A Conversation with FTC Commissioner Andrew Ferguson Hosted by Alden Abbott

Transcript

Alden Abbott: Greetings. I'm Alden Abbott, Senior Research Fellow at Mercatus Center, a research organization at George Mason University that advances knowledge about how markets solve problems and help us lead happier, healthier, and richer lives. I oversee Mercatus' research on competition policy. Today, I'm delighted to host a webinar, Fireside Chat, with Andrew Ferguson, who was sworn in on April 2, 2024, as a commissioner of the Federal Trade Commission.

He most recently served as Solicitor General of the Commonwealth of Virginia. Prior to that, he served as Chief Counsel to US Senator Mitch McConnell of Kentucky, the Republican leader, and as Republican Counsel on the US Senate Judiciary Committee. He also practiced law at several Washington, DC law firms. Mr. Ferguson earned his undergraduate and law degrees from the University of Virginia, where he did brilliantly.

After law school, he clerked for Judge Karen Henderson on the US Court of Appeals for the DC Circuit and for US Supreme Court Justice Clarence Thomas. As a fellow Virginia graduate, I'm quite impressed by Commissioner Ferguson's significant achievements at a very young age. Welcome, Commissioner Ferguson.

Now let's get started. I'm going to ask you several questions, to which I hope you'll respond, I'm sure, in brilliant fashion. First, Commissioner, what got you interested in the FTC and its work? I know, having been in the Economics Honors Program as an undergraduate at the University of Virginia, that's where I got my first taste of antitrust, in a class taught by Professor Ken Elzinga. How about you?

Commissioner Andrew Ferguson: Thanks, Alden. I'm really happy to be here. I'm really happy to be talking with you. Before I answer, I just want to say, I'm here in my sort of individual capacity. I don't speak for the Commission. I don't speak for my colleagues. This is the disclaimer I have to give at all these events. Ken Elzinga, UVA. Yes, my intro to econ actually was Ken Elzinga.

I took his econ 101 course my first semester, first year as an undergrad, which meant that my introduction to microeconomics and to antitrust largely centered around beer, because, as you well know, Dr. Elzinga is a renowned expert in the American beer markets and has participated in litigation as an expert in the American beer market. There's no better way for a college student to get introduced to the economics of antitrust than to have a bunch of stories from one of the university's most famous professors about beer. I got interested in the Commission's work. My real introduction to antitrust was at UVA Law School, where I took antitrust with Tom Nachbar, who continues to teach antitrust there now. Otherwise, the only thing I had known about the FTC before I took that class was that it was the commission at issue in Humphrey's Executor, and wasn't really familiar with its work until I took that antitrust class. I really liked it. It was one of the most interesting black letter law classes I took at UVA.

After my first clerkship on the DC Circuit, I went into private practice to practice antitrust law and did that for a while and practiced-- mostly litigated, but also did deal work and conduct investigations that had me meeting with staff at the commission as a young associate, meeting with staff at the Department of Justice as a young associate. My interest started mostly academically.

Then my interest in the Commission, when this commissioner slot became vacant, had arisen from my time on the Hill, which was the first time I had spent thinking about competition as policy rather than as black letter law. I don't know what your experience is, but when you're representing clients in antitrust cases, you tend to search out the theory that's most likely to deliver your client's victory, and the macro policy questions are for the birds.

When you're on the Hill, you have an opportunity to think about it differently. My interest in the Commission's work as an antitrust enforcer and the role that it plays in American political economy, that first rose from my time on the Hill.

Alden: That's interesting. I served early in my career at the FTC, but then later in the Antitrust Division. I remember this was quite a few years ago and, at the time, I was working on some guidelines, and I asked management, whom should I contact at the FTC? I was told at the time, oh, we don't pay attention to what the FTC is doing. We're doing the guidelines, period. Something called vertical restraints guidelines. Things that have changed a bit since then.

I think, obviously, they had to decide who would look at what merger, but again, things have changed. Let's look at the big picture to start. What specific goals, if any, have you set for yourself as a commissioner. Relatedly, what would you like to focus on? To be more concrete, are there any particular reforms, whether in competition, consumer protection, or agency process that you believe merit exploration by the Commission?

Commissioner Ferguson: That's a good question. I'm in my second month, and my goal at this point is still just to dig out my way from the pile of work that was waiting for me when I got here. The Commission, as probably everyone on this call knows, has been super active the last couple of years, not just with regard to enforcing the competition and the consumer protection laws, but also in rulemaking, which has been part of the Commission's docket at least since the '70s, but there's been a real uptick over the last couple of years in rulemaking, and we had a couple big rules arriving when I arrived.

In terms of reforms for Commission process, I'm still trying to figure out what the Commission processes are. I've got a lot of help from staff figuring out the sometimes arcane procedures here at the Commission. I don't have any reforms to articulate to a process I'm still learning. In terms of my goals at the Commission, what I said at my hearing, I still think is true, is, at least on the competition side, I think the fundamental competition question for us is Big Tech.

