TCB at the FTC, Interview with Commissioner Andrew Ferguson | TRIGGERED Ep.239
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Guys, joining me now, FTC, Federal Trade Commission, Commissioner Andrew Ferguson.
Andrew, welcome.
How are you?
I'm well.
Thanks, Don.
Glad to be here.
So, Commissioner, thank you for taking the time.
Could you start?
By giving us perhaps a big-picture view of the role of the FTC and why you really chose to get involved and take this role?
Sure.
Thanks again for having me.
So the FTC is more than 100 years old, and we've got two mandates.
We enforce the antitrust laws, and we enforce the consumer protection laws.
So the antitrust laws, you read about in the newspaper all the time.
That's like mergers, price-fixing cartels, things like that.
But one of our missions that goes under the radar a lot is our consumer protection.
And that's like scams, frauds.
It's a lot of your interactions with businesses online, like the rules governing signing up for subscriptions.
Customer service, things like that.
It's one of the most valuable things that the agency does.
It gets a little less sort of press attention.
It's super important for the country, especially our work on protecting the elderly and veterans from scams.
Yeah, super important, but not quite as newsworthy or clickbaity as taking all the oligarchs, right?
That's right.
Yeah, exactly.
So what are the top priorities right now for the Trump-Vance Federal Trade Commission?
So we've got a couple.
The first is, you know, we want to protect Americans and American families from sort of like corporate power when it's exercised in ways that really affect how Americans live out their daily lives.
So, you know, part of that is, you know, Americans' interactions online with big tech, and that's definitely what gets the most news.
But it's a lot more than that.
You know, we have a real health care crisis in this country.
Health care is super expensive.
It can be very difficult to get.
And our markets are complicated, but the FTC has a very long history of protecting Americans in healthcare.
We have an unbelievably successful track record in policing hospital mergers to make sure that hospitals, especially in rural areas, don't merge in a way that can raise their prices.
And then the other thing the FTC under President Trump is really going to focus on is protecting workers.
So the antitrust laws protect workers.
They protect workers from things like...
You know, wage fixing arrangements.
They also protect them from other forms of collusion.
One of the forms of collusion that affects American workers that really concerns me are DEI metrics.
What you really don't want are businesses getting together behind closed doors and saying, hey, like, let's all agree.
That we're going to hire on the following DEI bases, and we're not going to depart from that.
That's a potential antitrust problem that the commission is going to look at very strongly and take very seriously.
That seems to be a major problem right now.
And again, whether it's done behind closed doors included on or everyone just agrees this is the way we're going to do it, because what we've seen, the bloom of that insanity for the last few years seems to be crushing, but also crushing for shareholder value.
If someone's hired simply because they check boxes and not based on any kind of capability or merit, that seems to be a real problem.
Totally agree.
And another area that this is taking place is so-called ESG, where you get businesses that are basically often publicly agreeing, hey, we're not going to invest in fossil fuels, and the reason we're going to give is that it's bad for the environment.
That's terrible for shareholder value.
I mean, like, you know, if these are profitable businesses producing stuff that Americans need to run our cars and our factories and our homes, and these businesses are just agreeing with each other that we're not going to invest in these things.
It's terrible for shareholders.
It's terrible for consumers.
It's terrible for workers.
This basically went unaddressed in the previous four years, except by some Republican states who started taking it very seriously.
We're looking at this right now.
It's really important to us.
So, you know, historically, what has the FTC sort of gotten right?
And where do you think perhaps they've gotten it wrong over the last few years?
I think that the FTC does its best work when it's acting like a cop, when it sees someone breaking the law and it goes to court, and it does its best or its worst work when it's a regulator.
And traditionally, the FTC, we've had rulemaking power for a long time, but the FTC has exercised it pretty sparingly.
And then in the last four years...
The FTC went on sort of a rulemaking bonanza, you know, with some rules estimated to cost half a trillion dollars.
And I think that when the FTC is sort of acting like Congress and making laws, that's when it's doing its worst work.
It does its best work when it's basically patrolling our markets.
And if it sees a business engaging in real dishonesty or anti-competitive behavior, it takes them to court.
