Latest news with #FederalTradeCommissionAct
Mint
18-07-2025
- Business
- Mint
Does Trump have the authority to fire Fed chair Powell?
WASHINGTON—President Trump asked Republican lawmakers this week whether he should fire Federal Reserve Chair Jerome Powell, whom he appointed to the position in 2017. The move followed months of criticism by Trump of Powell, largely over his refusal to cut interest rates. Underneath the controversy lies a central question: Does Trump actually have the authority to fire Powell? The circumstances under which a president in fact can fire a Fed chair have never been crystal clear, experts say. But here are a few questions to consider if Trump takes his beef with Powell to the next level. As chair, Powell is one of seven members of the central bank's board of governors. Under a 1935 amendment to the Federal Reserve Act, those individuals can only be removed by the president 'for cause." That position was strengthened by a recent Supreme Court decision that boosted the president's authority to fire independent-agency officials without cause, but carved out an exemption for the Fed. More on that later. The chair serves a four-year term, while governors serve staggered 14-year terms—a structure designed to bolster the Fed's independence from political whims of the day. In Powell's case, his chairmanship ends in May of 2026, while his term as governor runs through January 2028. That means that even if Powell were demoted from his position as chair—a possibility the statute doesn't explicitly address—Trump wouldn't necessarily be rid of him. The Federal Reserve Act doesn't define it. But other laws governing independent agencies are a bit more specific and might provide courts guidance should Trump try to fire Powell 'for cause." The Federal Trade Commission Act says commissioners may be removed by the president for 'inefficiency, neglect of duty or malfeasance in office." Members of the National Labor Relations Board can similarly be removed by the president 'for neglect of duty or malfeasance in office, but for no other cause." That suggests Trump's displeasure with Powell, fundamentally a policy dispute over the appropriate level of interest rates, may be insufficient grounds for dismissal on its own. Trump said this week it was 'highly unlikely" that he would fire Powell 'unless he has to leave for fraud," suggesting the door was still open to a removal effort. Trump and his advisers have homed in on a renovation project of the Fed's office buildings in Washington that has been troubled by delays and cost overruns. Cost overruns are common in construction projects, and there have been no allegations of fraud levied at Powell. Russell Vought, Trump's budget director, implied in a letter this month that Powell either made false statements to Congress about the $2.5 billion renovation or failed to comply with permitting rules. He said last week Powell would face 'very, very tough questions" from Trump advisers serving on a capital-area planning commission. On July 17, Vought told reporters he is trying to arrange a tour of the project for himself, planning-commission members and senators. 'We're going to see where this takes us, but this is not something the American people should expect from their government," Vought said. Trump's second term has been marked by far-reaching efforts to consolidate presidential power and stretch its boundaries. One of the avenues he has pursued is a conservative legal idea known as the 'unitary executive theory." It argues that the president has sole authority over the executive branch, including independent agencies like the Fed, which Congress set up to operate more autonomously than cabinet agencies. The Supreme Court largely validated this theory in a lawsuit over Trump's removal of Gwynne Wilcox, a Democratic member of the National Labor Relations Board. But the conservative majority carved out an exception for Fed officials, making clear that its ruling doesn't 'necessarily implicate the constitutionality of for-cause removal protections" for them. No. Monetary-policy decisions are made by a committee of central bankers: the seven governors in Washington, plus five of 12 presidents of the Fed's regional reserve banks. Only one or two of the governors are currently seen as favoring lower interest rates immediately, and most have terms that continue through the end of his presidency. Fed officials unanimously voted to hold rates steady at their most recent policy meeting, in mid-June. That suggests a low appetite for slashing rates to 1% as Trump has demanded, from