I was involved in a big Section 2 suit against Google when I was Solicitor General, and I think sort of coming to grips with the role that Big Tech plays in American markets and the role that the antitrust laws should play in protecting those markets and in ensuring that Big Tech sort of plays by the rules, I think, is like the fundamental question that the Commission is going to have to answer and that we as Americans need to answer. I think that's sort of the Big Tech is sort of the issue in which I'm most interested.

I'm also interested in my time as SG on questions of sort of cross and co-ownership. The House Judiciary Committee put out a big report yesterday alleging that there's been collusion among asset managers with regard to whether companies that they have ownership stakes in can invest in the fossil fuel industry, and whether they have alleged that the asset managers were sort of colluding to drive down investment in fossil fuels at a time when Americans are paying, at least I am when I'm filling up my RAM, are paying an incredible amount of money for gas.

This is an issue that states had been looking at when I was Solicitor General and an issue that I think is sort of odd that it's gone unremarked by the federal competition authorities for the last several years and one that I'm interested in the FTC exploring. Because, if there is sort of collusion either among companies that asset managers control or among the asset managers, and it's affecting gas prices, I think that's exactly the sort of thing that should attract agency attention.

At this point, the stuff in the Judiciary Report is super interesting, but it's allegations. We'll have to see sort of what the facts end up bearing. The Judiciary Report was incredibly thorough and well done, but I'm interested in the Commission exploring that problem further.

Alden: That's very interesting. That's a different sort of big company issue which we haven't heard about a great deal at the Commission in recent years. We'll see. Now, you had a background, sort of a jurisprudential background, looking at legal theory issues as a Solicitor General and Supreme Court clerk, looking at statutory construction and constitutional authority issues, undoubtedly.

How does that inform your thinking about the scope of the Commission's authority? Particularly, I noticed you joined Commissioner Holyoak in this stance on a new non-compete rule, Health Breach Notification Rule, the ExxonMobil-Pioneer natural resources merger settlement, and most recently, the denial of respondent's motion for continuance of an evidentiary hearing, that's a mouthful, and the Kroger-Albertsons merger matter, which has gotten a lot of attention.

Would you or could you like to comment on any of these dissents and how they fit into your view of potential FTC legal overreach more broadly?

Commissioner Ferguson: Sure. Fundamentally, so when I first took this job, a lot of people asked me, what is it like now going from a litigator to a policymaker? My response has generally been, I don't think I'm a policymaker. I'm a lawyer with a law enforcement job, which is different than the litigating job I had before. I don't see myself as a policymaker. I don't think that's the right way to see us.

At the end of the day, Congress passes laws that embody sort of the policy that they want for our national political economy. Then the executive branch of which this agency is a part enforces those laws. I think, in basically every rulemaking and enforcement matter, the bulk of my work is reading statutory text, assessing facts or allegations depending on the context. If they match up with the prohibitions that the statute contains, then the agency takes action. If they don't, I think it doesn't.

I don't see my role, and I would resist pretty strongly that it is my role, to sort of make policy. I think Congress has made policy and then left it to the FTC and DOJ and other parts of the government to enforce those policies. I think that that's my job. Obviously, some discretion in allocating enforcement resources goes into that. I think, from the threshold sort of way of thinking about my job is not as a policymaker, as a law enforcer.

I think, in the rulemaking context, I actually think that that's easiest, especially coming from my background as a litigator. Rulemaking and the sort of like administrative law questions that it touches on are all about interpreting text, interpreting organic acts, interpreting the APA, and interpreting the Constitution.

My dissent in the non-compete rule, I didn't really resist the sort of policy urges leading to the non-compete rule, although, I think there are lots of good arguments that courts have been recognizing for half a millennium that non-compete agreements can, in some circumstances, be pro-competitive. In my view, the threshold question is, did Congress give us this task? That's just a textual question. That's the sort of question that, lawyers should be comfortable doing.

I sort of feel like that's my sweet spot is, when the question being teed up is, do we have the power, statutory and constitutional, to do this? Those are the easiest ones for me. The rulemaking, the Health Breach Notification Rule was a little different. We definitely had the power to issue the rule. The question is whether we were interpreting the text of the statute right. I don't think we were.

I think that the non-compete rule was so interesting, both because non-compete agreements and their regulations go back so many centuries, number one. The Commission was like pretty radically departing from the longstanding consensus view of reasonableness that had governed these before. Number two, it touched on almost every interesting question in administrative law on this, what words does Congress use to confer substantive rulemaking power?

How far does that conferral of substantive rulemaking power go? What sort of words does Congress need to use to confer rulemaking power that don't become an unconstitutional delegation of legislative authority? Then what quantum of evidence is necessary to satisfy the APA? The rule touched on all of them, which made it super interesting. It was also the first thing going when I got here.

We voted on that rule less than a month after I arrived. The rule is hundreds of pages long. It took a fair amount of work and a lot of help from the talented professional staff here to get up to speed on the rule. That was really fun because that's like core sort of lawyer work is-- it's core administrative law work. It's the type of thing that I was doing as SG and what I'm most comfortable with. To close the loop on that answer, I will fight to the death that I'm a policymaker.

