On December 10, 2024, President-elect Trump named FTC Commissioner Andrew Ferguson as next Chairman of the Federal Trade Commission (FTC), replacing Chair Lina Khan on January 20, 2025. As a Senate-approved sitting Commissioner, he will not need Senate approval to assume the role of Chairman. President-elect Trump also named Mark Meador as a Commissioner to fill the slot currently occupied by Chair Khan. Meador is a former staff member for Senator Mike Lee (R-UT). He has experience serving at the FTC, having spent five years at the beginning of his career working on antitrust cases at the agency.

Meador’s appointment to the FTC is subject to a couple of factors. First, it is typical for the existing FTC Chair whose party has lost the election to resign from the agency when the new President is sworn in. We expect Chair Khan to follow this traditional practice although it is possible that she may try to remain as a Commissioner after relinquishing her role as Chair, and until Meador is confirmed, so that the Democrats could continue to have a 3-2 majority. If she elects to stay as a Commissioner, President-elect Trump could terminate her. This could lead to litigation over the President’s authority to terminate FTC Commissioners. This scenario is unprecedented, and we think unlikely.

Meador’s nomination would be subject to Senate review and approval which may take a number of months. President-elect Trump has indicated he is interested in making recess appointments that would bypass the Senate review process, but this has generated significant controversy and we suspect it is unlikely that he would pursue this route in this instance.

Until Meador is approved as Commissioner (or another nominee if Meador does not obtain Senate approval), and assuming Chair Khan is no longer at the agency, the FTC will have a 2-2 split of Republicans and Democrats, which will limit the ability of Republicans to drive policy priorities forward (matters that result in a 2-2 vote cannot move forward). A 2-2 split does, however, allow Commissioner Ferguson as Chairman to close down a variety of proceedings unilaterally. He could, for example, close open investigations and could stop the agency’s work on open rulemaking proceedings. We suspect that he is very likely to exercise this authority liberally.

Commissioner Ferguson’s FTC as Chairman will be dramatically different than that of Chair Khan. We have reviewed his statements in consumer protection enforcement and policy matters to ascertain some anticipated themes of his consumer protection agenda. As reflected in the statements summarized in the section below (with key points italicized and bolded for each matter), five main themes emerge:

• The FTC should not aggressively interpret the law to overly regulate artificial intelligence (AI). But at the same time, to the extent AI companies make deceptive claims, they should be held accountable. (See assertions below in Rytr, Evolv, Sitejabber, Social Media 6(B) Report, IntelliVision, RivX, Sitejabber, Evolv, and NGL.)
• The FTC should not engage in novel or unreasonably aggressive interpretations of its legal authority in an attempt to achieve other, non-AI related, policy objectives. (See assertions below in Lyft, Coulter, Asbury Automotive, ICPEN statement, Social Media 6(B) Report, Arise, IXL Learning, Franchisors’ Policy Statement, Health Breach Notification Rule, Surveillance Pricing 6(B), Gravy Analytics, Mobilewalla, Telemarketing Sales Rule, Invitation Homes, Grubhub, and Unfair/Deceptive Fees Rule.)
• The FTC should and will continue to use its existing authority to pursue law violations, where the violations are based on reasonable and properly scoped interpretations of its legal authority. (See assertions below in GOAT, Career Step, and Evolv.)
• Platforms must avoid censorship and limitations on free speech (See assertions below in GOAT, NGL, Social Media 6(B) Report, and Fiscal Year 2025 Budget Statement.)
• The FTC should show appropriate deference to court proceedings/rulings (See assertions below in H&R Block, Lyft, Evolv, and Grubhub.)

Commissioner Ferguson’s Statements

In the Matter of Rytr, LLC: Rytr provided AI tools that allowed end users to generate a variety of messages and content. One tool allowed consumers to generate reviews of products and services. The FTC alleged that Rytr engaged in unfair practices and provided the means and instrumentalities to deceive consumers because businesses could use the tool to create false or deceptive consumer reviews. Commissioner Ferguson dissented from the case for three main reasons. First, he believes it reflects a “dramatic extension of means-and-instrumentalities liability.” Second, he notes that it reflects an overly aggressive approach to AI regulation that is not in the public interest (“And we certainly should not chill innovation by threatening to hold AI companies liable for whatever illegal use some clever fraudster might find for their technology”). Finally, he states that the action violates the First Amendment’s restrictions on the government’s authority to regulate speech: “the Commission today holds a company liable under Section 5 for a product that helps people speak, quite literally.”