The FTC does its best work when it understands that business is the engine that drives growth, innovation, and opportunity for all Americans.
And it sees this job as making sure business plays by the rules, but if it's playing by the rules, the FTC stays out of the mix and lets the markets do their thing.
And that wasn't the vibe of the last four years.
It really was not.
Yeah, so obviously as a business guy myself and someone who's run these things, you know, the regulatory framework is perhaps more important than even a tax framework or so many other things.
What are you guys actively doing to, again, minimize the draconian nature of some of those things?
I mean, you mentioned some of these programs cost half a trillion dollars.
I mean, that's a lot of money.
It's bigger than the market cap of the vast majority of companies in existence.
How do you change that direction and do it quickly so that that stuff isn't compounded and just made worse and or destroy?
The potential of a lot of great businesses before they can really get off the ground.
Yeah, it's a really good question.
So, I mean, to be honest, it starts at the top.
You need a president that is committed to this and is directing all the agencies to use their resources to deregulate.
Because if you don't, you'll just have sort of like a...
Islands of deregulation while the rest of the government continues sort of the regulatory impulse.
So it starts at the top.
The president has issued EO after EO directing agencies and the whole government to attack regulations.
The one that we're most focused on right now came out a couple weeks ago and it told the FTC to lead the whole government's charge on scouring the entire code of federal regulations.
For regulations that injure competition, that make it harder for businesses to compete, to grow, to make great products for Americans, to hire American workers, and to recommend back over to the White House, here are a bunch that you should delete, here are a bunch that you should change.
And we've begun that process.
It's a huge undertaking.
I mean, the Code of Federal Regulations is hundreds of thousands of pages.
It's tens and tens of thousands of gargantuan rules.
We've asked the public, tell us the rules that are preventing you from growing your business.
Tell us the rules that are preventing you from entering a market, from innovating, so that we can look at them and recommend them for deletion.
We are going to be issuing guidance to all the agency heads this week.
Tell us which ones you think are in your portfolio that are anti-competitive so we can recommend them for deletion.
And most importantly, we're doing this in like 90 days, which for federal government work is unprecedentedly fast.
But that's been the most important change that this administration has imposed from previous ones is deregulate and deregulate as quickly as you can.
And that's how you got to get it done, because every government only has a couple years to get this done before all the litigation hits, midterms, etc.
And the president has understood this, and that's why we're moving fast.
So, you know, obviously you can do a lot of that with executive order.
How do you codify some of these things into law so that, you know, the next administration, if it's a Democratic administration, can't just, with a stroke of a pen, put on all the regulations?
All their lobbyist buddies, all of the people in the swamp who've never created anything, who've never built anything, but sort of have peddled power and influence very effectively.
How do you make that a long-lasting end rather than simply a means for the meantime?
Yeah, so I think part of it is when you write...
So we've got the APA, right?
We've got the law that tells us how we're supposed to do regulations.
And then we've got decades of precedent built up on the APA that have added a bunch of layers of work for the agencies when they want to regulate, but also when they want to deregulate.
The way that a lot of courts have suggested the APA is written is that deregulating can take just as much work and time as writing the regulation.
I think the approach the administration is taking this time is...
Deregulate because we think that these rules are illegal, and let's just keep going.
Find them, delete them, move on.
And yeah, there'll be litigation, but I think that the Department of Justice is going to take very aggressive positions in promoting rescissions of regulations.
But that's how you do it.
It's not just changing enforcement priorities.
It's actually going into the code and being like, we're deleting it.
We're formally announcing this isn't a rule anymore under the APA.
And then if a subsequent administration wants to come back in and regulate again, they've got to write the rule all over again, and that takes a lot of work.
But that's the difference, is that in a lot of previous administrations, when you do deregulating, you'll delete a rule here or there, and then you'll issue a bunch of guidance that says, well, we're not going to enforce this rule this way, we're not going to enforce that rule that way.
No, because they can just flip that guidance January 21st as soon as the new administration comes in.
You've got to rip them out of the code, and that's what the president has been ordering the agencies to do, and that's what this process is.
What does that look like in practice?
Yeah, so it's two types of things.
