In the waning days of the Biden Administration, when most agencies traditionally slow down in anticipation of the looming transition to the next Administration, the Lina Kahn–led Federal Trade Commission (FTC) instead went into overdrive. In a wide range of areas, including junk fees and deceptive marketing claims, data privacy and security, and even antitrust guidelines and cases against name-brand American businesses, the FTC voted on more than 30 policy initiatives, fresh lawsuits, and other matters in the Administration’s final days.
To the surprise of few, the Republican minority raised a very vocal opposition to the feverish activity led by the soon-to-be-departing Democratic majority. The two Republican commissioners even abstained from and issued written dissents to holding the final FTC meeting chaired by Khan on January 16. During his first week as President Trump’s newly minted FTC chair, Andrew Ferguson announced that the incoming Republican majority “will end the previous administration’s assault on the American way of life, and we will usher in a new Golden Age for American businesses, workers, and consumers.”
Although the FTC’s final actions provide examples of the enforcement priorities seen throughout the Khan FTC, notably some actions garnered bipartisan support, whereas others received fierce opposition.
Junk Fees
As followers of the Khan FTC know, “junk fees” were a popular target of the Biden Administration’s ire, culminating in the FTC’s recently issued final rule on junk fees in the live ticketing and hotel space, which we have previously covered here. The final actions by the outgoing Khan FTC provided additional examples, with two actions announced during the Administration’s final weeks. On December 27, 2024, the FTC, joined by the Maryland attorney general, filed a complaint in federal court against the Lindsay Automotive Group, alleging that the defendants regularly advertised deceptive prices before adding thousands of dollars in additional fees, falsely claimed that purchased vehicles must be financed through the dealership, and systematically charged consumers for additional products they did not consent to or represented such products as mandatory. The FTC authorized this action by a 5–0 vote, including the support of Ferguson and the other Republican commissioner, Melissa Holyoak.
Following in the footsteps of the Lindsay Automotive action, the FTC referred its case against online cash advance firm Dave Inc. to the U.S. Department of Justice (DOJ), which in turn filed an amended complaint to seek civil penalties. The Dave case, which was originally filed by the FTC in November 2024, alleges that the company used misleading marketing and charged consumers undisclosed fees. Both the FTC’s original suit (which did not seek civil penalties) and the referral to the DOJ were approved by the commission, with Ferguson voting yes and Holyoak voting no (but not issuing a written dissent) in the 4–1 commission vote.
Deception Claims
Enforcement actions related to deceptive claims have also been a popular staple of the Khan FTC and were well represented in the Biden Administration’s final weeks. These actions included allegations that software provider accessiBe had misrepresented the abilities of its artificial intelligence (AI) accessibility tool, that gig economy company Handy Technologies had misrepresented how much money workers could earn on the platform, and that health treatment company Evoke Wellness had used search ads and telemarketing to impersonate other treatment providers. Each of these actions were unanimously supported by the FTC on 5–0 votes with the support of both Republican commissioners. This is unsurprising – consumer deception cases have long been a hallmark of the FTC, regardless of which political party is in power.
In a related move that did draw Ferguson’s and Holyoak’s scrutiny, during the last week of the Biden Administration, the Khan FTC proposed changes to the existing Business Opportunity Rule and proposed a new Earnings Claim Rule that would allow the FTC to obtain civil penalties and money back for harmed consumers. In a written dissent, Ferguson, joined by Holyoak, blasted the proposals, on the basis that “the time for the Biden-Harris FTC to issue or propose new rules ended the morning after the presidential election.”
Data Security and Privacy
The Khan FTC’s final actions also included a number of actions on data security and privacy issues. Importantly, The FTC finalized long-awaited changes to the Children’s Online Privacy Protection Rule (COPPA Rule), which expanded protections for children’s data and provides parents with new tools to control what data about their children is provided to third parties. The final rule, which Ferguson noted in his concurring statement was the culmination of lengthy bipartisan efforts, was approved by the FTC on a 5–0 vote. We review that rule here. The finalization of the COPPA Rule was also quickly followed by one final COPPA enforcement action, with the game developer of Genshin Impact agreeing to pay a $20 million fine and a prohibition on selling “lootboxes” to children under the age of 16. This action was similarly approved by the FTC on a 5-0 vote, with Ferguson concurring in part and dissenting in part.
On January 15, the FTC, following a 5–0 vote, proposed a settlement with GoDaddy over alleged lax data security practices and misleading statements to consumers. This action has been covered in more detail by our colleagues here. Importantly, the GoDaddy proposed settlement demonstrates the FTC’s increasing focus on incorporating prescriptive cybersecurity requirements, including phishing-resistant multi-factor authentication, in its consent orders. Additionally, on January 16, the FTC proposed a settlement with General Motors, alleging that the company and its OnStar affiliate improperly collected, used, and sold drivers’ geolocation and driving behavior data without adequately notifying or obtaining consent from consumers. This action was approved by the FTC on a day in which both Ferguson and Holyoak dissented from a regular closed FTC meeting to discuss enforcement actions, and both were recorded as absent in a rare 3–0–2 vote. It should be noted that Ferguson and Holyoak voted in support of a host of location privacy cases in 2024.
