brill's seat, as mentioned earlier, plus that of Commissioner Josh Wright, a Republican, who resigned in 2015. That leaves just two commissioners, Ohlhausen and Terrell McSweeny, a Democrat, should Ramirez step down following the inauguration. (Interestingly, Wright is reportedly President-elect Trump's point-person for the FTC transition. Asked to comment for this story, he declined.)
Kestenbaum said it doesn’t much matter that the commission is rather lean for now.
“Both have been there for awhile, and while they may not see eye to eye on every issue, it’s a very consensus-oriented agency,” she said. “I don’t think that change would likely be a dramatic one.”
“The FTC has an incredibly important mission, both on the consumer protection and competition side,” she said. “And I think anybody who comes in will recognize that.” -Lydia Parnes, Wilson Sonsini
By law, the agency must be bipartisan: No more than three commissioners from any one party. So Trump will have to find at least one Democrat to add to the Ohlhausen/McSweeny mix.
Regardless, Parnes said, despite shifts in priorities and agendas that may or may not come under new leadership, the show must go on.
“The FTC has an incredibly important mission, both on the consumer protection and competition side,” she said. “And I think anybody who comes in will recognize that.”
She added that privacy enforcement really has to continue to be an important part of the agency’s agenda.
“One reason that’s true," she reasoned, "is because it will be so important to the continued operation of Privacy Shield, which is important for U.S. companies and is not partisan at all. I would, however, expect privacy enforcement to reflect a greater emphasis on consumer harm.”
However, Trump (who does have a history with the FTC, on the anti-trust side of things) has already earned a reputation for being unpredictable. The FTC may find itself filled with three commissioners few saw coming. There's no question that the organization many have called the world's most powerful privacy regulator faces a great deal of uncertainty.
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