The first are mergers.
And the mergers come to the agency because we've got a law that says if you want to merge, you have to basically present your merger to the agency.
And then you have to wait while the agency runs an assessment on whether the merger is lawful.
And I think that's going to be one of the biggest changes from the last administration.
We're already seeing it.
Look.
Congress has rules about which mergers are competitive and which are anti-competitive, and then tells the agencies, if you think they're anti-competitive, you have to go to court.
And that seems like a pretty reasonable system, but right underneath the surface of that, there's all sorts of things that the agencies, DOJ and FTC, can do that can slow mergers down.
And it happened a lot in the last four years, which is a merger comes in and just disappears in the agency.
And the agency sits on it for months and months and months.
And emerging parties are like, what's going on?
Like, what do you think the problems are?
We can work with you.
Like, if you think there are problems, tell us and we'll fix them.
And the agencies just sort of go dark.
And it seems, I've talked to a lot of CEOs about this.
A lot of people are saying, we started to get the impression that the goal was wait us out.
And dry up the mergers so that there wouldn't be any mergers because the last administration didn't like M&A at all.
Yeah, the process is the punishment, right?
Yeah, exactly.
No, it's exactly right.
And I think that this is a huge problem because M&A is part of how we innovate.
And I think we need to be very realistic that this is how it works.
Innovators don't normally have their own capital.
They've got great ideas, but they need access to markets and they need access to capital to build their ideas.
No one will invest in an idea if they think investing locks their investment forever and they can never get it back out.
And one of the ways investors get a return on their investment in innovation is that someone can come buy the company and take it to market, help it grow quickly.
And if you dry up M&A, if everyone thinks the regulators are just going to sort of stamp on M&A and make it really hard to do, who would invest?
Who would lock their money into some poor, innovative company that can't get bought out?
And I think we need to be really, really serious about recognizing M&A is part of how this country grows.
It's part of how we innovate.
It's part of how we avoid becoming Europe, which we don't want to do.
And the FTC's job needs to be take a merger.
Within the timeline Congress has set, if we think it's illegal and we can win in court, we should go to court and be honest about it.
And if we can't, get out of the way.
We brought back this thing called early termination, which is where we end investigations before the waiting period is expired.
And we say, nope, we think that this is so obviously pro-competitive.
Go ahead.
We're not even telling you to wait the full time.
Get out the door.
The Biden administration banned early termination.
They just refused to do it at all.
We've already brought it back.
We've been granting dozens of early terminations.
I think it's super important for promoting regulatory certainty and clarity.
I hear from CEOs all the time.
Look, you can tell us you're going to kill us as long as we know when it's happening, on what time frame and why.
We can all adjust.
We'll plan accordingly.
We know what's coming.
And that is the most important thing we can do, is be very open and honest about our process, about our timelines, about why we're going to do what we're going to do so that businesses can plan, grow, innovate, and make this country achieve the golden age that the president has told all of us he's after.
So, you know, a big concern lately has been sort of these acquisitions by foreign conglomerates, perhaps even American conglomerates that are just proxies for foreign nations, sometimes bad actors.
Is that within the scope of the FTC and should there be sort of a heightened concern and scrutiny there if it is, whether it's from an economic or certainly a national security standpoint?
Yeah, I mean, so the answer in my view is yes.
Now, like antitrust professor at some Ivy League school would be like, well, that's not the traditional doctrine.
But when you're an enforcer and you've got limited resources and you have to decide which issues you really want to focus on, a potential merger.
That sort of ties the American market more to the market of a potential foreign adversary absolutely should matter.
And we should be looking at that really closely.
And so part of making America competitive is not just making sure our businesses are competing with each other.
It's making sure America is competitive against the rest of the world.
And I think it absolutely should be relevant for how we are thinking about enforcement generally, even if it wouldn't be an argument that we would make to a judge.
Activity that diminishes America's ability to compete with the rest of the world needs to matter to how we're making enforcement decisions.
It would be crazy for it not to matter.
Are there sort of sector-specific concerns that you guys are more focused on than others?
You know, I know, you know, a big thing that you're doing on, you've gone after sort of big tech.
