Trump’s Consumer Watchdog Seeks to Break With Biden-Era Policies

The Federal Trade Commission’s recent string of children’s privacy enforcement actions highlight its new strategy of hewing closely to the “law as it is written,” according to Chris Mufarrige, who became director of the agency’s Bureau of Consumer Protection in February.

Companies can expect a “cop on the beat” focused on following the letter of the law, not one trying to “create law or move the law in a way that it doesn’t presently exist,” Mufarrige, a veteran of the first Trump administration, said in an interview. “The last administration was trying to create sort of ambiguous standards that became difficult for companies to set their compliance standards to,” Mufarrige said.

In its first eight months under President Donald Trump, the agency has sought to distance itself from a Biden-era regulator that carved out novel uses of the FTC Act’s Section 5 fair and deceptive practices authority. President Joe Biden’s agency used that authority to expand the definition of consumer harms and to go after industries including AI companies and data brokers.

“I don’t think we’ll see the kind of novel theories we’ve seen in the past, but they’re definitely going to enforce on privacy and consumer issues,” said Kathleen Benway, partner at Alston & Bird LLP and chief of staff of the consumer protection bureau in the first Trump administration.

“They’re not going to stop using unfairness, but where they are going to use it it’s going to be limited to those traditional financial, health and safety harms,” she said.

New Rule, No Rules

In contrast to the Biden administration, which rolled out more rules following a Supreme Court ruling that deprived the agency of an important legal tool to recoup money for consumers , the second Trump FTC has focused on existing laws. The agency has repeatedly declined to comment on the status of the Biden administration’s proposed rulemaking to rein in “commercial surveillance,” which Mufarrige dismissed as a concept that does “nothing to help us understand the practice.”

Both Mufarrige and Ferguson emphasize that Congress has the authority for making comprehensive privacy laws.

That approach rankles consumer advocates, but it’s been welcomed by some in industry who were critical of Biden’s FTC.

“My expectation is that we’ll see a real focus on prescriptive requirements established by Congress,” said Laura Riposo VanDruff, managing partner of Kelley Drye & Warren LLP’s Washington, office and a former FTC official. “I think that is reassuring to many in industry.”

Other rules, including one on consumer subscription cancellations and deceptive earnings claims, have also stalled under Trump, reflecting changed priorities.

“Congress wrote the FTC Act to be responsive to emerging businesses and technology,” said Samuel Levine, Biden’s consumer protection director. “Sticking to the black letter of the law doesn’t mean that the FTC Act needs to be frozen in time.”

New Role

Mufarrige previously served as chief of staff and attorney adviser to Republican FTC Commissioner Melissa Holyoak. Before that, he served in the first Trump administration at the Consumer Financial Protection Bureau.

He’s spent most of his tenure under Republican Chairman Andrew Ferguson with an entirely Republican commission since Trump fired the two Democratic members in March. The FTC Act allows no more than three commissioners of the same party, but doesn’t require a quorum for commission actions.

“As we’re looking to see where this FTC is going to focus its resources in enforcement, Chairman Ferguson is very much following President Trump’s priorities,” Benway said.

Litigation Strategy

Mufarrige said he was seeking to restore confidence in civil investigative demands—administrative subpoenas used to gather evidence for civil investigations. Companies that are transparent and responsive “will get a fair shake,” he said.

That approach could be a boon for companies that accused the Biden administration of being overly burdensome in investigations.

“It’s good news to hear that the current administration understands there are ways to get information that are less burdensome and hear the companies out,” said Lucy Morris, partner at Hudson Cook LLP and former assistant to the director of the FTC’s consumer protection bureau.

Levine said that he is “much more concerned by companies blowing off investigations or hiring lobbyists to scuttle” them than he is companies not liking investigation demands.

Those investigative strategies have encountered setbacks. Last month, a US federal judge ruled that an agency CID for a collusion investigation of progressive advocacy group Media Matters violated the First Amendment and was a “retaliatory act.”

“A court found that Media Matters didn’t get a fair shake, that didn’t happen under the Khan FTC,” said Levine.

Regarding the agency’s litigation strategy, Mufarrige said the agency must consider the cost of suing major companies.

“If a company produces documents and is transparent, more often than not we can settle, but if not, we’ll litigate,” Mufarrige said.

Kids Compliance

Mufarrige said the recent settlements against Disney Inc. for $10 million—which came out of a Biden-era investigation—and a smart toy maker illustrate the FTC’s sharpened focus on violations of the Children’s Online Privacy Protection Act.

He warned that many companies still fall short in assessing who their users are.

“There can be an incentive to maybe not invest as much as you probably should to determine who the users are on your platform,” he said. “And that’s where companies get in trouble.”

The agency has signaled its hopes for age assurance technology, with Ferguson calling it the “future of protecting kids online.”

Looking Ahead

Mufarrige also highlighted financial services and financial technology as areas of agency focus, pointing to a settlement this year with cash advance firm Cleo AI. He cited the Fair Credit Reporting Act as a priority privacy law for agency enforcement.

The FTC is also preparing for enforcement of newer laws, including the Protecting Americans’ Data from Foreign Adversaries Act and the Take It Down Act, which targets nonconsensual intimate imagery. Internal task forces are already in place to ensure day-one enforcement when the latter goes into effect next year, Mufarrige said.