In July and August, we discussed the president's role in setting antitrust policy at the Department of Justice, Antitrust Division. Specifically, we pointed out that presidents routinely face ­competing domestic and foreign policy challenges that require a delicate balance and flexible approach to antitrust enforcement. For example, President John F. Kennedy directed the DOJ to investigate the steel industry for price fixing because of concerns about labor strikes and monetary inflation. Likewise, President Harry S. Truman chose not to pursue criminal antitrust charges against the oil industry because of national security concerns, specifically the threat of a political coup in Iran and concerns that the Soviet Union would encroach American interests in the Middle East. Therefore, we concluded that the Antitrust Division has not historically (and should not be ­constitutionally) completely independent from the White House.

In marked contrast to the DOJ, the Federal Trade Commission (FTC) was conceived by President Woodrow Wilson and others and designed by Congress to operate independently from the Executive Branch because of its broad power to ­define ­business norms as a necessary ­consequence of its broad authority to prosecute ­”unfair methods of competitions” and the adjudicatory functions carried out by the FTC's ­administrative law judges and the ­commission itself. The Supreme Court once noted, “the commission acts in part quasi legislatively and in part quasi judicially.” Therefore, the Federal Trade Commission Act, which created the FTC in 1914 and authorized it to enforce the antitrust laws, contains a number of provisions designed to insulate the FTC from the White House.

First, the FTC Act mandates political diversity. It provides, “not more than three of the [FTC's] commissioners shall be members of the same political party.” The other two members must be affiliated with a different party. In recent history, this means the commission has been populated by three Democrats and two Republicans or vice versa, depending on the political affiliation of the sitting president. Since the 1950s, the FTC Act permits the president to choose “a chairman from the commission's membership.” Second, the FTC Act requires Congress to confirm the president's appointees and limits the president's authority to remove commissioners. It provides that FTC commissioners “shall be appointed by the president, by and with the advice and consent of the Senate” to staggered seven-year terms. Moreover, commissioners may only “be removed by the president for inefficiency, neglect of duty, or malfeasance in office,” and “any person chosen to fill a vacancy shall be appointed only for the unexpired term of the commissioner whom he shall succeed.” “A vacancy in the commission shall not impair the right of the remaining commissioners to exercise all the powers of the commission.”