I think I know that was, you know, Google, Meta, Uber.
You know, those seems to be the big one.
And definitely, you know, sort of concerning to so many Americans who, you know, definitely have been sort of blindsided and sort of single-handedly targeted more, you know, certainly if you're on the conservative side of things.
How do you deal with that?
Yeah, so...
A couple of issues give me concern.
You're right about big tech and DOJ has the two big Google cases.
We have the Meta case.
And for me, this isn't really sort of like a big antitrust crusade.
It's just me as an American recognizing what became very clear to all of us in 2020, which is there are a handful of companies that exercise unbelievable amounts of power over our social lives, our political discourse, our elections, our ability to communicate with one another, to communicate our ideas to each other.
And basically, companies like Meta or Google, they're just different.
And we need to be really realistic about the importance of making sure that none of these companies can diminish the freedom that you and I take for granted and that we all want to make sure that the government can't do this to us, but making sure that a giant private company can't exercise huge control over our social and political life needs to matter too.
But this isn't just about big tech.
The market that gives me kind of the most concern on a day-in-day basis is healthcare.
All of us have to use it.
We have to use it all the time.
The president issued an EO to the whole government to take steps to make our health care markets more competitive, to drive our health care prices down.
He specifically focused on what he called middlemen.
We've got ongoing litigation against the PBMs.
We have a huge study on PBM competitiveness that we're running.
Really important to me.
That's the middleman, so people understand.
That's the middleman sort of between the actual pharma manufacturers who often are the ones that get vilified, you know, and your local pharmacy.
I mean, they're the guys taking sort of huge margins at certain times, you know, to do all these things when they're not actually doing anything.
But there's what there's only three PBMs in the whole country.
Right.
So there's, you know, even if it's not a monopoly, I mean, you got three people controlling the flow for very, you know, for all the pharmacies across the nation.
That seems to be a real big problem.
Yeah, and, you know, I just visited...
Very near to where I grew up in rural Virginia, an independent pharmacy, and just sat with a pharmacist for an hour and was like, what's it look like from your vantage point in the market, like interactions with PBMs?
And it was really illuminating.
It's hard to be an independent pharmacist out there, and independent pharmacies are part of the lifeblood of small-town America.
I mean, if you go down Main Street in a small town in rural Virginia, you've got a hardware store, you've got a pharmacy, you've got churches, and you've got a family restaurant or two, and that's sort of the beating heart of the community.
And independent pharmacies are closing all over the country, and it's really important to me.
And not just do we have three PBMs that control the overwhelming majority of the PBM market.
They're vertically integrated.
Yeah, some of them actually control some of the biggest pharmacy chains in the world as well.
So it's a little bit of a problem, right?
Yeah, and it's a real cause for concern.
And at the end of the day, you've got pharma companies up at the top of the chain.
That are coming up with innovative therapies and drugs all the time.
We have an entire system of laws designed to incent them to do that.
And then you've got the pharmacists that are actually serving customers like you and me on the ground.
And then we've got this sort of structure in the middle that actually controls parts up the chain and parts down the chain.
It's a real concern.
It's been a concern of the president since his first administration, and he's instructed the government to look at this.
We're sort of at the cutting edge of examining the effect that PBMs have on our markets, and that is one of my top priorities.
How does the healthcare priority relate to food supply and protecting supply chains as well?
Yeah, I mean, supply chain resiliency is super important.
And this is actually one of the sort of understated effects of good antitrust enforcement.
You know, monopoly is dangerous, not just to the prices that you and I pay at the store or online.
It's also really bad if you get into a crisis and you've only got one supplier of something.
If that supplier can't meet the demand...
We're in real trouble.
But if you've got lots of competitors in the supply chain, you know, if one falls through because of a crisis, others can fill in the gap.
And we saw what can happen if you've got sort of monopoly problems during COVID when the supply chain becomes really difficult.
And good antitrust enforcement that makes sure that there is robust competition means that you won't necessarily have these disasters that lead to massive shortages.
And that's one of the reasons that I care about so much.
But food supply, you know, there have been concerns for a very long time about, like, meatpacking and potential monopoly in meatpacking.