If the question is, what's good economic policy? No idea. That's not my training. I also don't think that's what Congress asked us to do. I think Congress came up with what it thought were the preferred policies for our unique American political economy and told the FTC go out and enforce them. I see my job primarily as an interpreter of text and then an enforcer of the laws.

Alden: Well, that's quite interesting because I understand fully, in statutory and constitutional analysis, but the FTC is sort of interesting. It's got a Bureau of Economics with 70-plus PhD economists. Economic analysis, like it or not, has been incorporated in merger guidelines. Actually, people would say since '82, but actually since '68, the economics was at a different point at that time.

Now, of course, you have the 2023 merger guidelines, which incorporate a lot of sort of structuralist economics ideas. You said you're not an economist. Fine, obviously that's not a prerequisite for the position. You're a lawyer, which is key, but do you have any concerns about the guidelines? What role do you think they should play in merger assessment? Going forward, do you think they should be revised, rescinded, or left as is?

Commissioner Ferguson: I think sort of stated abstractly, merger guidelines are good for the same reason that, again, stated very abstractly, policy statements are often good because they are an indication to the markets about how the agency Congress is tasked with enforcing the underlying legal regime intends to enforce it.

I think that, by and large, since '68 when the first guidelines came out, the guidelines have been very helpful because parties that intend to engage in some sort of merger transaction at least have a pretty decent sense in advance of how the agency is going to look on that transaction. When courts sort of defer, at least to some extent to the guidelines, that means that all of the institutions involved in merger control, the parties that intend to consummate the transaction, the enforcers that determine whether the law is being violated, or the transaction should be enjoined, and then the judiciary that ultimately decides whether the injunction should issue.

If they've all sort of coalesced around the guidelines, that lends itself to predictability, to some certainty. I think that that's promotes efficiency. I think that's a good thing. I also think that means that the guidelines work best when there's some stability. If the guidelines sort of go change back and forth every time there's a change in administration, they're not going to perform the function that they're supposed to perform, which is to provide some certainty and predictability very well if they're changing every four or eight years.

With the current guidelines, look, I think a lot of what's in the current guidelines does in fact just restate longstanding law. I think that the dispute has largely been-- I think I saw the other day, one of the law firms had put out a table coterminous with the merger guidelines, that categorized the precedent cited in the merger guidelines by decade, and suggested, look, most of the precedent here is from before the 1980s. That doesn't reflect how the courts actually think about this anymore.

As far as I know, having read them, I don't think any of the cases that are cited in the guidelines have actually been overruled. It sort of points to like some tension in the cases where, cases after the 1980s, basically after a certain book by a former judge or future judge at the time came out, started to think about antitrust economics somewhat differently than they were thinking about antitrust economics before.

I think much of what's in the guidelines is in fact restating stuff from previous guidelines and from the cases, and in that sense is sort of promoting predictability. Other things in the guidelines, I think, are pushing the envelope a little bit. I think whether that's going to be useful is largely going to depend on whether courts come around to the enforcers' views on the issues in the guidelines.

On the question of, should they be rescinded, reformed, whatever, I don't think they should be categorically rescinded. I don't think we should get into a cycle where we are just rescinding guidelines every time the chairmanship changes hands. The guidelines will become useless to everyone if everyone thinks that they just embody the very particular preferences of a particular party.

I am open to reforming them. The guidelines have been rescinded and replaced or reformed over and over since the '60s. That's supposed to reflect sort of changes in the body of law that we're enforcing. Just categorical rescission and starting over, that doesn't lend itself to agency credibility. If the agencies are rescinding these over and over, the guidelines don't become trustworthy. I'm sure there are some things in the guidelines that I would be open to reforming.

Again, I think much of what's in there sort of reflects where the law has in fact been for some time. I attended an event around the time that they came out and Todd Zywicki, who's a talented scholar and a friend of mine, whom I'm sure you know as well, hosted an event discussing these things. His response to the guidelines, which I think has the ring of truth to it, was these are actually a lot more moderate than they might have been, given where folks on the left were urging the agencies to go, and that this looks a lot more grounded sort of in doctrine and case law than they might otherwise have been.

I think that there's some truth to that. They do depart in some ways from the 2010 guidelines, but I don't think that that is grounds for their complete rescission. Unless we start getting case law from the courts telling us we don't care what these guidelines say anymore, maybe it's time to rethink that. At least at this stage, I don't think it's good for us to get into a sort of cycle of recrimination where the parties just keep rescinding each other's guidelines.

Alden: Okay. Well, interesting. Let's go to another non-controversial topic, monopolization. You already alluded to going into monopolization, but obviously, there are two FTC cases in litigation involving monopolization questions, made of Facebook and Amazon. Now, obviously, I know you can't comment, and I know that as a former general counsel, on particular matters, but is there anything you'd like to say about your general approach to monopolization issues?

Commissioner Ferguson: Sure. I'm going to answer that, but I'm going to start by talking about something slightly different to key up my answer. When I was working on the Hill, and this is still true, there were a lot of calls from both sides of the aisle to undertake pretty substantial reforms to the antitrust laws. Much of this was premised on the view that the antitrust laws, as they had been interpreted by the courts and largely by enforcers since the 1980s, were inadequate to the task of confronting the modern economy.