their current level of around 4.3%. In theory, if Trump succeeds in firing Powell, the rest of the committee may not go along with the interest-rate recommendations of whoever takes his place. But Trump could also try to fire other governors and even bank presidents to create a majority on the committee favorable to him. Trump is considering naming Powell's successor early, The Wall Street Journal has reported. If that person were to express a preference for lower rates, some administration officials hope financial markets would incorporate such guidance, thereby achieving Trump's goal of reducing borrowing costs. But Trump's outbursts over Powell and interest rates have generally had the opposite effect, sparking market volatility and occasional jumps in long-term borrowing costs. Many investors see an independent central bank as a key pillar for long-term economic stability. A recent survey of economists by the Journal found 57% expect Trump's stated preference for lower interest rates to have no effect on monetary policy under the next Fed chair. But 36% of the economists thought the president's views would cause rates to be lower. The last president to significantly interfere in Fed policy was Richard Nixon, who surreptitiously pressured then-Fed chair Arthur Burns to hold rates down ahead of his 1972 re-election campaign. That didn't go over well: Inflation spiraled out of control within a few presidents occasionally expressed a preference for lower interest rates or sought to influence the Fed through appointments. But none have confronted a Fed chair as directly, publicly or personally, as Trump has attacked Powell. This explanatory article may be updated periodically. Write to Paul Kiernan at
Associated Press
09-07-2025
- Business
- Associated Press
CCIA Applauds Eighth Circuit Decision to Vacate FTC's Negative Option Rule
Washington, DC July 08, 2025 --( )-- The Consumer Credit Industry Association (CCIA) applauds today's decision by the U.S. Court of Appeals for the Eighth Circuit to vacate the Federal Trade Commission's (FTC) Negative Option Rule in its entirety. The Eighth Circuit held that the FTC's failure to issue a required Preliminary Regulatory Analysis (PRA) before finalizing the Rule was a fatal procedural deficiency under Section 22 of the Federal Trade Commission Act. The Court emphasized that this omission was not harmless and resulted in real prejudice to regulated parties, depriving them of the opportunity to submit informed public comment and help shape the rule. 'Vacating the Rule is appropriate because of the prejudice suffered by Petitioners as a result of the procedural error,' the Court stated. In its opinion, the Court concluded that (FTCA Act) § 22 required the Commission to issue a preliminary regulatory analysis after the ALJ found the Rule would meet the $100 million economic impact threshold, even though the Commission initially estimated it would not. 'The ruling marks a major victory for CCIA members and the broader consumer financial protection industry,' said CCIA President & CEO, Sarah Ferman Baker. 'By vacating the rule, the Court upheld the principle that agencies must conduct rulemaking transparently and lawfully, particularly when regulations carry such significant economic implications.' CCIA has consistently opposed the Rule, both during its development and through legal proceedings. The association submitted an amicus brief to the Court urging the very result issued today and filed detailed comment letters with the FTC, while also encouraging Congress to consider a Congressional Review Act (CRA) resolution to overturn the Rule legislatively. The Court also cited the Fifth Circuit's 2025 decision vacating the FTC's CARS Rule for similar procedural failings, highlighting a broader judicial trend toward holding the Commission accountable for compliance with its statutory obligations. About CCIA For over 70 years, the Consumer Credit Industry Association (CCIA) has been the trusted advocate for consumer financial protection and security products, dedicated to enhancing consumer financial security by preserving the availability, value, and integrity of its members' products. CCIA promotes fair regulations that balance consumer protection with industry innovation to ensure financial products remain accessible and affordable for millions of Americans. Contact Information: Consumer Credit Industry Association John Euwema 630-824-7300 Contact via Email Read the full story here: CCIA Applauds Eighth Circuit Decision to Vacate FTC's Negative Option Rule Press Release Distributed by
Yahoo
