• Abandoning administrative court eliminates “uniqueness” and could strengthen case to eliminate FTC’s competition mandate
• Obviates constitutional challenges from merging parties, easing FTC resource constraints
• Opens door to commissioners’ direct participation in settlement negotiations

The Federal Trade Commission’s (FTC) move towards forgoing its administrative court in merger challenges could extend litigation timelines and influence arguments to consolidate US antitrust authority into one agency. It could also allow the commissioners to have a more direct say in litigation, including merger settlement negotiations.

The FTC’s shifting strategy to seek permanent injunctions of mergers in federal court – the same way the Department of Justice (DOJ) pursues merger litigation – was solidified when a New York federal judge on 14 August enjoined the merger of Henkel and A-Paint. The FTC had sued to block the deal in the Southern District of New York in December.

“This latest court win also marks the Commission’s new approach to seeking permanent injunctions to block anticompetitive mergers without the need to continue cases in administrative proceedings,” the FTC press release read.

FTC Chair Andrew Ferguson has spoken publicly about this “the new norm,” which marks a departure from the FTC’s previous strategy of filing a challenge in its in-house administrative court, also called Part Three, simultaneously with a preliminary injunction in federal court.

Ferguson said that litigating the entire process in federal court eliminates the constitutional challenges that have persistently cropped up in FTC merger cases since the Supreme Court’s 2023 Axon decision opened the floodgates to such criticisms.

The win “does help validate their strategy, as a matter of internal politics within the agency,” said Hill Wellford, an antitrust partner and co-head of the antitrust group at Vinson & Elkins.

The case for one agency 

“The idea that you won’t use the administrative process at all for mergers strikes me as a serious mistake,” said William Kovacic, a former FTC Chair and current professor of antitrust law and director of George Washington University’s Competition Law Center.

Kovacic said he believed the move could strengthen arguments in favor of one agency. “I think it’s a step in the direction of combining the FTC’s competition mandate and the Justice Department’s mandate,” he said.

One of the FTC’s traditional strengths was its ability to use its administrative adjudication process that Congress explicitly designed for its specialized antitrust expertise, Kovacic said. If the FTC abandons that, it becomes easier to make the argument that two agencies doing the same thing with the same approach is unnecessary, he said.

“It definitely makes the FTC a little less unique, and in a certain way, makes the arguments in favor of one agency a little bit more pointed,” said Rahul Rao, an antitrust partner at White & Case and former deputy director of the FTC’s bureau of competition.

President Trump’s firing of the Democratic Commissioners in March 2025 and the Supreme Court’s subsequent decision in Trump v. Slaughter is another “major step” on the path to eliminating the FTC’s competition mandate, Kovacic said.

But consolidating the jurisdiction for US merger control within the DOJ would take a feat of political will. The Senate Commerce Committee is a major roadblock, as it is unlikely to agree to relinquish control over the FTC and the industries it reviews, according to Kovacic, Wellford and Rao.

The One Agency Act, a bill that would consolidate antitrust enforcement authority within the DOJ, has been languishing in the judiciary committees of both the House and the Senate since it was most recently reintroduced in early 2025.

The FTC’s industries have “in a sense become the committee’s industries, and the committee doesn’t want to divest themselves of the campaign contributions and influence that come from overseeing specific sectors of the economy,” Kovacic said.

Wellford disagreed that the move strengthens the one agency argument. “Making the agencies practically much more indistinguishable takes away the impetus for trying to do away with the FTC,” he said.

Ferguson’s decision is subject to change with a new administration. “I don’t think this is a permanent decision by any means,” said David B. Schwartz, an antitrust partner at Bryan Cave Leighton Paisner and a former FTC litigator.

“My experience at the agency was that Part Three was very rigorous and was in many cases tougher because you had antitrust experts, especially at the commission level, really digging into your logic,” Schwartz said.

But the Slaughter decision complicates the feasibility of bringing back the administrative court, Kovacic said. “The commissioners were the ultimate decisionmakers in that administrative process, and you can wonder how legitimate the adjudication process will seem if the president can simply fire the adjudicators,” he said.