That the antitrust laws either needed to be updated wholesale, or they needed to be reformed to address particular practices carried out in particular markets, Big Tech being the most obvious example. When I was Solicitor General, the Attorney General explored, alongside the Department of Justice, suing Google on a Section 2 claim for its monopolization of the ad tech markets.

We ended up doing it in a big coalition, bipartisan coalition of states where I was representing Virginia and New York and California and Tennessee all in the same action, which is unusual, alongside the United States and the Eastern District of Virginia. I think the lesson that I drew from that was, Section 1 and Section 2 aren't perfect because no law is perfect.

I don't think we need to discard them entirely every time there are new markets or business practices or new innovations. I think that there's a lot of work that the antitrust laws, even as we understand them after Judge Bork wrote his book, can do to protect American consumers from Big Tech overreach to the extent that that's taking place. I just think that for a while there was sort of a lack of political will to take those tools and apply them to these new contexts.

Maybe you disagree, but in my view, the theory articulated in United States and Virginia against Google isn't a really novel Section 2 theory, it's big. It's not really novel. It mostly focuses on tying practices and then a series of acquisitions that solidified a monopoly that they had largely acquired through tying. Those are all traditional antitrust theories.

They're big, and they're being applied to companies that we really hadn't been applying the antitrust laws to, but it's pretty run-of-the-mind Section 2 case if you exclude the size. My view is informed a lot by my experience in that case, which is, monopoly itself is not illegal. That's been black letter law for a very long time. That was black letter law before Judge Bork wrote his book.

There are lots of things monopolists can do, tying being a great example, that solidify a monopoly in a way that's really, really terrible for consumers. I've got no problem with the enforcers being aggressive in enforcing Section 2. I think that Section 2, frankly, has probably up until quite recently gone relatively under-enforced, partly because I think of a lack of political will, which I understand partly because of theories of political economy held by the enforcers.

This one, I get this one, a fear that if the government intervenes too quickly in a market, even under Section 2, we're going to stifle innovation. In meetings that I've had with my counterparts in other countries' enforcement apparatus, one of the things they continue to marvel about is how easy innovation seems in America, and the bubbling cauldron of new ideas and new practices and new products that the United States continues to produce.

We don't want to squelch that. We also don't want those innovative companies to become entrenched, unassailable leviathans. I think that's what Section 2 can do. I think that was what our Section 2 case against Google is trying to do is, Google innovated a lot and did a lot of good, but it appears to have entrenched a monopoly in a way that is not helpful for consumers. That's when the agency should act.

Alden: Okay. We're marching through the different sections of the antitrust laws. Now, let's look at Section 1, algorithmic collusion. Now, FTC has shown some interest in the topic and taken an aggressive view on that in public interest filings and in public statements. Would the issue of collusion better be handled by the Justice Department, which has criminal prosecutorial authority over price fixing that the Commission lacks?

Commissioner Ferguson: That's a good question. I think that, as with much of many of the antitrust laws or at least many of the facets of the antitrust laws, DOJ and the FTC spring different institutional competence, and I think sometimes it's good for them to both work on something. Obviously, the only part of the government that can bring criminal prosecutions under any law is the Justice Department.

Other agencies, not just the FTC have overlapping civil enforcement authority that overlaps with the Justice Department's criminal authority. SEC enforces the security laws civilly all the time. If you're going to prosecute someone criminally for that, that has to be the Justice Department. in terms of collusion, I think one of the advantages that the FTC has as a multi-member bipartisan commission is that multi-member bipartisan commissions were created and I think tend to sort of stoke deliberation and care, and test theories internally before marching them out the door.

Particularly on algorithmic collusion, which is taking a very, very traditional antitrust theory of just ordinary collusion, people putting their heads together to raise prices or suppress output or divide markets, and adding into it this new wrinkle of algorithms, where the collusion, at least the intentionality of the collusion, may not be super obvious. I don't think it's a bad thing to have the FTC and its deliberative process participate in investigating and if necessary, enforcing the antitrust laws with regard to algorithmic collusion.

For the same reason, I think it's good that the FTC does this in other contexts. Congress set up the Commission in a bipartisan way, in part for it to develop expertise in this area, which I think it has, or in the enforcement of the consumer protection and the competition laws. Also, because having multiple people have to come together and reach a consensus to make a decision promotes sound decision-making.

I think the Commission does its best work when it's voting 5-0, and probably does its least effective work when it's 3-2. The fact that the Justice Department can enforce the laws, the competition laws, criminally, I don't think that that portends anything in particular for the FTC. I think what the FTC does best is have its five members look at a subject and decide whether to bring in a consumer protection or a competition enforcement action. That's as true for algorithmic collusion as it is for any other aspect of the competition laws.

