On June 29, 2026, the U.S. Supreme Court issued its opinion in Trump v. Slaughter, where the six-Justice majority held that appointed agency officials who wield executive power are subject to presidential removal. In so holding, the Court overruled its 1935 decision in Humphrey’s Executor v. United States, 295 U.S. 602 (1935), which for nearly a century stood for the principle that Congress can create independent agencies whose leaders can only be removed for cause.
Going forward, businesses should expect that regulatory inquiries, actions, and policies will be more closely aligned with presidential priorities. Below is a summary of the decision and the anticipated impact it will have on businesses.
Summary of Decision
At the beginning of his second term in January 2025, President Donald Trump appointed a new FTC Chair and, per custom, former Chair Lina Khan resigned from her seat. With this change, the FTC was evenly split politically among four Commissioners—two Democrats and two Republicans. In March 2025, President Trump removed the two Democratic Commissioners, Rebecca Slaughter and Alvaro Bedoya, noting that their continued service was “inconsistent” with his administration’s priorities.
The FTC Act states that Commissioners appointed to the FTC may be removed by the President “for inefficiency, neglect of duty, or malfeasance in office” (15 U.S.C. § 41). In the 1930s, this provision was challenged. President Franklin D. Roosevelt removed William E. Humphrey as Chairman of the FTC, arguing that, under the Constitution, the President must be permitted to remove executive officers at will. In 1935, in the Humphrey’s Executor case, the Court rejected the President’s argument. The Court held that FTC Commissioners did not exercise executive powers and that therefore, Congress could limit the President’s ability to remove them. Citing Humphrey’s Executor, Commissioners Slaughter and Bedoya sued the administration to challenge their firing. (Commissioner Bedoya subsequently withdrew from the litigation.)
The case reached the Court, which held that the removal protections in the FTC Act are contrary to the separation of powers enshrined in the Constitution and that the President has the exclusive authority to remove executive branch agency officials at will. In so holding, the Court overturned Humphrey’s Executor.
Impact on Businesses
In some ways, this change enhances short-term predictability for businesses. It will be clear that the priorities of administrative agencies will follow those of an elected president. When a President announces a deregulatory agenda—as this administration has done with artificial intelligence (AI)—agencies like the FTC can be expected to align with that agenda rather than chart their own course.
On the other hand, the decision undermines long-term predictability and continuity. Previously, companies could count on the fact that it would be challenging for an independent agency to radically and swiftly upend regulations and policies with changes in administrations. Companies may now forgo long-term investments due to regulatory uncertainty.
The decision also has implications for companies considering FTC settlements. First, while companies may have more incentives to delay matters or negotiate shorter settlements, the FTC will have even greater incentive to fast-track investigations and settlements. In addition to having strong incentives to move things quickly before the end of an administration, matters may proceed on a faster track because existing and future Commissioners will not have to take the time to deliberate and seek compromise with five sitting Commissioners of different parties.
Second, for companies thinking of entering into settlements with the Commission, the durations may become shorter, and companies may have arguments that the settlements should only last as long as the current administration. In the past, FTC administrative orders typically lasted 20 years. FTC Chairman Andrew Ferguson has indicated that he is not in favor of such long orders and has approved orders with 10-year terms and less. This may coincide with companies’ desires for shorter settlements.
Third, to the extent settlements have longer durations, companies will have a greater incentive to seek to reopen orders from prior Commissions. Chairman Ferguson himself moved to reopen a consent order from a prior administration on which he had previously dissented. Rytr was an AI writing tool that generated various scripts for users. The company offered a review-writing product, and the FTC in the prior administration held that Rytr violated Section 5 of the FTC Act by engaging in unfair practices and providing the means and instrumentalities for others to write fake reviews. Chairman Ferguson dissented from the original order, and under his chairmanship, the current Commission vacated it.
For companies that handle data of EU citizens, this decision could also impact data transfers between the U.S. and EU. See our separate client alert on this topic.
All of this said, the vast majority of FTC activities have traditionally enjoyed bipartisan support and consensus. Prior Democratic and Republican administrations have largely agreed on areas like subscription marketing, children’s privacy, minor safety, data security, and deceptive conduct generally. These areas are less likely to see big shifts. Other areas have been more polarizing, AI regulation, concerns about political bias, and gender-affirming care, to name a few, will likely ebb and flow in terms of regulatory attention. While the more polarizing areas will certainly swing back and forth, the key consumer protection, privacy, and antitrust concerns will likely perennially be in the FTC’s crosshairs. Continued compliance and implementation of policy and political strategies with the FTC will be important.
Wilson Sonsini Goodrich & Rosati routinely helps clients navigate complex regulatory landscapes and helps respond to FTC investigations. For more information, please contact Maureen Ohlhausen, Maneesha Mithal, Rebecca Weitzel Garcia, or any other member of the firm’s Data, Privacy, and Cybersecurity or Antitrust and Competition practices.