Antitrust Actions
A number of antitrust cases also came in the Khan-chaired commission’s waning days that are of note. First, although Republican commissioners had previously condemned the FTC’s now-judicially-enjoined ban on noncompete agreements as unauthorized, they joined Democrats in issuing an order to halt a building services contractor from enforcing no-hire agreements in early January. And they also did not oppose an enforcement action regarding a fine against two oil companies for allegedly violating “gun jumping” rules pertaining to pre-merger waiting periods, or to the issuance of a staff report critical of prescription benefit managers, with Ferguson issuing a statement saying additional work in the area remains to be done.
On January 15, Deere & Company was sued by the FTC and the states of Minnesota and Illinois for alleged unfair competition and monopolization under a right to repair theory. The FTC filed this case following a 3–2 vote along party lines, following an investigation. The case was brought in the Northern District of Illinois, where an existing multidistrict litigation consolidating complaints from class action plaintiffs is pending. Ferguson’s dissenting statement, joined by Holyoak, focused on procedural and timeliness grounds but also included a noteworthy statement about potential resolution of the case:
The parties are in active negotiations over a fix that, if brought to fruition, could provide meaningful relief to America’s farmers. I favor settling this litigation but only if that settlement provides real, tangible benefits to America’s farmers. If the Commission and Deere cannot reach such a settlement, then the courts will resolve the right to repair question here. Securing real relief for farmers in short order should be the Commission’s focus, rather than launching potentially years-long litigation in order to secure another triumphant press release on the Democrats’ way out the door.
Khan, in reply to this criticism from the Republican commissioners, stated that “I am disappointed that Commissioner Ferguson and Commissioner Holyoak would vote against this law enforcement action on political grounds, wishing instead to delay the relief that farmers are owed.”
In the final business days before the inauguration of President Trump, the Democratic majority voted on three additional material antitrust matters. First, the FTC, along with the DOJ, revised the nine-year-old antitrust guidelines concerning labor activities that had been embraced by the FTC under both political parties. The new guidelines proclaim broad classes of noncompete and nonsolicit agreements and information exchanges may violate the antitrust or other laws. The Republican commissioners said it made no sense for “the lame-duck Biden-Harris FTC” to “replace existing guidance mere days before they hand over the baton,” calling it a “senseless waste of Commissioner resources” since the “Biden-Harris FTC has no future.” In reply, Democratic Commissioner Alvaro Bedoya stated that “[w]e are not on vacation. The American people expect their government to keep working for them even in periods of transition.”
Second, the commission unanimously settled an enforcement action it had brought concerning the acquisition of multiple anesthesia practices, with the Republican commissioners issuing a concurring statement that sought to dispel the majority’s concerns about the importance of the accused entity being a private equity fund and questioned the relevance of the entity’s purported “roll up” strategy as opposed to analysis of specific transactions.
Lastly, the Democratic majority’s decision to bring its second case in as many months under a long-dormant federal price discrimination law drew the loudest opposition from the Republican minority. They accused the majority of rushing a case that was not ready to be filed, and for which they did not have enough evidence to support the claims, for political motivations. In the most recent case, Pepsi is alleged to have provided one of its largest customers with key financial benefits the FTC labeled as promotional allowances that it did not provide to other customers, disadvantaging them. The FTC alleges that Pepsi’s unfair treatment of its customers has led to inflated prices and denied the less-favored customers the opportunity to fairly compete. Holyoak strongly criticized the complaint’s merits, saying it was “wholly deficient” and “like [sending] a lamb to the slaughter” in court. Ferguson lamented that although he continued to believe that the relevant law should be enforced when supporting evidence can be found, he said the Pepsi case was launched on “little more than a hunch.”
Expectations for the Trump Transition
As Ferguson takes over the chair role previously occupied by Khan, we can expect to see a marked difference in the rulemaking activities championed by the outgoing Democratic majority.
As noted above, it was the broad sweeping rulemakings, as opposed to the enforcement actions themselves, that drew the fiercest opposition from Ferguson and Holyoak, who argued that the Khan FTC either did not have the authority to issue the rules they issued or failed to follow the FTC Act’s requirements that a rule define with specificity the acts and practices that are unfair or deceptive or that the acts or practices that are subject to the rule are prevalent. While we can still expect the FTC to bring enforcement actions, don’t expect to see the FTC continue to “color[] well outside the lines of the Commission’s authority” or use the agency’s limited litigation resources in the absence of significant evidentiary support as the Republicans have accused them of doing (such as the FTC’s consumer protection actions against Rytr LLC, Mobilewalla Inc., and Lyft Inc. or antitrust actions involving price discrimination).
As the FTC awaits the Senate confirmation of President Trump’s nominee for the third Republican commissioner, Mark Meador, we may not see commission decisions that reflect Ferguson’s priorities because now that Khan has departed (January 31), the commission is split, with two Republicans and two Democrats, until Meador is confirmed. Additionally, as indicated by the Republicans’ objections to the Khan-led FTC’s flurry of activity, the new Ferguson FTC is likely to be more methodical in its decision-making, taking a narrower view on what conduct actually violates the law.
A good example of Ferguson’s view on this subject can be found in his dissent from the FTC’s action against generative AI company Rytr LLC. In that dissent, Ferguson objected on the basis that the Khan FTC was “[t]reating as categorically illegal a generative AI tool merely because of the possibility that someone might use it for fraud.” Similarly, in the serial acquisition and price discrimination antitrust cases, he also indicated a willingness to develop evidence of violations of established antitrust law doctrine. Going forward, we should expect the Ferguson FTC to be much more hesitant to bring actions against innovators in developing technological areas such as AI without evidence that the technology at issue is inherently deceptive or has no legal use cases or antitrust cases unless there is significant evidence of competitive harm.
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