And we saw it when there were all sorts of meat shortages during COVID.
And our adversary is controlling a lot of those as well.
I mean, China owns a lot of the meatpackers.
Yeah, and China bought our principal pork company a couple years ago, and having grown up in farm country, it was kind of scary to think about China controlling that much of our food supply.
And so I think antitrust can help with supply chain resiliency in a really important way, and that's why it's important to take it seriously.
But at the end of the day, this isn't sort of like anti-business crusade.
Antitrust is pro-business because if you wind up with monopoly, then you get Congress coming in and regulating directly, and that's just much worse than having sort of case-by-case antitrust enforcement that promotes resiliency, allows for innovation, and avoids regulation.
So, Andrew, I would imagine the other place that affects so many people on here, because I know I see it as well, is sort of the inconsistency in the insurance markets.
Does the FTC take control of some of that?
Because everything is just sort of delay and deny, delay and deny.
It almost feels to the point like, what's the purpose of having insurance, even though sometimes you're mandated to actually have it?
But the premiums are so high, your deductibles are so high, that from the healthcare standpoint, unless you get hit by a bus, you're basically uninsured.
Are there things that you guys are looking at to do that?
Because I imagine from a day-to-day basis, you know, outside of healthcare, that's probably the next one that affects the average American the most daily.
No, you're definitely right about that.
So our Congress, for reasons you have to go back in time and ask them, wrote out insurance from our mandate, like directly wrote it out.
The states generally sort of regulate insurance directly, but...
You know, your relationship with your insurer is driven in part by the price of health care.
I mean, the insurer's willingness to cover what they cover, why, etc., is largely a function of sort of health care prices.
And that is something that we have to take very seriously.
And one of the things we really care about is making sure that, you know...
The way that pricing normally works in these healthcare markets is hospitals sit down and negotiate with the insurers on what prices they're going to charge for various therapies, treatments, interventions, etc.
And we promote competition in the hospital markets.
And if you have a hospital monopoly, they can go to the insurers and being like, yeah, I know what you think you should pay.
We're going to make you pay a lot more.
And that is where the FTC does some of its best work, is up the chain, making sure that when...
When insurers are sitting down with health care providers and negotiating, health care providers don't have so much economic power that they can command high prices, which the insurers are then going to pass on to you and me.
And so that's our role there.
You hear those stories all the time.
You go in for a minor procedure.
That'll be $27,000 bill to your insurance, which screws everyone, including yourself and your deductibles.
But then you're like, well, what if I pay cash?
It's like, oh, that's four bucks.
I'm like, wait, what do you mean?
That definitely seems something to be, let's just call it, a little bit disjointed.
And this is also a big problem for businesses outside of insurance because a lot of businesses in America self-insure.
A lot of them are covering a lot of this themselves rather than having an insurer do it.
The insurer basically helps them with administration.
But this can jack up their costs.
And if you've got sort of monopoly power being wielded by health care providers, businesses feel the pinch the same as you and me, and they have to pass that on to you and me.
And so part of how we make sure that businesses aren't drowning in this, too, is promoting competition among healthcare providers.
Even for businesses who wouldn't think about this, if they're self-insuring, as a huge proportion of American businesses do, they feel the pinch, too.
And so part of how we are helping businesses outside of the healthcare markets avoid high cost of healthcare is promoting competition in the healthcare markets.
So Andrew, what specific regulations are still on the books that you see as being anti-competitive?
And what's the sort of administrative law process to deregulate wherever that's appropriate?
Yeah, so I think sort of the classic example outside of the FTC are basically licensing type regulations or regulations that require people in order to participate in a business to check a bunch of boxes.
Those are classic barrier to entry type regulations.
They're often imposed.
By incumbent business participants who don't want to have to deal with upstart challengers.
Yeah, you can't possibly fit the bill even if you have the end product.
You just can't make the list to qualify.
That's right.
We don't care.
Or we're going to make the cost of qualifying so high that we're going to eliminate a lot of people from even participating.
And again, you know...
Regulations impose costs.
They always do.
And big businesses can generally comply because they've got good cash flow.