FTC v. Evolv Technologies Holdings, Inc.: Evolv allegedly made false or unsupported claims regarding the efficacy of an AI-powered security screening tool used to detect weapons. In his concurrence, Commissioner Ferguson supports the complaint allegations as they involve traditional application of Section 5 authority. His statement cautions, however, against the FTC attempting to exercise its authority to obtain relief in federal court in a manner that runs afoul of the Supreme Court’s AMG Capital Management decision that restricted its authority.

In the Matter of Sitejabber: Sitejabber provided its e-commerce customers an AI-powered platform that allegedly allowed businesses to collect product reviews from end-user customers before they had the opportunity to use the products and then deceptively promoted them as authentic. In his concurrence, Commissioner Ferguson supports the case because, unlike Rytr, it involves an appropriately narrow application of the means and instrumentalities theory of liability.

United States v. Lyft: Lyft allegedly made deceptive claims regarding the money drivers could earn driving for Lyft. The FTC further alleged that these driver earnings claims had been declared unlawful previously and Lyft was on notice of that because the FTC sent it a “Notice of Penalty Offense” describing other earnings-related legal determinations. In his statement, Commissioner Ferguson takes issue with the FTC’s aggressive conclusion that Lyft’s conduct was determined to be unlawful in the Notice of Penalty Offense and asserts that the agency should not be relying on “dubious legal theories” to obtain civil penalties.

ICPEN Fall Conference: In remarks at the International Consumer Protection and Enforcement Network Fall Conference, Commissioner Ferguson cautions against “treat[ing] consumer-protection law as a panacea for social ills.” He remarks that “We must stay in our lane. Everyone is a consumer. But not every issue is a consumer-protection issue.” Commenting on the tendency of consumer protection authorities to address emotional or social issues, he states: “Even if we can get away with using consumer protection authority to address general issues of political and social significance, such conduct can do considerable harm and we should strive to avoid it.”

Social Media and Video Streaming Services 6(B) Report: In the FTC’s report on its industry study of privacy practices of social media companies, Commissioner Ferguson notes his support for protections for minors, stating “I … concur in much of the Report’s discussion of children and teens, although I believe the Report should have focused more on proposing legislative improvements to the online rights of parents and children rather than accusing companies of violating existing law under novel, dubious theories.” He dissented, however, from the Report’s statements regarding targeted advertising and AI: “the Report’s claim that consumers can be ‘profoundly threat[ened]’ and suffer ‘extreme harm[]’ by being shown a targeted advertisement … is unjustified, a gratuitous attack on the online economy made with the goal of justifying heavy-handed regulation.” He asserts “the same is true of the Report’s claims about AI. The Report criticizes the companies for using AI to show users content that ‘favors engagement.’ That is, the Report wishes that rather than accurately predicting what consumers want to see and showing it to them, companies would instead show consumers content that Washington bureaucrats would agree is higher ‘quality.’”

Surveillance Pricing 6(B) Study: Commissioner Ferguson supported the 6(B) information requests on surveillance pricing, noting that “one of the most important duties with which Congress has entrusted us is studying markets and industries and reporting to the public and Congress what we learn.” He contrasts that with “the incredible volume of rulemaking the majority has undertaken” and remarks that “many of these rules are unlawful…”

In the Matter of NGL Labs: NGL offered an anonymous messaging app that many minors used, and the FTC alleged that NGL violated Section 5 by sending fake messages to users to convince them to pay to see the identities of the senders. The proposed order prohibits NGL from offering its service to minors. Commissioner Ferguson supported issuance of the complaint but took the opportunity to state that, although NGL’s conduct was unlawful, “it does not follow that Section 5 categorically prohibits marketing any anonymous messaging app to teenagers.” He further states that “such a theory would be in serious tension with the recognized First Amendment rights of minors as well as Congressional policy on their use of internet services.”

Congressional Statement on the FTC Fiscal Year 2025 Budget: Commissioner Ferguson testified before the House Energy and Commerce Committee and flagged in his statement one specific objective for the agency: “Antitrust and consumer-protection laws are … one of our last available avenues to address the many challenges posed by Big Tech. For example, I agree with my friend Commissioner Holyoak that the Commission should examine whether social-media platforms were knowingly violating their terms of services when they deplatformed customers in 2020.”