23-05-2025
- Business
- Yahoo
Elon Musk's vendetta against Media Matters morphs into Trump administration investigation
Amid 'first buddy' Elon Musk's ongoing public war against Media Matters for America, the Federal Trade Commission has opened an investigation into the liberal media watchdog over what it says could be illegal collusion with advertisers. Essentially piggybacking on Musk's lawsuits against Media Matters over the group's research into hateful and antisemitic content on the mega-billionaire's social media platform X, the FTC sent a letter to the organization requiring it to share communications and documents related to its research, as well as copies of its budgets. 'This demand is issued pursuant to Section 20 of the Federal Trade Commission Act, 15 U.S.C. § 57b-1, in the course of an investigation to determine whether there is, has been, or may be a violation of any laws administered by the Federal Trade Commission by conduct, activities, or proposed action as described in Item 3,' the letter states. Media Matters president Angelo Carusone said the formal government probe was an escalation of President Donald Trump's efforts to punish his critics, which have resulted in executive orders against law firms, investigations into Democratic-aligned groups, and threats against media outlets. 'The Trump administration has been defined by naming right-wing media figures to key posts and abusing the power of the federal government to bully political opponents and silence critics,' Carusone said in a statement. 'It's clear that's exactly what's happening here, given Media Matters' history of holding those same figures to account. These threats won't work; we remain steadfast to our mission,' he added. The FTC declined to comment. Earlier this spring, the president dismissed the last two remaining Democrats on the FTC, calling into question the commission's independence. While the commission is supposed to be made up of five commissioners who serve seven-year terms, with no more than three from any political party, the FTC currently has just three members – all Republican. Musk, who served as a close adviser to Trump and has championed himself as a 'free speech absolutist,' sued Media Matters for defamation in 2023 and blamed it for an advertiser exodus from X over a 'harmful' report that showed pro-Nazi posts appearing next to blue-chip company ads. Since then, Musk launched another lawsuit against an industry group that represents a slew of global brands and advertisers, accusing it of conspiring to cut off X's advertising revenue. The world's richest man has also filed additional complaints against Media Matters across the world, while sympathetic GOP state attorneys have spun up their own Musk-related civil investigations into the liberal organization. A federal judge halted those probes last year, stating that they were being used 'to retaliate against a media organization for protected speech.' In March, Media Matters went on offense and sued X for breach of contract over the multiple lawsuits Musk has filed against the group, which includes complaints in Ireland and Singapore, claiming the tech mogul was engaging in 'a vendetta-driven campaign of libel tourism.' 'X's worldwide campaign of intimidation seeks to punish Media Matters for exercising its core First Amendment rights on a matter of public importance,' the lawsuit alleges. 'This Court should stop X's antics and enforce the forum selection clause that X itself drafted.' The Tesla CEO's vendetta against Media Matters has forced the non-profit group to make severe cutbacks amid the financial strain of the escalating court battles. The watchdog laid off roughly a dozen writers and researchers last year and has scaled back much of its work in recent months. Carusone has therefore spent much of the past year meeting with donors and allies while attempting to raise enough money to keep Media Matters afloat. Meanwhile, the Trump-led government seemingly doing the bidding of a close ally of the president's, who donated hundreds of millions of dollars to the GOP in the past year, has already prompted quite a bit of criticism. 'Of course, if the roles were reversed—if a Democratic administration were using the FTC to target a conservative media watchdog because George Soros didn't like its reporting—outlets like Fox News would never stop covering it,' Status founder Oliver Darcy wrote. 'There would be front-page stories, members of Congress would be pressured to hold hearings, and endless screeds about weaponizing government would saturate social media platforms like X.'
