Federal Trade Commission
The FTC embodies the paradox of American regulatory capacity: immense statutory authority that oscillates between aggressive enforcement and strategic paralysis depending on leadership. Created in 1914 to 'bust the trusts,' it gained consumer protection powers only in 1938, creating a dual mandate that generates internal conflict.
Under aggressive leadership (Lina Khan 2021-2025), the FTC attempted unprecedented Section 5 expansion; under passive leadership, it retreats to case-by-case enforcement. This pattern creates perpetual institutional whiplash.
The FTC's dual mandate creates structural contradiction: Bureau of Competition must view consumer protection as potentially anticompetitive (licensing standards that hurt competition), while Bureau of Consumer Protection must view pro-competitive outcomes as potentially harmful (aggressive pricing driving quality down). This tension is unresolved by statute. Also: 75% of top FTC officials have corporate conflicts; all 9 Bureau of Competition directors since 1990s have tech sector revolving door conflicts.
Key Facts
Power Dynamics
Authority over mergers (Hart-Scott-Rodino), unfair competition (Sherman Act), consumer protection (Wheeler-Lea), rulemaking
Depends entirely on leadership philosophy. Khan aggressively challenged mergers, expanded Section 5; Ferguson signaled retreat. Same statutory text produces opposite enforcement. Merger litigation track record ~21% success rate (far below 50%)—companies rationally litigate rather than settle
- Courts (every major action litigated; non-compete ban invalidated Aug 2024)
- Congress (OMB cuts budget requests)
- Post-Chevron 'major questions doctrine'
- ~60% departing staff go to BigLaw or merger-driven corporations
- SEC and DOJ coordination unclear in emerging areas
- State AGs now launching parallel enforcement
Revenue Structure
Federal Trade Commission Revenue Sources
- Hart-Scott-Rodino filing fees 45% ↻
- Congressional appropriations 55%
$280K-$2.25M per deal; CBO estimates $1.4B over 5 years
FY 2025: $425.7M; requested $590M (cut)
HSR fees cyclical—when M&A drops, revenue drops but fixed costs don't. Agency requested $70M for 300+ staffers in FY 2024; appropriation cut instead
Unlike SEC (self-funding), FTC vulnerable to appropriations cuts when enforcing against Congress-friendly industries
Decision Dynamics at Federal Trade Commission
Non-compete rule: 18 months proposal to final (Jan 2023-Apr 2024); court invalidated in 4 months
Microsoft-Activision: 2+ years investigation, FTC abandoned after unfavorable court signals
Federal courts primary bottleneck. FTC lost all merger litigations in 2023 except mixed Illumina/GRAIL result
Failure Modes of Federal Trade Commission
- 1914-1938 consumer gap: courts interpreted Section 5 narrowly for 24 years
- 1980-2000 non-enforcement: 4-7 merger challenges/year, missed Google-DoubleClick, Facebook-Instagram
- 2023-2024 litigation defeats: highest challenge rate in 20 years but lost almost every case
- Political cycling flips priorities every 4-8 years
- 21% litigation success rate
- 75% officials have corporate conflicts
- Underfunded: $425M for $30T economy
If passive chair appointed, enforcement halts for 4-8 years while major consolidation occurs (as 1980-2000). By time aggressive administration returns, companies have integrated, harms irreversible
Biological Parallel
FTC demonstrates immunological logic: exists to detect and eliminate 'pathogens' (monopolistic mergers, deceptive practices). But activation/suppression depends on political faction—like sympathetic (Khan: aggressive, vigilant) vs parasympathetic (Ferguson: passive, resource-conserving) nervous system. Revolving door means immune system trained by organisms it's supposed to attack—classic autoimmune dysfunction.
Key Agencies
Merger review, antitrust enforcement
False advertising, deceptive practices, privacy