Constitutional challenges and resource constraints 

Ferguson’s motivations for the change likely stem from a sincere concern about the legitimacy of the administrative court, Rao and Wellford both said.

But he may have also pitched the move to staff as a practical solution to the waste of resources spent fighting constitutional arguments, Wellford said. “No possibility of a constitutional litigation sideshow is quite a significant benefit,” he said.

It could also help the agency address resource constraints at a time when it has reduced its headcount, he said. “I think it’s a pretty powerful argument in favor of what Chair Ferguson has done,” Wellford said.

Litigating constitutional challenges has been a distraction from what FTC staff would consider their core focus – the merits of the case, Rao said. The change “should give the agency writ large, holistically, more bandwidth to be doing other things,” he said.

Bringing FTC cases in federal court also eliminates fairness questions – such as why certain deals have been subject to different procedures depending on which agency reviews them, Rao said. “I think that the FTC following a process that is entirely aligned with the Department of Justice process takes that concern away,” he said.

However, Ferguson’s stance on “democratic legitimacy” is somewhat undermined by the Slaughter decision, said Schwartz. “There are broader democratic legitimacy issues that the agency faces, and this is a little bit like a Band-Aid,” he said.

Practical effects 

The change is unlikely to have a significant effect on day-to-day practice for defense counsel, Schwartz and Wellford both said.

Wellford said that the main difference will be not having to explain the FTC administrative court — which he described as a “footnote”. “Now, we essentially have removed the footnote, and that footnote was the only significant difference between counseling DOJ versus FTC matters,” he said.

The FTC’s new strategy has also changed Wellford’s assessment of the speed of the agencies. “The FTC has, generally speaking, been a little slower. If you get involved in the Part Three litigation, it is much slower,” he said. “I think we can now say that the FTC is just as fast.”

“It used to be the case that … if you had a new industry [and] you weren’t sure whether you were going to go to DOJ or the FTC, you might want to put a thumb on the scale and try to push it towards DOJ, just for speed,” Wellford said.

Schwartz and Rao said they did not see much of a difference between the agencies in terms of speed.

The abandonment of the FTC’s administrative court may also allow the commissioners to comment on and participate in FTC merger reviews more readily, Schwartz said.

Because the commissioners can also be judges in the administrative process, it limits what they can say publicly. “By not going to Part Three anymore, Chairman Ferguson and Commissioner Meador have a little more freedom now to say what they want about the issues of the day,” Schwartz said.

When a matter is filed in administrative court, a “wall” goes up to prevent the commissioners from engaging with the Bureau of Competition front office on the merits of specific cases, Rao said. Removing that wall “allows more communication between the Bureau of Competition and the commissioners in terms of litigation strategy, in terms of settlement strategy, things like that,” he said.

In other words, bringing cases directly in federal court gives Ferguson and Meador more of a say in how each matter gets decided. “It gives them more visibility, and it also gives them more ability to direct litigation,” Rao said.

Higher legal standard, longer process 

The difference in the legal standard will be most evident when it comes to litigation strategy. “There are several practical differences,” Rao said. One of those is time.

Switching to a permanent injunction extends the FTC’s usual litigation timeline from a few months to several months or even a year, Rao said. A slower process will give both parties more time to develop their case or their defenses — and FTC merger staff “are constantly running a marathon at a sprint’s pace,” he said.

For defense counsel, the shift could translate into “certain provisions in deal terms of how long litigation can take,” Rao said – especially in industries like pharmaceuticals, which have traditionally been subject to the old FTC procedure.

However, the difference in the legal standards “has been collapsing into almost nothing as a practical matter, because judges understand that if they grant the preliminary injunction against the parties, that probably does kill the deal,” Wellford said.

A good FTC litigator would not go into a preliminary injunction hearing and tell the judge that the agency might not have enough for a full block, Wellford explained. “It’s obviously stronger to say, ‘This deal stinks. We have enough for a permanent injunction … the truth is that we would win under any standard,’” he said.

One downside for merging parties is that it removes the parties’ choice of venue in the appeals process, Schwartz said. “You [could] choose any circuit you want to appeal to, and that was often a big procedural benefit to the parties of having to go through Part Three,” he said.

A spokesperson for the FTC did not respond to a request for comment.