In the Matter of Arise Virtual Solutions: The FTC alleged that Arise made deceptive “up to” earnings claims to consumers seeking customer-service jobs. Commissioner Ferguson concurred with the settlement but flagged concerns about how the agency has addressed substantiation for “up to” claims in the past. He notes that although the order requires Arise to substantiate that future “up to” claims are “typical for consumers similarly situated to those to whom the Claim is made,” he “withhold[s] judgment on what Section 5 requires for substantiation of “up to” advertising claims—a question on which the Commission appears to have articulated at least three inconsistent standards.”

In re Gravy Analytics, Inc. & In re Mobilewalla, Inc.: The FTC alleged that Gravy Analytics and Mobilewalla sold sensitive consumer location data without consent and unfairly categorized consumers based on sensitive characteristics. In addition, the FTC alleged that Mobilewalla unfairly retained consumer location information indefinitely. While supporting the claim that the Company sold sensitive location data without consent, Commissioner Ferguson did not support the counts related to categorizing consumers based on sensitive characteristics and indefinitely retaining consumer location information. He states that the FTC Act “does not limit how someone who lawfully acquired those data might choose to analyze those data,” nor does it “form[] the basis of standards for data retention.” He notes that “[m]y colleagues want the FTC Act to be a comprehensive privacy law. But it is not.”

In the Matter of IntelliVision Technologies Corp.: IntelliVision sells facial recognition software used in home security and home touch panels. The FTC alleged, among other things, that the company misrepresented that its software is free of gender and racial bias. Commissioner Ferguson wrote separately in support of this count, explaining his view that since the company did not invoke a specific definition of bias, it “must therefore bear the burden of substantiating all reasonable interpretations that consumers may have given its claim.”

FTC v. GOAT: GOAT’s online marketplace sells shoes, clothing, and accessories, and it offers consumers “Buyer Protection” for deficient products. The FTC alleged that it did not honor this policy. Because the case involved an online platform, Commissioner Ferguson took the opportunity to emphasize a free speech concern. Specifically, he calls for the FTC to use Section 5 to “enforce the antitrust laws against any platforms found to be unlawfully limiting Americans’ ability to exchange ideas freely and openly…[and] prosecute unlawful collusion… which threaten competition among those platforms.”

Telemarketing Sales Rule: The FTC approved final amendments to the Telemarketing Sales Rule (TSR), which extends coverage to inbound telemarketing calls to technical support services. Commissioner Ferguson dissented from the TSR rulemaking. He explains that he did so “not because it is bad policy, but because the time for rulemaking by the Biden-Harris FTC is over.”

In the Matter of H&R Block: The FTC alleged that the online tax filing service designed its products to make it difficult to downgrade, deleted all information of consumers who downgraded, and deceptively marketed a free version of its product that would apply to few customers. In his separate statement, Commissioner Ferguson noted that the U.S. Court of Appeals for the Fifth Circuit was simultaneously reviewing a similar claim and considering the constitutionality of the FTC’s Administrative Law Judge (ALJ) structure. He states that “[m]ultilevel tenure protections for FTC ALJs unconstitutionally interfere with [the President’s removal] power.” He would have reviewed the Fifth Circuit’s decision before weighing in on the lawfulness of the FTC decision and order concerning H&R Block.

In the Matter of Invitation Homes: Invitation Homes rents single-family homes, and the FTC alleged, among other things, that it made several deceptive statements regarding pricing and home inspections, and it dissuaded residents from invoking the protections of the Centers for Disease Control and Prevention’s [COVID-19-related] eviction moratorium. Commissioner Ferguson’s partial dissent states that the complaint goes too far in imposing liability for failure to comply with what he deems “the flagrantly unlawful [CDC] eviction moratorium.” He calls this out as an “all-too-familiar move” of “build[ing] a body of settlements incorporating… aggressive theory” that seeks to “shield” the theory from scrutiny in court.

In the Matter of RivX Automation: RivX Automation offered business opportunities in the trucking industry in exchange for consumer investment. The FTC alleged, in part, that RivX deceptively guaranteed income and asked consumers to sign agreements with non-disparagement clauses in violation of the Consumer Review Fairness Act (CRFA). Commissioner Ferguson concurred and wrote separately to support the non-disparagement claim in light of explicit, supporting statutory authority. Since “Congress in the CRFA expressly and unequivocally prohibited the sort of non-disparagement clauses that RivX included in its form contracts…this complaint is a lawful exercise of the authority conferred on us by Congress.”

