Federal Trade Commission Regulatory Overreach Should Be Trump Administration's Next Target

Yahoo

a day ago

President Donald J. Trump has a dynamic record of repealing government overregulation that has plagued the United States for decades. The first Trump Administration announced at the end of his initial term that they had eliminated eight regulations for every new one adopted, and reduced the direct cost of regulatory compliance by $50 billion.
More recently, in January 2025, the President issued an Executive Order requiring that whenever an agency promulgates a new rule, regulation, or guidance, it must also identify at least ten existing rules, regulations, or guidance documents to be repealed. These types of reforms have a beneficial impact for all Americans.
The focus on deregulation must now target the Federal Trade Commission (FTC). The FTC has long abandoned its historic mandate of not 'burdening legitimate business activity.' The FTC, while a cornerstone of consumer protection and fair competition in the United States, wrongheadedly relies on a one-size-fits-all policy that imposes a 20-year term for compliance obligations under its administrative consent decrees and court settlement orders that can and often do extend into perpetuity. This policy falls squarely into the category of overregulation that unnecessarily stifles competition, innovation, and economic growth.
FTC orders often result from settlements or enforcement actions that are theoretically designed to prevent companies from engaging in alleged unfair or deceptive practices. However, the current policy of indefinite or long-term orders arising from consent decrees does not accomplish that goal. The FTC must modernize its policy on consent decrees and court settlement orders, which will benefit U.S. consumers and businesses and will bring the Commission's policies more in line with the Trump Administration's pro-growth, pro-competition economic agenda.
Each consent order becomes its own judicially approved private law imposed on industry by the administrative agency that creates it. FTC consent orders become inflexible administrative and judicial rules, fixed in time and incapable of adaptation to changing circumstances. The business landscape is breathtakingly dynamic, with rapid technological advancements and evolving market conditions. Yet consent decrees are static and unresponsive to evolutionary mandates and conditions. Companies must often comply with draconian requirements untethered to their current markets, business practices and technologies. These requirements are often incompatible with consumers' evolving expectations in the applicable marketplace.
Consent orders from the past stand as artificial and displaced barriers that force companies to be hesitant to create and invest in new products, processes, or compliance techniques that may be of great benefit to consumers, the marketplace, and the economy. Developing a fairer and more responsive process – including one that allows for earlier termination (sunsetting) and easier modification of orders – is critical to protecting consumers and promoting competition while furthering legitimate business activity.
The administrative burden on companies subject to never-ending consent decrees harms the American economy while promoting inefficiency within the FTC and the federal courts. Indefinite orders require resource-intensive ongoing monitoring and enforcement by the FTC in derogation and waste of the intended purposes of the agency. By implementing shorter, more flexible sunset policies on all consent decrees, the FTC can reduce the administrative burden associated with long-term oversight. This would allow the agency to allocate its resources more efficiently, focusing on emerging issues and new cases rather than maintaining outdated orders.
The FTC policy that encourages long-term consent decrees is inconsistent with the practices of other agencies. No other agency has administrative or other orders that last as long as the FTC's. The CFPB, for example, sunsets its orders after 5 years. The Department of Justice routinely has even shorter Deferred Prosecution Agreements, typically in the 3-year range. The FTC should align their approach with other agencies to promote fairness and clear-headed approaches to compliance.
The goal of the FTC should be to advise businesses about anti-competitive conduct. John Villafranco and Andrea de Lorimier wrote for the Washington Legal Foundation on May 30, 2025, '20-year and indefinite order terms are simply not sensible or desirable. Specifically, long-term orders are (i) incongruous with the FTC's evolution, resulting in order terms that are not necessary to deter recidivism; (ii) inconsistent with, and far longer than, the order terms used by other federal agencies; (iii) unduly burdensome in today's competitive environment; and (iv) a hindrance to innovation.' They suggest a flexible approach that includes differing sunset terms depending on circumstances, a 5-year sunset or a 10-year sunset policy.
Indefinite FTC orders fall into the category of regulatory overreach – the very overreach that the Trump Administration attacked in the first term. A shorter, more flexible sunset would provide a balanced approach to regulation that fosters competition and protects consumers. It will mitigate the risk of overreach, while allowing the FTC to enhance its adaptability, encourage compliance and innovation, reduce administrative burden, and promote enhanced fairness and legal certainty in the U.S. economy. President Trump's legacy mandates reformation of the FTC as his next challenge.