Alden: Okay, that's interesting. Certainly, the FTC has a history in having a number of settlements dealing with invitations to collude, which falls short of an agreement. It has historical involvement. Now, you've already alluded to the consumer welfare standard, which has been recognized by the Supreme Court since 1979 as key and endorsed by, basically, in different manners but on a bipartisan basis by antitrust enforcers since the Reagan days.

The Biden administration has moved away from this consensus, and you have statements both from the Justice Department and FTC support consideration of a wide range of factors apart from consumer welfare. What are your thoughts on the consumer welfare standard? Did that remain the focal point of all antitrust enforcement?

Commissioner Ferguson: My view is that my job in bringing enforcement actions, or in deciding whether to vote to bring an enforcement action to state it better, is not particularly different from what a judge would do in a case. It's to open up the text of the statute, try to figure out what its original public meaning is, define the principle that that public meaning portends, and then apply that principle to the question in front of me.

I think what Congress had in mind in the policy that it was trying to enact is definitely a part of that textual interpretation process. I don't think that my job is just to basically consult the economists on whether this moves surplus from consumers to suppliers and then to vote on that basis. I think the question is, what was Congress prohibiting in the antitrust laws?

Look, I've read Judge Bork's book now twice. It's like a tour de force of writing. He's a super talented writer. I think one of the interesting things about it is a lot of it bears a lot of similarity to the way that we do originalism now, but not all of it. I think that the sort of driving force behind Judge Bork's book was judges all across the board, not just in antitrust. This was the problem Judge Bork was confronting in his famous article on Neutral Principles.

Judges appear to be making everything up as they go along in almost every area of the law, constitutional law, antitrust law. The law is becoming dangerous, incoherent. But, even more terrifyingly, we are on the cusp of basically being ruled by men and women in black robes, just making up principles sort of as they go. This is very terrifying. We need something to constrain that discretion.

The thing that he developed, looking partially at legislative history, was what we call today the consumer welfare standard. I think that my job is to figure out what was Congress prohibiting in the Sherman Act. I think Judge Bork sheds a fair amount of light on that. I also think that, when a lot of people talk about the consumer welfare standard, what they mean is that the only thing the antitrust laws care about are price and output, and basically should be blind to considerations other than those.

I don't even think that's right. I also don't think that's what the cases since 1979 say. They care about things like consumer choice and innovation and other aspects of competition that are at least related to price and output but aren't price and output directly. I think it's a stretch to read the Sherman Act and say that the only problem with monopoly that they cared about when the Sherman Act and the Clayton Acts were adopted were just price and output. I think there were other things, other ways that monopolies affected people's lives that were leading to concerns.

Now, I think the cases at this point are unambiguous, that the principal question in antitrust cases is, what will be the price effects of this restraint or this transaction, and what will be the output effects? I think that, when a lot of people talk about the consumer welfare standard now, they mean put on blinders and don't think about anything other than price or welfare.

I don't think that, A, that has never been the law. B, that's not what the Supreme Court says. C, that's a mistake. Now, I know that there are calls to use antitrust basically as a panacea to solve a huge variety of social ills. I also don't think that that is a fair reading of the law. For example, I've heard calls, for example, to use the antitrust laws to promote labor organization or use the antitrust laws to promote racial justice.

I think that that is basically impossible to square with the antitrust laws. Insofar as when someone says that the antitrust laws are governed by the consumer welfare standard, what they mean is the antitrust laws care about nothing but price and output effects. I just don't think that that's the law. I don't think that's ever been the law. I don't think that's how the Supreme Court thinks about it now.

Again, like I said earlier, and I'm just going to keep beating this drum, I'm a Justice Thomas clerk, like it's unavoidable. I think the question I need to ask in every case is, the law that I'm being asked to enforce, what was its original public meaning? What principle does that public meaning establish? How does that principle apply to the question in front of me today?

I think Judge Bork shares a fair amount of light on that, but I don't think it's right to just sort of outsource the antitrust laws to the antitrust paradox. I think we as enforcers need to grapple with the original public meaning on our own.

Alden: Right, that's interesting. There's a lot of discussion, a lot of different writers have written about even the original public meaning and trying to ferret that out. Certainly, still related though to the consumer welfare standard, of course, we have a 2022 policy statement on unfair methods of competition voted out with, as you know, strong dissent by Commissioner Wilson, and basically eliminating a bipartisan 2015 policy statement on unfair methods of competition, which referred to consumer welfare.

What are your views on the latest statement? Commissioner Wilson seemed to say that, basically, anything that a majority of the Commission viewed as somehow unseemly or bad looking business conduct could be deemed an unfair method of competition, which goes way too far, what she was saying. What are your thoughts?

Commissioner Ferguson: Yes. I'll start at the top. I think I agree with the 2022 statement in the following sense. I believe it is correct that Section 5 does not prescribe merely conduct proscribed by the other antitrust laws. That has been the uniform view of the Supreme Court, at least in interpreting Section 5. First of all, it would be weird for Congress to have used the phrase unfair method of competition in order to enshrine only violations of the Sherman and Clayton Acts when the Sherman and Clayton Acts use different language.

