The Federal Trade Commission After Trump v. Slaughter

In the days following the Supreme Court’s decision in Trump v. Slaughter, the Federal Trade Commission (FTC) released an AI Policy Statement that may prove significant for reasons extending well beyond artificial intelligence (AI). Among other things, the commission asserted that Section 5 of the Federal Trade Commission Act could preempt certain state AI laws, even while acknowledging that the FTC Act contains no express preemption provision. The statement also closely tracks the Trump administration’s broader AI agenda, including its AI Action Plan and executive order on “Preventing Woke AI in the Federal Government,” both of which seek to establish a more centralized federal approach to AI governance.

Much of the commentary surrounding Slaughter, including this Lawfare piece by Nick Bednar, has understandably focused on the Supreme Court’s expansion of presidential removal authority and the demise of Humphrey’s Executor. That debate, while important, risks overlooking what Slaughter means for the constitutional identity of the FTC itself. The decision is not simply about whether the president may remove commissioners at will. It also reshapes the institutional incentives of one of the federal government’s principal consumer protection regulators at precisely the moment when Congress has largely ceded the field of AI governance through legislative inaction, leaving federal agencies and the states to fill the resulting governance vacuum.

The FTC’s AI Policy Statement is significant because the current commission appears willing to advance broader presidential priorities through expansive interpretations of its statutory authority. Whether that shift ultimately reflects a lasting institutional transformation or merely the current administration’s view of the FTC’s powers remains to be seen. Nevertheless, the policy statement offers an early indication of how Trump v. Slaughter may reshape the FTC’s constitutional identity.

Trump v. Slaughter alters the constitutional footing of the FTC in ways that are likely to reshape the future of AI governance, consumer protection, and federal-state relations. The commission’s recent assertion of implied preemption over state AI laws should therefore be understood as one of the first visible manifestations of a broader institutional transformation. As future administrations test the outer boundaries of presidential control over independent agencies, the most consequential legacy of Slaughter may not be presidential removal powers. Instead, it may be what agencies like the FTC believe they are empowered to do. 

Congress Designed the FTC to Be Different

The Federal Trade Commission was never intended to function like a traditional executive department. When Congress created the commission in 1914, it deliberately rejected a model of direct presidential supervision in favor of an expert, multimember body capable of developing specialized knowledge, promoting stable enforcement, and fostering public confidence in the nation’s complex markets. The FTC reflected Progressive Era concerns that rapidly industrializing national markets required regulators with technical expertise and continuity beyond the electoral cycle. Rather than concentrating authority in a single executive officer, Congress vested the commission’s powers in five commissioners serving staggered terms, limited the number of commissioners from any one political party, and expected the agency to exercise independent judgment.

This institutional design served several complementary purposes. First, multimember commissions encouraged deliberation and reduced the likelihood that enforcement policy would shift dramatically with each presidential administration. Bipartisan membership was intended to expose regulatory decisions to competing viewpoints while limiting overt partisan capture. Fixed terms provided continuity that allowed commissioners to pursue long-term regulatory priorities without constant concern over changes in presidential administrations. Together, these structural features sought to promote consistency in the administration of federal consumer protection and competition law. This is an especially important objective for businesses operating across national markets and consumers who depended on predictable enforcement of federal law.

Equally important, Congress believed that effective regulation required expertise. The FTC was expected not merely to prosecute violations of law but also to study markets, investigate emerging commercial practices, gather economic evidence, and develop specialized knowledge unavailable elsewhere in the federal government. As James Landis later observed in “The Administrative Process,” independent commissions were designed to combine expert judgment with political accountability in a manner distinct from purely executive agencies. Their legitimacy derived not only from statutory authority but also from the expectation that technical expertise, deliberative decision-making, and institutional continuity would produce more informed and stable regulatory outcomes.

The commission’s independence, however, was never absolute. Congress retained substantial oversight authority, courts remained available to review agency action, and the president continued to influence the commission through appointments and the designation of its chair. As Peter Strauss has argued, independent agencies occupy a distinct place within the constitutional structure. They remain part of the executive branch while exercising a measure of decisional independence that Congress considered necessary. The FTC therefore represented a conscious compromise that allowed the commission to still be held democratically accountable, but to diffuse political influence to better protect consumers and preserve confidence in its integrity.