It's the upstarts.
It's the new guys who don't have the great cash flow yet but have a great idea that could revolutionize an industry and make all of our lives better.
Those high-cost regulations big businesses can cover and the little businesses and the innovators and the founders cannot.
Those are the ones we're looking for.
So the process that is going to be set up by this EO and by the APA is we're going to get public input on People's actual experiences with these regulations that prevented them from coming up with a good idea and getting it to market.
And then the agency heads are also going to give us their list and say, look, we think these are probably anti-competitive.
And then I've got armies of lawyers and economists who are going to take several weeks, because the president wants this done and wants it done quickly, looking at these things.
And then we're sending a list with our recommendations back to OMB and the White House and saying, we think you should delete these and we should delete these tomorrow.
And that's our recommendation.
And then the APA has a series of ways that you can delete regulations and the agencies will have our recommendations and our proposals for deletion.
And the president will be like, okay, time, start, go deleting.
And that's how it will go.
And then, of course, there will be litigation.
There always is.
But this is how you've got to get the ball rolling.
You can't let the fear of a lawsuit lead you to do nothing.
You've got to push the envelope.
And that is what this administration has done in an unprecedentedly helpful way.
It's like, push, push, push.
We'll deal with the litigation when it comes, but you've got to push because it's the only way to deregulate.
And that's what this is going to look like on my end.
So, I mean, it sounds like you've had a fairly aggressive first hundred days.
I hope the next hundred days is even more so.
But, you know, we've seen that, whether it's with DOJ, whether it's with the deportations of criminal legal aliens, you know, there has been a sort of a lot of lawfare, you know, pushing back.
You know, a district judge is able to overrule the president of the United States.
And I imagine, based on the way this has been done, obviously through very...
Partial and individually selected jurists, I imagine they'll try to do the same thing for the FTC.
How do you get around that?
Because, again, it does feel like a lot of it's designed just to be like, you know what?
We're going to wait it out.
We've got four years.
We'll kick the can down the road.
Let's see what happens at midterm.
We'll make it impossible for him to achieve his goals, even if those were the goals that were the mandate of the American people to get done.
And then we'll say, oh, look, they failed.
We're totally innocent on all of this, even if they've weaponized and manipulated a system.
Yeah, you're totally right about that.
What we have seen from district courts all over the country the last 100 days shocks even me.
And look, like I clerked on the Supreme Court.
I've been in the conservative legal movement, as they call it, for a long time.
I'm rarely shocked by this stuff.
The last 100 days have shocked me.
District judges in who knows where thinking that they wield the executive power that the Constitution gives the president and that we just elected the president to wield.
I think my view remains.
For all of the sort of bad apple district judges out there, the courts of appeals are more solid.
The Supreme Court is solid.
Push through.
Like, yes, the district judges are going to do what they're going to do.
Do not treat that as an insuperable obstacle.
Fight through the district court.
Fight into the appeals court.
Take it all the way to the Supreme Court.
Do not stop pushing.
This is often what happens is sort of like...
Bureaucratic exhaustion where you go, oh, well, we just had to fight all of the career bureaucrats to get this done and now we have to fight these district judges.
Fight.
Just keep fighting and fight as quickly as you can.
Expedited briefing schedules.
Get this thing out there.
Push as fast as you can.
Four years is not very long.
It just isn't.
And the only way to accomplish these objectives is to move swiftly.
Yeah, you got to get it right.
You got to make sure you're doing the right thing and you're checking the boxes.
But don't let time get in the way.
Check the boxes and then be ready to fight.
And I think that that's the president's impulse.
It's definitely the impulse at the FTC.
Well, I'm really glad to hear that.
Commissioner Andrew Ferguson of the Federal Trade Commission, thank you so much for being here.
Really appreciate it.
And I really look forward to seeing what you continue to do and just making sure we get this message out to people so they understand not just what you're doing, but also the obstacles that you are up against so they understand.
And hopefully we just get to some common sense ground, you know, that we can function as the country we deserve to function as.
Hear, hear.
Thanks a lot, Don.
Thank you very much, man.
Good talking to you.
Take care.
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