That would violate the longstanding candidate interpretation that, when Congress uses different words, it intends them to have different meaning than the other words. It would be very weird to limit it, I think, to the Sherman and Clayton Acts, number one. Number two, I got into this in preparing the non-compete dissent. It's been the uniform view of the Supreme Court almost from the draw that Section 5 is broader than the antitrust laws, and that they at least included the other antitrust laws, but that they prescribe broader conduct.

I think that the 2022 statement is correct, that Section 5 is not limited just to violations of the Sherman and Clayton Acts. I think just as a matter of the way that textualists interpret statutes, it can't be. It doesn't make any sense for Congress to have spent all the effort it did coming up with different words if all it meant was the Sherman and the Clayton Acts.

There's a theme running through judicial review of our Section 5 decisions, which is, look, when the Commission is enforcing violations of the antitrust laws or things that are tied to the spirit of the antitrust laws, we, the courts, will be more hands off in reviewing the FTC's decisions because they're more closely tied to the sorts of legal violations with which we are familiar, with which the Commission is familiar, and with which the regulated public is familiar.

When it gets away from that, we will take a closer look at it because we recognize that unfairness is a capacious term and that hyper-aggressive or disingenuous Commission could use it just to go after any conduct that made them feel queasy, and we don't think it can be that. It has to be tethered to some sort of public policy rationale about business practices.

I think it's been a uniform view of the Supreme Court and the Courts of Appeals, that when we're enforcing the Sherman and Clayton Acts, we get more deference. When we are sort of developing new theories of liability, they're going to look much more closely at what we do. I think that mirrors how I feel about Section 5 claims.

When the Section 5 claim I'm presented with is either a Sherman or Clayton Act violation or very closely tied to the sort of conduct that the Sherman and Clayton Acts prohibit, I feel pretty confident about Section 5. When we get away from that, I'm going to look at it more askance, going to conduct a more searching inquiry, and I'm going to spend more time playing with the text of Section 5 to ensure that I feel comfortable.

Look, Congress chose very intentionally open-ended indefinite language and left it to the Commission to come up sort of with the rules of the road. I think in light of Schechter, that creates a real non-delegation problem in the rulemaking context, which is one of the reasons I voted against the non-compete rule. In our adjudicatory context, I think it does mean that we have authority to prescribe conduct other than that which is prescribed by the Sherman Act and the Clayton Act.

I think, when we're doing that, we need to be very, very, very careful and conservative, not in a political sense, sort of in a methodological sense, to ensure that we aren't just going around looking for stuff we don't like and announcing that it's proscribed. That is consistent with how the courts have been understanding Section 5 since at least the 1930s.

Alden: Right. Based on that, I guess, would you just leave the latest statement alone or suggest a revision of it?

Commissioner Ferguson: That's a good question. I have not thought through that. I will say that, in fact, the 2015 statement-- I do not personally read the 2015 statement as having said that it is the Commission's view that - as a matter of law - Section 5 does not permit anything else to be enforced other than the Sherman Act and the Clayton Act.

I read it at least largely as saying, in light of case law developments and the developments in the Sherman Act and Clayton Act context, we are going to read Section 5 to adopt a similar analytic approach, which is anti-competitive effects weighed against pro-competitive justifications. That's how we'll proceed on Section 5, basically the rule of reason.

I had not understood the 2015 statement as saying we can never enforce anything that isn't itself a Sherman Act and a Clayton Act violation. I do think that there's a decent argument, that careful reasonableness balancing is part of Section 5, even when we aren't doing a Sherman Act or a Clayton Act violation. In other words, I do think that reasonableness probably governs the approach in Section 5 even if it prescribes things other than the Clayton Act.

I had not seen the 2015 statement as saying exactly how it was described in the 2022 statement, which is the 2022 statement said we can't enforce anything other than the Sherman and Clayton Act. I don't think that's what it's saying. I think what it's saying is, basically, it's a matter of our discretion. Because of concerns about what all it might cover, we're going to limit it to rule of reasonableness analysis.

That's certainly where I feel personally most comfortable enforcing Section 5. I am open to the possibility that Section 5 proscribes things other than what the rule of reasonableness would generally proscribe. But, at least in how I am exercising my own enforcement discretion, I do care what, as the case is called, the spirit of the antitrust laws have to say in order to make sure that the FTC isn't just sort of gallivanting across the land searching for monsters to destroy without trying to tie that sort of to the text.

I think that was part of the problem with the non-compete rule is we were so far removed from the way that we traditionally did Section 5 analysis. We basically bore no resemblance to anything we've done in the past.

Alden: Okay. Great, great. Now, moving from unfair methods to unfair actual practices, unfair and deceptive practices. Now, the FTC has teed up nearly 10 potential rulemakings in that area. You already have discussed rulemaking. Is this also a question about resource allocation? There's some people who know the FTC who say, look, the FTC doesn't have the resources to seriously consider doing 10 major consumer protection rules.

There's some who would argue that, instead, there should be more focus on sort of bread and butter things like internet fraud or other traditional consumer protection enforcement cases as opposed to broad rulemaking. Where do you fall in that one, on that spectrum?