Shanahan v. IXL Learning, Inc.: Students and parents brought suit against IXL, an educational technology company, for allegedly collecting the personal data of users in violation of state and federal laws. The FTC filed an amicus curiae brief in which it asserts that the Children’s Online Privacy Protection Act (COPPA) created an ed-tech specific agency relationship between the parents and school districts. Commissioner Ferguson wrote separately to say that, contrary to prior FTC guidance, he “see[s] nothing in COPPA’s text that limits parents’ statutory right to notice and consent when their children are online at school, nor anything suggesting the creation of a federal-law agency relationship between parents and anyone else.”

Coulter Motor Company and Gregory Depaola v. FTC and State of Arizona: The FTC and State of Arizona alleged Coulter deceptively advertised car prices, charged unwanted add-on fees, and discriminated against Latino consumers. The FTC brought these claims under Section 5, including the discrimination claim, which was also the subject of a separate claim under the Equal Credit Opportunity Act (ECOA). Commissioner Ferguson partially dissented from the Section 5 discrimination claim, reasoning that Section 5 is not an antidiscrimination law and “[t]here is simply no need for us to twist Section 5 in knots.”

In the Matter of Asbury Automotive Group, Inc.: Asbury Automotive Group allegedly made misrepresentations regarding hidden fees and discriminated against Black and Latino consumers in violation of the Equal Credit Opportunity Act (ECOA). Commissioner Ferguson wrote separately to address the discrimination claim and the distinction between this case and Coulter. He states that by alleging a discrimination claim under the ECOA but not a disparate treatment claim under Section 5, the FTC intentionally avoids judicial review of a novel Section 5 theory. He asserts that the novel Section 5 approach embraced in Coulter occurred only because the parties agreed to settle, and Asbury will be litigated in court. He comments that “[t]he majority has developed a penchant for pressing aggressive and novel theories in complaints it knows will not be litigated and relying on those unadjudicated complaints as a form of precedent for subsequent Commission action.”

In the Matter of Career Step, LLC: Career Step allegedly deceptively advertised employment outcomes, job placements, and employer partnerships that were specifically targeted to servicemembers and their families. Commissioner Ferguson concurred in this case and wrote separately to emphasize the importance of protecting servicemembers. He stated, “[a]s long as I am Commissioner, I will make sure that the FTC prioritizes this issue.”

Policy Statement of the FTC on Franchisors’ Use of Contract Provisions: The FTC released a policy statement that asserted that certain non-disparagement clauses were unfair under Section 5. Commissioner Ferguson dissented stating, “[t]his goes too far and is an attempt to announce de facto rules through an ostensibly nonbinding Policy Statement, bypassing the procedural safeguards that govern our rulemakings and denying regulated parties the benefit of ex ante judicial review.”

Health Breach Notification Rule: The FTC announced its final Health Breach Notification Rule (HBNR), which revised key definitions to cover health apps, expanded the content and use of electronic notification to consumers, and more. Commissioner Ferguson dissented arguing that the rule “exceeds the bounds Congress clearly established.” According to the statement, the revised definitions are not “consistent with the statute” when analyzed under canons of statutory interpretation.

Unfair or Deceptive Fees Rule: The FTC released its final Junk Fees Rule, which requires businesses to disclose the total price, inclusive of fees, when offering live-event tickets or short-term lodging. Commissioner Ferguson dissented, arguing similar to the Telemarketing Sales Rule, that “the time for rulemaking by the Biden-Harris FTC is over.” He notes that his vote does not reflect his position on the Final Rule’s merits and the Final Rule is a “significant improvement” over the version proposed last year.

FTC and People of the State of Illinois v. Grubhub: The FTC and Illinois Attorney General brought an action against Grubhub for, among other things, deceptively creating listings for restaurants without receiving the restaurants’ consent. The FTC alleges that these deceptive acts violated the unfair act or practice provision and unfair-method-of-competition provision of Section 5. Commissioner Ferguson dissented from the unfair-method-of-competition count stating, “[the Complaint] does not allege any facts supporting a plausible inference that Grubhub’s deception affected competitive conditions in the alleged market for prepared meal delivery.” He also describes this count and the majority’s unfair-method-of-competition test to be “a poorly pleaded effort to get the majority’s 2022 policy statement into a federal court complaint…that will not be litigated and therefore will not get any judicial review.”

Wilson Sonsini Goodrich & Rosati routinely helps companies navigate complex privacy and data security issues. For more information or advice concerning FTC regulatory matters or compliance issues, please contact Chris Olsen, Maneesha Mithal, Tracy Shapiro, Libby Weingarten, or any member of the firm’s data, privacy, and cybersecurity practice.