Yahoo
22-05-2025
- Business
- Yahoo
Trump's FTC Chair Is Continuing To Push Lina Khan's Antitrust Ideology
On February 26, new Federal Trade Commission (FTC) Chair Andrew Ferguson announced the creation of the Joint Labor Task Force, continuing former Chair Lina Khan's departure from what is known as the consumer welfare standard. Congress established the FTC in 1914 to prevent unfair competition and deceptive business practices. This has primarily meant "protecting Americans in their role as consumers," according to Ferguson. The FTC enforces the Clayton Antitrust Act, which outlawed price discrimination between customers, exclusive dealing, interlocking directorates, and mergers or acquisitions that "substantially reduce competition." But Khan was more interested in Americans' role as producers than consumers. In 2022 she signed a memorandum of understanding (MOU) with the National Labor Relations Board to "protect workers against unfair methods of competition, unfair or deceptive acts or practices, and unfair labor practices," such as restrictive contract provisions. In August 2023, Khan signed a similar MOU with the Department of Labor recognizing both agencies' shared commitment to protecting workers from deceptive earnings claims, restrictive noncompete and nondisclosure contracts, and the "impact of labor market concentration." Alden Abbott, the FTC's general counsel from 2018–2021, opposed the MOUs. Abbott argued in September 2023 that labor market oversight is "far-removed from the FTC's statutory mandate to focus on combating impediments to competition and consumer protection [and] would reduce the funding available to attack fraudulent and clearly anticompetitive acts." Khan's FTC went further, attempting to ban noncompete agreements in April 2024, describing them as an unfair method of competition in violation of the FTC Act. Ferguson dissented on legal grounds, arguing that the Commission does not possess the power "to declare categorically unlawful a species of contract that was lawful when the Federal Trade Commission Act was adopted." Though Ferguson opposed banning noncompetes, he still identifies them as one of 12 anticompetitive labor practices under FTC jurisdiction. Ferguson has directed his new Joint Labor Task Force to "prioritize investigation and prosecution" of such practices and to advocate regulatory and legislative changes that would address them. Ferguson's endorsement of the 2023 joint merger guidelines, along with his hostility to the tech industry and support for enforcing the anti–price discrimination Robinson-Patman Act, all suggest a continuation of Khan's activist antitrust ideology. The Joint Labor Task Force is yet more evidence. The post Trump's FTC Chair Is Continuing To Push Lina Khan's Antitrust Ideology appeared first on
Yahoo
21-05-2025
- Business
- Yahoo
The FTC's Probe Into 'Potentially Illegal' Content Moderation Is a Blatant Assault on the First Amendment
Today is the deadline for public comments regarding a "public inquiry" by the Federal Trade Commission (FTC) into the "potentially illegal" content moderation practices of social media platforms. As many of those comments note, that investigation impinges on the editorial discretion that the U.S. Supreme Court has repeatedly said is protected by the First Amendment. "Tech firms should not be bullying their users," FTC Chairman Andrew Ferguson said when the agency launched its probe in February. "This inquiry will help the FTC better understand how these firms may have violated the law by silencing and intimidating Americans for speaking their minds." Ferguson touts his investigation as a blow against "the tyranny of Big Tech" and "an important step forward in restoring free speech." His chief complaint is that "Big Tech censorship" discriminates against Republicans and conservatives. But even if that were true, there would be nothing inherently illegal about it. The FTC suggests that social media companies may be engaging in "unfair or deceptive acts or practices," which are prohibited by Section 5 of the Federal Trade Commission Act. To substantiate that claim, the agency asked for examples of deviations from platforms' "policies" or other "public-facing representations" concerning "how they would regulate, censor, or moderate users' conduct." It wanted to know whether the platforms had applied those rules faithfully and consistently, whether they had revised their standards, and whether they had notified users of those changes. If platforms fall short on any of those counts, the FTC implies, they are violating federal law. But that position contradicts both the agency's prior understanding of its statutory authority and the Supreme Court's understanding of the First Amendment. The FTC's authority under Section 5 "does not, and constitutionally cannot, extend to penalizing social media platforms for how they choose to moderate user content," Ashkhen Kazaryan, a senior legal fellow at the Future of Free Speech, argues in a comment that the organization submitted on Tuesday. "Platforms' content moderation policies, even if controversial or unevenly enforced, do not fall within the scope of deception or unfairness as defined by longstanding FTC precedent or constitutional doctrine. Content moderation practices, whether they involve the removal of misinformation, the