Commissioner Ferguson: Yes. I'll just, it's similar to what I said in my dissent. I think administrative rulemaking generally sits uncomfortably in our democracy because-- I don't know about you. I like the idea - I take some comfort from the idea - that people who are going to make the rules that govern how I live my life, if they make rules I don't like, I can go to the ballot box, and I can vote them out. I can contribute money to people who are proposing different policies.

I am a technocrat that works inside of the beltway. I am insulated from the electorate by design. Frankly, Congress has tried to insulate us even from the president, who is the only member of the executive branch who isn't insulated from the public. I generally think that the executive branch does its best work when it is enforcing the laws and does its worst work when it's trying to make law through rulemaking.

Now, Congress, unlike in the competition context, Congress has undoubtedly given us rulemaking authority in this area. I agree with you that, as a general matter, I think our resources are better spent going after fraudsters and pursuing other unfair and deceptive acts or practices rather than issuing rulemakings. That is largely tied to my sort of view about the proper allocation of power in government.

I think rules of conduct that control what private citizens do should be done primarily by Congress because, when they get them wrong, we can do something about it. It is so much harder to do something about administrative lawmaking because, if we issue a bad rule, Congress can disclaim it and say, oh, well, that's them. They shouldn't have done that, but you need to complain to them. The public can't really do anything about it.

They can complain to the bureaucrats, but we're largely insulated from those complaints. I think it's better when we are out there enforcing the laws that Congress has passed in enforcement actions, which the Commission is so good at doing. Our CPB staff are world-class law enforcers, talented litigators, great investigators.

I think that, when we are sort of unleashing them to go after fraudsters and other folks engaged in deceptive and unfair acts and practices, the Commission is doing its best work. I think we're at our weakest when we're trying to come up with broad rules of primary conduct.

Alden: Okay. Now to a statutory interpretation or amendment question. Now, the Supreme Court held, and my name was on the brief in that case, I won't say anything about it, nine to nothing in 2021 that the FTC does not have the authority to pursue monetary relief for consumers under its injunctive authority, Section 13(b) of the FTC Act as you know. Now, obviously, I know you can't lobby for legislation or so on, but there's been a lot of discussion by present and current commissioners about not opposing or seeing benefits to legislation to give the FTC monetary relief authority specific language. If so, would you think such legislation hypothetically should limit the types of claims eligible for relief? For example, only getting relief for cases of hardcore deception or cases where you can really measure the amount of harm to consumers.

Commissioner Ferguson: Good question. Without taking a position on any particular legislation, for the reasons that you just identified, I do think that Congress should restore to the Commission power that resembles the power we thought we had under Section 13(b). I don't want to call it a 13(b) power since the court unanimously concluded we never had it. I think that the Commission used the power we thought we had to do a lot of good for American consumers.

I also think that it was a sort of an important deterrence mechanism in the marketplace, and so I think Congress should restore it. I know that there's a debate in Congress, as there always is, about the details about legislation that would restore that authority. I'm not going to take a position other than to say, I would rather get as much of that authority back as we can.

If we end up thinking we need more, we can go back, and that I think it is better for all of us that the Congress agree to something. If it doesn't work, we'll go back and ask for more. I hope we won't let the perfect be the enemy of the good. In terms of whether that authority should be constrained, I don't think so only for the following reason.

If Congress has concern about the-- so I don't think our authority to pursue monetary relief should be linked to the substance of the cause of action the way that you described. If Congress has concerns about cases where it's difficult to measure harms, I think it should just go ahead and write something about the remedy into the law rather than just precluding us from getting relief at all.

If there are certain types of cases we're demonstrating the monetary amount, like the quantum of injury is difficult, then Congress should just impose an enhanced burden on us in order to get at the monetary relief. I don't think that the difficulty of it should just be a bar to getting into the courthouse door at all. If Congress wants to set particular rules for particular types of cases before we get monetary relief, that's fine.

I think that the general rule should be, the Commission can pursue monetary relief. If Congress would say, in certain cases, you need additional showing in order to get that monetary relief, that's fine. I think it's important that they unlock the courthouse doors to the Commission because I think the Commission had been using that power to do a lot of good for Americans.

Alden: Great. Now, going to administrative adjudication. Now, the FTC currently has three administrative law judges. I believe that number's right. Their authorities have been curved by the chair. Tied to that, there's a broader question, particularly in the competition space, is should administrative adjudication of antitrust complaints continue to play an important role at the FTC? Or should it attempt to proceed directly in federal court, as of course, the Justice Department has to do?

There's some who would argue that somehow there's a rule of law type issue that why would some defendants have to go through administrative litigation, whereas, if a case were brought DOJ, they wouldn't.

Commissioner Ferguson: Yes. A couple of things. Even when the Commission adjudicates claims to Part III, the judiciary is not excluded. Part III adjudications are subject to judicial review, and the courts have struck down Part III adjudicative decisions that the Commission has issued in the past. The merger context, just as a matter of fact, the judiciary participates on the front end in basically all of our merger enforcement decisions because the Commission in its Part III proceedings can't prevent a party from closing or consummating the transaction while the Part III process is proceeding.

