FTC Modifies Role Of Administrative Judges Amid Heightened Agency Scrutiny

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On June 2^nd, 2023, the Federal Trade Commission ("the FTC") announced modifications to its in-house adjudicative proceedings. Under these new rules, an administrative law judge ("ALJ") presiding over an administrative hearing can only issue "recommended" decisions that are reviewed automatically by the FTC Commissioners (the "Commission"). The Commission, during their now-automatic review, may affirm the recommended decision in full or reject the decision, in whole or in part, and issue its own decision adopting different findings of fact or conclusions of law. Before the Commission acts on an ALJ's recommended decision, it must provide the parties with an opportunity to submit a brief that states any exceptions to the decision.

Previously, an ALJ rendered an "initial" decision that became the FTC's final order unless a party or the Commission sought review of the decision. These changes are not subject to a notice and comment period and will become final upon publication in the Federal Register.

The changes arrive amid increasing FTC scrutiny from lawmakers and the judiciary. On June 1^st, the House Committee on Oversight and Accountability launched an investigation into allegations that the FTC is "abusing its power and disregarding the rule of law." The U.S. Supreme Court recently held that constitutional challenges to the FTC's in-house proceedings can be brought directly into federal court without going through the FTC's internal appeals process.¹

As the FTC increases antitrust enforcement under President Biden's Executive Order on Competition, we are closely monitoring developments and changes surrounding its procedures and enforcement strategies.

Footnote

1. Axon Enterprises, Inc. v. FTC, No. 21-86 (U.S. Apr. 14, 2023).

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