enforcement of hate speech policies, or the decision to abstain from moderating content users don't want to see, do not constitute the type of economic or tangible harm the unfairness standard was designed to address. While such policies may be the subject of vigorous public debate, they do not justify FTC intervention." The FTC says "an act or practice is 'unfair' if it 'causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition'" (emphasis in the original). "In most cases," the FTC explains, "a substantial injury involves monetary harm, as when sellers coerce consumers into purchasing unwanted goods or services or when consumers buy defective goods or services on credit but are unable to assert against the creditor claims or defenses arising from the transaction. Unwarranted health and safety risks may also support a finding of unfairness." It is not obvious how that standard applies to, say, a Facebook user who complains that the platform erroneously or unfairly deemed one of his posts misleading. Nor does the FTC's long-established definition of "deception" easily fit the "Big Tech censorship" to which Ferguson objects. The FTC says "deception" requires "a representation, omission or practice that is likely to mislead the consumer." It mentions several examples of "practices that have been found misleading or deceptive," including "false oral or written representations, misleading price claims, sales of hazardous or systematically defective products or services without adequate disclosures, failure to disclose information regarding pyramid sales, use of bait and switch techniques, failure to perform promised services, and failure to meet warranty obligations." To justify FTC action, consumers must reasonably rely on a deceptive representation, omission, or practice, which must be "material," meaning it is "likely to affect the consumer's conduct or decision with regard to a product or service." In that situation, the FTC says, "consumer injury is likely, because consumers are likely to have chosen differently but for the deception." This definition also poses puzzles in the context of social media moderation. Suppose a YouTube user complains that the platform has arbitrarily imposed age restrictions on access to his videos. If he knew that was going to happen, he says, he would have "chosen differently," meaning he would have picked a competing video platform instead of investing time and effort in building his YouTube channel. Does that constitute the sort of "consumer injury" that the FTC Act was meant to address? It seems doubtful, especially since YouTube is free, so using it does not entail purchasing "a product or service." The complaints generated by the FTC's "request for public comment" illustrate the problems with trying to treat content moderation decisions as violations of Section 5. "In 2020," says one, "I was posting about [Donald] Trump, memes and such. Also about the vaccines and CoVid being a money grab. I was put in Facebook jail and put on restriction several times for 'misinformation.' I quit Facebook because of this. I miss seeing my family and friends' life adventures but I will not be silenced because of lies." Around the same time, another commenter reports, "I lost my Facebook AND Twitter accounts for supporting Donald Trump. I DID NOT [write] misleading, outrageous conspiracy-based posts, and didn't even post daily. I was just CANCELLED one day, with NO warnings or previous actions against me. My 79 year old mother, who has since passed, was treated the same." We can be reasonably confident that Facebook and Twitter would have explained these decisions based on rationales other than outrage at expressions of support for Donald Trump. Does the FTC really plan to adjudicate such disputes, choosing between contending versions of what happened and deciding whether it contradicted the platforms' avowed policies? Any attempt to police content moderation under this legal theory inevitably would interfere with decisions that the Supreme Court has said are constitutionally protected. Last July, the Court recognized that social media platforms, in deciding which speech to host and how to present it, are performing essentially the same function as newspapers that decide which articles to publish. "Traditional publishers and editors," Justice Elena Kagan wrote in the majority opinion, "select and shape other parties' expression into their own curated speech products," and "we have repeatedly held that laws curtailing their editorial choices must meet the First Amendment's requirements." That principle, Kagan said, "does not change because the curated compilation has gone from the physical to the virtual world. In the latter, as in the former, government efforts to alter an edited compilation of third-party expression are subject to judicial review for compliance with the First Amendment." That decision involved Florida and Texas laws that, like Ferguson's dubious assertion of regulatory authority, aimed to fight "Big Tech censorship" by restricting content moderation. "Texas does not like the way those platforms are selecting and moderating content, and wants them to create a different expressive product, communicating different values and priorities," Kagan observed. "But under the First Amendment, that is a preference