We end up going to federal court to get a preliminary injunction anyway, so the courts are involved. My own view is I have constitutional and due process concerns about administrative adjudications generally. I haven't made up my mind about any of this, obviously, nor could I lawfully since I sit as a judge in the Part III, or basically as an appellate judge in the Part III process. I think Justice Thomas' concurrence on the lawfulness of agency adjudications involving private rights is pretty persuasive.

He at least raises, I think, some real concerns. I think that the commission maximizes its credibility when it's getting the judicial imprimatur on its enforcement decisions. I just personally draw a fair amount of comfort when the courts take our side because I think that the way the law enforcement works in most contexts is the executive makes an accusation, has to demonstrate the truth of that accusation in front of an impartial arbiter in the judiciary.

If the impartial arbiter agrees, then the government power can be levied against the individual. That process plays out in court, and that's where I'm most comfortable. In terms of do I think there's a rule of law problem from the fact that some parties get to go directly to federal court if the DOJ is doing the enforcing, and for us, they go to Part III, I think the answer is probably no.

That dichotomy doesn't trouble me apart from the concerns I have generally about Part III for two reasons. One, at least in our emergent enforcement cases, we almost always go to court anyway, so this ends up playing out pretty similarly because we need a preliminary injunction to stop the transaction from consummating in most cases.

Second, Congress set it up this way. It's not like we're just exercising discretion or it's a weird sort of evolution. Congress set it up this way, and Congress surveyed the economy and our political structure and said, no, this is how we want it. At least, for a long time, the due process constraints were generally understood to require that a statute had been adopted depriving the person of life, liberty, or property, and that that was the due process of law.

Here, Congress said, look, we want the FTC to do this in Part III, and we want DOJ to do it in federal court. That choice doesn't particularly bother me. Although, again, I think Justice Thomas raises some very legitimate concerns about adjudicating private rights inside of agencies.

Alden: Okay. Well, 13(b), there's some people who were troubled that said DOJ, that certainly in injunctive actions going after mergers, the language is different than the injunctive language applying to the Justice Department. Do you think that, ideally, should be harmonized?

Commissioner Ferguson: By that, you mean the Justice Department has to survive the Winter test, Winter against NRSC?

Alden: Yes. No, I mean, just the language of Section 13(b) regarding the test for obtaining an injunction is different than the language for the DOJ in a merger case obtaining an injunction.

Commissioner Ferguson: Yes, so I guess I'm not an expert on this, but I would say that although the courts generally go out of their way to say that the standard for 13(b) is meaningfully different than the winter versus NRC standard, the government's preliminary injunctions for the rest of the government, it ends up looking pretty similar, primarily because both the Department and the FTC have to show some likelihood of success in the merits.

I know it's described a little differently in the 13(b) context. But that prong, which ends up being where most of the work is done is quite similar. Then under 13(b), as in under Winter, there's a weighing of public interest, which is not terribly dissimilar. I hadn't thought about this before, Alden. That's a good question.

The difference between the two gives me some concern, but on the ground, at least, I think it ends up looking very often quite similar when it's 13(b). I will say, though, the Supreme Court is considering right now the Starbucks against NLRB decision that is addressing not dissimilar preliminary injunction language in the National Labor Relations Act. Whatever they say in that could have some significance for our own statute. We'll see what they think.

Alden: Very interesting and all fascinating. I see, of our clock, we've got just a couple of minutes left, but really just a quick question. As you know, there are a number of procedural changes regarding the speeding-up of Magnuson-Moss rulemaking, other procedural changes advocated by the current chair. Are any of those internal procedural changes drawing some controversy? Do you have any thoughts about whether ideally they should be revisited or not?

Commissioner Ferguson: I'm going to limit myself to the change in speed of Magnuson-Moss rulemaking. I don't think I favor speeding up rulemaking. Executive branch rulemaking already has the very serious problem that technocrats are sort of making these decisions divorced from public opinion. The sort of like comment or the hearing process for Magnuson-Moss is really the only way that we have any opportunity to understand what the public thinks about this.

I think the more public input and the more time for public input, the better. The more time the agency spends meaningfully considering public input and meaningfully considering the scope of its own authority, the better. I get the urge to try to make this faster. I don't think that that's consistent with sort of good, deliberate decision-making. Given what I think are the constitutional, at least, difficulties with agencies making rules of primary conduct, I don't think we should make it any easier ourselves. I think those obstacles are good for us and good for the whole country.

Alden: Okay. Regrettably, we seem to have hit the witching hour. Any last comments you want to make?

Commissioner Ferguson: No, except to say I really appreciate you hosting this. I'm a big fan of yours. I read most of what you put out. Your blog posts, I find my way to more often than not. You're doing great work, and I hope you keep doing it. I enjoy reading it.

Alden: Thank you very much for the plug. I appreciate it.

Commissioner Ferguson: You're welcome.

Alden: Thank you to the audience. This will be recorded. We look forward to people's reactions. Thank you so much, Commissioner.

Commissioner Ferguson: Thank you. Take care.