Independent federal agencies were a hallmark of the Progressive Era, designed to operate at arm’s length from elected officials. Over time, however, many of these agencies have accumulated powers that raise serious constitutional concerns—writing rules, enforcing them, and adjudicating disputes internally.
In a recent RealClearMarkets piece, Charles Sauer argues that the Federal Trade Commission may be taking a small but meaningful step away from that model. The FTC’s decision to seek a permanent injunction—rather than relying on its own administrative law judges—signals a possible shift toward greater judicial accountability.
“Independent agencies exercise legislative and enforcement powers, as well as judicial powers through Administrative Law Judges—an arrangement that would have horrified the drafters of the Constitution.”
At the center of Sauer’s analysis is the FTC’s attempt to block the proposed acquisition of Pittsburgh Paint by Henkel. Traditionally, the agency would seek a preliminary injunction while its own ALJs heard the case internally. That approach allows the FTC to prevail by merely raising doubts about competitive effects—often enough to kill a deal before it ever reaches a full trial.
“In practice, the FTC can win a preliminary injunction simply by raising questions that are sufficiently serious or doubtful, rather than proving actual harm to competition.”
By contrast, asking a federal court for a permanent injunction forces the agency to meet a much higher standard. The FTC must show that a merger would actually lessen competition or tend to create a monopoly—bringing antitrust enforcement closer to traditional notions of due process.
This distinction matters not just for defendants, but for markets as a whole. Requiring stronger proof may slow enforcement and increase litigation costs, but it also discourages speculative or weak cases that chill investment.
“Requiring the FTC to meet that higher standard could encourage beneficial mergers, while making the agency more cautious about bringing weak cases.”
Sauer also highlights the broader constitutional implications. The Founders understood that liberty depends on separating the powers to make laws, enforce them, and judge disputes. Agencies that combine all three undermine that principle—and public confidence in the legal system.
“Separating the creation of laws, their enforcement, and their adjudication is essential to preserving liberty.”
If the FTC is truly moving away from preliminary injunctions and internal adjudication, Sauer argues, it could mark a meaningful step toward restoring the rule of law. Congress should reinforce that shift through serious oversight and reforms that limit the use of administrative shortcuts in antitrust enforcement.
Read more in RealClearMarkets by clicking here.