Texas may not impose." Ferguson is attempting something similar by suggesting that social media platforms may be engaging in "unfair or deceptive" trade practices when they "deny or degrade" users' "access to services" based on "the content of users' speech." In practice, ensuring "fair" treatment of users means overriding editorial decisions that the FTC deems opaque, unreasonable, inconsistent, or discriminatory. Ferguson's avowed goal is to increase the diversity of opinions expressed on social media. Like Texas, he wants platforms to offer "a different expressive product" that better fits his personal preferences. "Holding platforms liable under Section 5 for content moderation policies would necessarily intrude upon their editorial judgment," Kazaryan notes. "The First Amendment not only protects the right to speak but also the right not to speak and to curate content. The Supreme Court has never held that editorial discretion must be evenly or flawlessly applied to qualify for constitutional protection." The FTC also suggests that content moderation practices "affect competition, may have resulted from a lack of competition, or may have been the product of anti-competitive conduct." But Kazaryan notes that platforms compete based on different approaches to moderation. "The existence of platforms such as Rumble, Mastodon, Substack, Truth Social, and Bluesky," he writes, "demonstrates that users have choices in moderation environments." Those environments also evolve over time based on business judgments or changes in ownership. "Under its previous leadership, Twitter developed strict rules against misinformation and hate speech," Kazaryan notes. "Following Elon Musk's acquisition, the platform reassessed those policies and relaxed many of them, allowing for broader latitude in political and ideological speech. Some saw this as irresponsible. Others viewed it as a welcome rebalancing in favor of free expression. Both views are valid. But neither justifies government intervention. The fact that a private entity revised its speech rules to reflect the views of new ownership is not a violation of law; it is a demonstration of First Amendment rights in action." Kazaryan also cites changes in moderation policies at Meta, which this year switched "from a top-down enforcement model to a new community fact-checking system that lets users add context to viral posts through crowd-sourced notes" on Facebook and Instagram. And he notes that YouTube has revised its "moderation policies on election and health information in light of shifting scientific consensus and public debate." None of those changes "are inherently deceptive, unfair, or anticompetitive," Kazaryan writes. "A platform's decision to use a top-down moderation system or a community notes model is a design choice and an editorial judgment that the Supreme Court recognizes as protected by the First Amendment." Kazaryan also questions the premise that social media are systematically biased against right-of-center views. "Conservative accounts, influencers, and news sources have reached massive audiences across all major social media platforms," he notes. "Data from the last several years shows how right-leaning voices have successfully promoted their perspectives online." Kazaryan backs up that assessment with several pieces of evidence. In the final quarter of 2019, for example, Breitbart's Facebook page "racked up more likes, comments, and shares" than The New York Times, The Washington Post, The Wall Street Journal, and USA Today combined. Kazaryan adds that President Donald Trump's "own social media presence remains unmatched; his accounts across platforms like X (formerly Twitter), Facebook, and Truth Social collectively boast nearly 170 million followers, significantly outpacing his political rivals." A 2020 Media Matters study, Kazaryan notes, "found that right-leaning pages garnered more total interactions than both left-leaning and non-aligned pages." A 2021 study published in the Proceedings of the National Academy of Sciences "revealed that Twitter's algorithmic amplification favored right-leaning news sources over left-leaning ones in six out of seven countries studied, including the United States." A 2024 Pew Research Center study of "news influencers" on Facebook, Instagram, TikTok, X, and YouTube found they were "more likely to identify with the political right than the left." Even if you don't find this evidence persuasive, there is a fundamental contradiction between Ferguson's basic beef about "Big Tech censorship"—that "these firms" are "silencing and intimidating Americans for speaking their minds"—and the main legal theory he is floating. Ferguson thinks social media platforms should treat all users equally, without regard to the opinions they express. But his argument that they are guilty of "unfair or deceptive" trade practices hinges on the premise that they are surreptitiously suppressing politically or ideologically disfavored content while claiming to be evenhanded. If they openly discriminated against conservatives, there would be no grounds for FTC intervention under Section 5 even based on Ferguson's improbably broad reading of that provision. The post The FTC's Probe Into 'Potentially Illegal' Content Moderation Is a Blatant Assault on the First Amendment appeared first on