For nearly 90 years, the Supreme Court’s decision in Humphrey’s Executor v. United States supplied the constitutional foundation for that institutional design. By upholding statutory limits on the president’s ability to remove commissioners except for cause, the Court recognized that Congress could create certain independent federal agencies whose effectiveness depended on a measure of freedom from immediate presidential direction. Whatever one thinks of Humphrey’s Executor, the decision reflected an understanding that the FTC’s structure was not a historical accident. Trump v. Slaughter calls that constitutional settlement into question, not simply by altering who may remove commissioners, but by reshaping the institutional assumptions on which the commission has operated for over a century.

Trump v. Slaughter Does More Than Change Removal

The Supreme Court has gradually moved in this direction for more than a decade. In Free Enterprise Fund v. Public Company Accounting Oversight Board, the Court emphasized that Article II generally requires the president to maintain sufficient control over those who exercise executive power. While the Court invalidated the dual for-cause removal protections afforded to members of the Public Company Accounting Oversight Board, it nevertheless preserved the broader constitutional framework governing independent agencies—expressly distinguishing the FTC’s structure. While the Court invalidated the dual layers of for-cause removal protection applicable to members of the Public Company Accounting Oversight Board, it took pains to distinguish the FTC and expressly declined to reconsider Humphrey’s Executor

A decade later, in Seila Law LLC v. Consumer Financial Protection Bureau, the Court invalidated for-cause removal protections for the director of the Consumer Financial Protection Bureau but again characterized multimember commissions such as the FTC as falling within the historical exception recognized in Humphrey’s Executor. Likewise, in Collins v. Yellen, the Court held unconstitutional removal restrictions protecting the director of the Federal Housing Finance Agency while declining to disturb the constitutional status of traditional multimember independent commissions.

Trump v. Slaughter represents the culmination of this doctrinal evolution. By overruling Humphrey’s Executor, the Court removed the principal constitutional foundation that had long distinguished the commission from executive departments. Commissioners now serve with the understanding that they remain in office only so long as they retain the president’s confidence. The quality or integrity of any individual commissioner’s decision-making is beside the point. Although the FTC retains many of the structural characteristics Congress gave it in 1914, it now operates within a constitutional framework that encourages closer alignment with presidential priorities than at any point since its creation.

The idea that constitutional structure shapes institutions, not only through formal legal rules, but by altering expectations and relationships among government actors is hardly a novel insight. Justice Elena Kagan, then Professor Kagan, famously argued that modern governance has increasingly become a system of “presidential administration,” where presidents influence agency policymaking, not only through appointments but also through centralized supervision, coordination, and political leadership. Presidents influence agency priorities by appointing commissioners, selecting the chair, coordinating policy through the White House, and exercising substantial influence over the executive branch’s regulatory agenda. What Slaughter changes is the possibility of immediate presidential removal, which fundamentally strengthens the leverage available to the White House in shaping agency behavior.

Commissioners have long sought to faithfully execute the laws entrusted to them. But government institutions respond to constitutional design. Commissioners deciding whether to initiate enforcement actions, promulgate rules, interpret ambiguous statutory provisions, authorize litigation positions, or assert federal authority over emerging technologies now do so knowing a president can remove them at will.

That is particularly significant because the FTC exercises broad discretionary authority. Consumer protection law frequently requires the commission to interpret open-ended statutory concepts such as “unfair” and “deceptive” practices, determine enforcement priorities among competing policy objectives, and articulate the federal government’s position on emerging commercial practices. As presidential control increases, the commission may understand those discretionary judgments as part of implementing White House priorities rather than exercising the independent expert judgment that Congress originally envisioned when it created the agency.

This transformation is unlikely to occur through dramatic public announcements or explicit declarations of loyalty to the president. Instead, the subtleties of the FTC’s post-Slaughter evolution will likely emerge incrementally through enforcement priorities, statutory interpretations, litigation positions, and assertions of federal authority aligned with the White House. One only needs to look at the FTC’s recent approach to AI as an early opportunity to observe this institutional evolution in practice.

The FTC Navigating Uncharted Territory With a Novel Technology

The institutional consequences of Trump v. Slaughter are likely to be most significant in areas where Congress has enacted broad statutory standards but has not detailed regulatory frameworks. Artificial intelligence is perhaps the clearest example. Despite extensive public debate, Congress has yet to enact a comprehensive federal statute governing AI. In that legislative vacuum, existing agencies have become the federal government’s primary AI regulators.

