FTC's Ramirez Resigning Feb. 10; Experts Don't Foresee Problem With 2 Commissioners

"The Commission will continue to function well with only two members," emailed former Commissioner Julie Brill, a Democrat who left at the end of March (see 1603220021). She said Commissioners Maureen Ohlhausen, a Republican, and Terrell McSweeny, a Democrat, "agree on many enforcement issues, and will likely strive to pursue matters that aim to alleviate substantial harm to consumers.” Consumer Protection Bureau Chief Jessica Rich told us Thursday that "most of our matters ... are unanimous" and didn't foresee a problem with two commissioners.

University of California-Berkeley School of Law adjunct law professor Chris Hoofnagle, an expert on the FTC, emailed that it "can function will less than a full complement" and it "could plausibly operate with just two Commissioners under the agency's rules." He cited a regulation that said: "A majority of the members of the Commission in office and not recused from participating in a matter ... constitutes a quorum for the transaction of business in that matter." But he said a conflict between two commissioners "would be a tie, resulting in no action." In that regard, the FTC differs from other agencies like the FCC, which needs a quorum of three commissioners to conduct business (see 1612140030) and the Privacy and Civil Liberties Oversight Board, which is down to two members, restricting some board activities (see 1612270051 and 1701110029).

The normally five-member FTC has been doing business with three members since the end of March, when Brill left (see 1603220021). Commissioner Joshua Wright, a member of Trump's FTC landing team, left the agency in August 2015 (see 1508170051). It has been rumored that Ohlhausen may lead the commission at least on an interim basis, but the Trump team has been mum and many experts have said the FTC isn't a high priority for the incoming administration.

George Washington University professor Howard Beales, who headed the Consumer Protection Bureau from 2001 to 2004, told us Thursday that most of what the commissioners "do is by consensus anyway. It is unlike many other places and that's been a little bit less true the last couple of years but still there's a substantial amount of consensus on most of what they do. And so it can work relatively smoothly." George Mason University associate law professor James Cooper, who worked in the Office of Policy Planning and advised then-Chairman William Kovacic, said he's unsure if the FTC has ever operated with two commissioners but didn't think it would be an issue.

It has been expected that Ramirez, a Democrat has been on the commission since 2010, would step down. An FTC official said Ramirez is staying on after Trump's inauguration to clean up her office and help with the transition. “It has been the honor of a lifetime to lead the Federal Trade Commission and to have played a role in advancing American consumers’ ability to navigate fast-paced digital markets and promoting business competition across the economy," said the chairwoman in a statement.

Senate Judiciary Antitrust Subcommittee Chairman Mike Lee, R-Utah, said he expects "the next president to nominate new commissioners shortly, and I hope the Senate will confirm them swiftly." Ranking member Amy Klobuchar, D-Minn., in the same statement praised Ramirez's commitment to the FTC, which litigated as many as eight antitrust cases simultaneously. Under Ramirez's tenure, the FTC brought 400 law enforcement actions in various consumer protection matters and nearly 100 actions challenging anticompetitive behaviors and mergers and acquisitions, the commission's release said. The agency also issued reports on big data, data brokers, IoT, mobile cramming, patent assertion entities and the sharing economy, among others, over the last four years.

Several experts said Ramirez's leadership will have a lasting impact. Perkins Coie attorney Janis Kestenbaum, a former aide to Ramirez, told us her former boss will be remembered for her FTC's activities in privacy and data security, advertising and anti-fraud laws as well as her early recognition of the importance of the IoT "long before other sources." Kestenbaum said Ramirez also built up technological and technical infrastructure such as the Office of Technology Research and Investigation within the agency and made an effort to engage with the broader community of privacy and security researchers. "She was really just all about the substance ... give me the facts, give me the law and I'll figure out the right thing to do," said Kestenbaum. She didn't think Ramirez's departure would affect the agency's work. "It's quite possible that this has absolutely no effect on the activity that comes out of the agency in the coming months," said Kestenbaum, saying Ohlhausen and McSweeny "will roll up their sleeves and make sure the agency continues to do its work."

Ramirez's "extraordinary competence, strong leadership and bipartisanship" created an effective FTC that has dealt with major issues including IoT and privacy, "and managed to protect consumers while giving businesses guardrails that encouraged innovation," said CTA President Gary Shapiro said in a statement. Center for Digital Democracy Executive Director Jeff Chester said in a statement that Ramirez understood the benefits and risks of IoT, "cast a spotlight" on emerging privacy matters related to smart TVs and cross-device and helped the agency stay current with digital media and data issues. Brill emailed that Ramirez's focus on the IoT, patent issues and improving FTC technological capacity "are among the many examples of her strong stewardship of the agency."