The FTC’s central role stems from Section 5 of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce.” Unlike highly prescriptive regulatory statutes, Section 5 delegates substantial discretion to the commission to determine what constitutes unfairness or deception. The FTC has long exercised that authority to address novel technologies as they emerge, developing consumer protection principles incrementally through enforcement actions, policy statements, and administrative guidance.

Artificial intelligence magnifies that discretion. AI systems raise questions that frequently cannot be resolved by straightforward statutory interpretation alone. When should an AI company’s representations about accuracy, reliability, or safety become actionable deception? When do design choices that increase foreseeable risks to consumers constitute unfair practices? What disclosures adequately inform consumers about automated decision-making? How should regulators evaluate AI systems that continually evolve after deployment? These questions require judgments about technology, economics, consumer expectations, and public policy that Congress has yet to address.

The commission has already demonstrated its role in regulating AI and tech companies. In the previously published, since deleted, FTC blog post “Keep Your AI Claims in Check,” the agency flagged that some AI advertising could be exaggerating what products can do. In another since deleted guidance, “Aiming for Truth, Fairness, and Equity in Your Company’s Use of AI,” the FTC has warned companies that traditional consumer protection principles apply fully to AI systems. The commission has likewise pursued enforcement actions involving allegedly deceptive AI claims, issued a report on commercial surveillance, and issued rules on negative options.

The breadth of this authority reflects both the strengths and limitations of Section 5. Its flexible standards allow the commission to respond rapidly to technological change without waiting for Congress to enact highly specific legislation. The commission must continually interpret open-ended statutory concepts against technologies Congress never specifically contemplated.

Trump v. Slaughter therefore arrives at a uniquely consequential moment. As the commission confronts AI-related questions that Congress has not answered, the institutional consequences of greater presidential control are significant. Artificial intelligence has become one of the administration’s highest policy priorities reflected in its flurry of AI executive orders and the appointment of senior advisers with long-standing ties to the technology industry. At the same time, many of the nation’s largest technology companies and their executives have become increasingly active participants in national politics. Those relationships make the perceived independence of the FTC even more important and begs the question, will one of the nation’s principal AI regulators command the public’s confidence as experts exercising independent judgment, or will the FTC increasingly be viewed as an instrument for advancing presidential AI policy?

The FTC’s New Theory of Preemption

The Federal Trade Commission’s recently proposed AI Policy Statement offers one of the first concrete illustrations of how the commission’s institutional posture may be changing after Trump v. Slaughter. At first glance, the document appears to be another agency policy statement explaining how Section 5 of the FTC Act applies to artificial intelligence. Read more carefully, however, it advances a considerably broader conception of the commission’s authority. Most notably, the FTC suggests that Section 5 may preempt certain state AI laws, despite acknowledging that “the FTC Act does not expressly preempt state law.” That assertion reflects an important shift in how the commission appears to understand its own institutional role.

Historically, the FTC has operated alongside, not in place of, state consumer protection regimes. State attorneys general routinely enforce state unfair and deceptive acts and practices statutes while coordinating with federal regulators. Congress itself has repeatedly preserved this complementary framework. Section 19(e) of the FTC Act provides that federal remedies are “in addition to, and not in lieu of, any other remedy or right of action provided by State or Federal law.” Likewise, the commission has historically recognized that its own rules generally do not displace more protective state consumer protection laws. For example, the FTC’s Business Opportunity Rule expressly provides that the commission “does not intend to preempt the business opportunity sales practices laws of any state” except in the event of a direct conflict and further recognizes that state laws affording “equal or greater protection” remain fully operative. These provisions reflect a long-standing understanding that federal consumer protection law ordinarily establishes a floor rather than an exclusive regulatory regime.

The AI Policy Statement signals a departure from that historical posture. Although acknowledging that Congress did not expressly preempt state AI regulation, the commission nevertheless suggests that Section 5 may impliedly displace certain state AI laws when those laws interfere with the federal consumer protection framework. Whether that interpretation ultimately persuades the courts is an important question. Yet the commission appears willing to advance an interpretation of its authority that would significantly reshape the traditional relationship between federal and state consumer protection law.

That is no small claim. Preemption doctrine has long rested on the principle that Congress determines when federal law displaces state police powers. Because regulation of health, safety, consumer protection, and fraud has historically fallen within the states’ traditional police powers, courts ordinarily begin with a presumption against preemption unless Congress has clearly indicated otherwise. In Rice v. Santa Fe Elevator Corp., the Supreme Court explained that Congress’s intent to preempt state law must be “clear and manifest” where legislation touches fields traditionally occupied by the states. More recently, in Medtronic, Inc. v. Lohr, the Court reiterated that federal statutes should not lightly be read to displace complementary state consumer protections absent clear congressional direction. And in Wyeth v. Levine, the Court emphasized that “agencies have no special authority to pronounce on pre-emption absent delegation by Congress.” These cases underscore the broader constitutional principle that decisions about the allocation of regulatory authority between the federal government and the states ordinarily originate with Congress. The commission’s policy statement therefore represents an expansive reading of Section 5.

When viewed in isolation, the memorandum might simply represent an aggressive litigation position. But one must consider the broader context of the administration’s AI agenda. The policy statement closely parallels the administration’s AI Action Plan, which calls for a more unified national approach to artificial intelligence. It also parallels the posture found in Executive Order 14303, “Preventing Woke AI in the Federal Government,” which seeks to shape how AI systems operate within the federal government. More broadly, administration officials have repeatedly criticized the proliferation of state AI legislation and argued that a patchwork of state requirements threatens innovation and national competitiveness. The FTC’s memorandum advances this same objective this time, through a previously independent commission.

Trump v. Slaughter changes the constitutional environment in which these kinds of assertions occur. When commissioners know they ultimately serve at the pleasure of the president, greater alignment between agency interpretations and presidential policy priorities becomes more likely as this new constitutional structure encourages coordination rather than independence. The AI Policy Statement’s significance is the FTC’s evolving conception of itself. It suggests an agency willing to view itself as establishing a nationally uniform regulatory framework for AI by not only enforcing federal law but also determining when state law must be superseded.

The Future FTC

The constitutional structure the Court has created will remain in place long after this memorandum is revised, withdrawn, or superseded. Every future president, regardless of political party, will inherit a Federal Trade Commission that operates under a fundamentally different set of constitutional assumptions than existed for nearly a century. The institutional consequences of that change are likely to shape the commission’s approach to consumer regulation for years to come.

Artificial intelligence illustrates the challenge because Congress has largely delegated its governance to agencies applying broad, preexisting statutes. Yet AI is unlikely to be the only area in which these dynamics emerge. As new technologies continue to outpace legislation, future commissions will confront increasingly novel questions involving biometric surveillance, autonomous systems, algorithmic decision-making, digital markets, commercial surveillance, neurotechnology, and technologies not yet imagined. In each instance, the FTC will be asked to determine how far Section 5 extends and what constitutes an unfair or deceptive practice in commercial settings that Congress never specifically contemplated.

Those judgments will inevitably require substantial policymaking discretion. As Slaughter strengthens presidential influence over the commission, future FTCs may become more willing to interpret Section 5 expansively, align enforcement priorities with broader presidential initiatives, advance nationally uniform approaches to technology regulation, and test the boundaries of federal authority in areas where Congress has spoken only in general terms. They may also increasingly assert positions that reshape the relationship between federal and state regulation, particularly where the White House views divergent state approaches as obstacles to White House priorities—especially national economic priorities.

None of this suggests that future commissioners will abandon their professional obligations. Rather, the incentives created by Slaughter encourage closer alignment between the commission and presidential policy priorities. The cumulative effect may be subtle at first. Over time, however, those incremental choices may collectively reshape expectations about what the FTC’s role is within the executive branch.

At the outer bounds, a progressive FTC might pursue an expansive consumer protection agenda while preempting state laws it views as insufficiently protective. Conversely, a conservative FTC could increasingly align with industry preferences, declining enforcement or broadly invoking preemption where it sees fit. Although these outcomes remain contingent on future administrations and judicial developments, Slaughter makes them materially more plausible.

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The debate over Trump v. Slaughter should not end with the scope of presidential removal power. It should instead turn to the institutions that must now discharge their statutory responsibilities within a constitutional framework that has been fundamentally reconfigured. If the FTC’s AI Policy Statement is an early indication of what lies ahead, then the most enduring legacy of Slaughter will be the gradual transformation of one of the federal government’s foremost expert commissions into an institution whose independence is measured against presidential priorities. As AI and other emerging technologies become defining questions of 21st century governance, that transformation challenges whether the United States still intends to govern its most consequential technologies through independent expert judgment, or whether those decisions will increasingly rise and fall with the priorities of each successive administration. The answer may shape not only the future of the administrative state but also the character of American democracy in the age of AI.