US Supreme Court Overturns FTC Independence – Far-Reaching Implications for Transatlantic Data Transfers

In March 2025, US President Trump dismissed Democratic FTC Commissioner Rebecca Kelly Slaughter, stating that her continued service was “inconsistent with my Administration’s priorities.” Slaughter filed suit, invoking the FTC Act of 1914, which permits the removal of commissioners only for cause (“inefficiency, neglect of duty, or malfeasance in office”).

The Supreme Court held that the US President may dismiss FTC commissioners at will – regardless of whether cause exists (US Supreme Court Decision of June 29, 2026, No. 25-332 (Trump v. Slaughter)).

Key Legal Issues

The central question of the case was whether the statutory protection of Federal Trade Commission (FTC) commissioners against removal without cause is compatible with the constitutional principle of separation of powers.

By a 6-3 majority, the US Supreme Court held on June 29, 2026:

• The statutory restriction on the President’s removal authority violates the separation of powers enshrined in the Constitution.
• The FTC in its current form clearly exercises executive power – it enforces approximately 80 federal statutes, issues binding regulations, conducts investigations, and brings civil actions on behalf of the United States. The Constitution therefore requires oversight by the President as head of the executive branch.
• The 91-year-old precedent Humphrey's Executor is expressly overruled insofar as it afforded members of an agency exercising executive power protection from removal by the President.

The Court justified the President’s authority to remove FTC commissioners by reference to the constitutional chain of accountability: “Subordinates who exercise the President's power are subject to removal by him. Then, and only then, can they remain accountable to the President, and the President to the people."

Impact of the Decision on FTC Independence

The decision not only places the removal of FTC commissioners at the President’s discretion but also strips the FTC of its institutional independence. The three justices who dissented from the majority opinion expressly warned that the agency’s independence safeguards can now be circumvented and rendered ineffective:

• Bipartisan Composition: “Bipartisan-appointment requirements can easily be evaded simply by firing all Commissioners of the opposite party. Just look at the FTC today."
• Fixed Terms of Office: “Lengthy fixed terms, aimed at ensuring stability, continuity, and the development of expertise within an agency, can also be cut short at the President's will."
• Multi-Member Structure: “With the most extreme exercises of at-will removal, the multimember structure itself could be eliminated, by executive fiat, with sufficient arbitrary firings to winnow a commission down to a sole remaining chair."

Following the dismissal of both Democratic commissioners, only two Republican commissioners currently remain in office. The fifth seat had already been vacant before the dismissal of the two Democratic commissioners and has not yet been filled.

Warning of Concentration of Power in the Presidency

Even one of the six justices who joined the majority opinion warns of the consequences. He points out that Congress has conferred upon independent agencies not only executive but also extensive legislative and judicial powers. The FTC issues regulations with the force of law (legislative), conducts administrative proceedings with binding effect (judicial), and enforces its decisions, which can include fines in the billions of dollars (executive). Following this ruling, the President can effectively exert influence over all three branches of government in this sphere.

He therefore calls for: “From here, the only sure path is to finish the journey we start today and restore legislative and judicial powers to where they belong: in Congress and the courts."

Implications for the Transfer of Personal Data to the United States

The ruling also has direct implications for data protection in the EU. The currently valid EU-US Data Privacy Framework of 2023, together with the European Commission’s adequacy decision, serves as the legal basis for the transfer of personal data from the EU to the United States. The FTC plays a key role in this context: it acts as an independent supervisory authority that monitors and enforces compliance with data protection obligations by US companies. The European Commission’s adequacy decision (Implementing Decision (EU) 2023/1795) explicitly and repeatedly refers to the FTC as an independent agency. Recital 60 expressly states: “The FTC is an independent agency [...].”

Under Art. 16(2) TFEU and Art. 8(3) of the EU Charter of Fundamental Rights, data protection supervision must be carried out by an independent body. The Supreme Court’s ruling eliminates the FTC’s independence, thereby removing the legal foundation of the EU-US Data Privacy Framework.

In practice, the European Commission’s adequacy decision remains in effect until it is revoked by the European Commission or invalidated by the CJEU. In the long term, however, it is expected that the EU-US Data Privacy Framework will cease to serve as a basis for the transfer of personal data to the United States.

Practical Guidance for EU Companies

1. Review data transfers to the United States: Companies that rely on the EU-US Data Privacy Framework as the legal basis for transferring personal data to the United States should promptly evaluate their transfer mechanisms. A judicial invalidation of the EU-US Data Privacy Framework is now significantly more likely.
2. Strengthen alternative transfer mechanisms: Standard Contractual Clauses (SCCs) and Binding Corporate Rules (BCRs) are once again gaining importance. However, their viability is also in question if independent supervision and review are no longer guaranteed in the United States, meaning an equivalent level of data protection can no longer be ensured.
3. Factor in regulatory instability: The decision has the potential to fundamentally alter the FTC’s practices in consumer protection and competition. Companies with US operations – particularly in e-commerce, the platform economy, and digital services – should anticipate increased regulatory volatility.
4. Monitor further developments: The ruling does not automatically halt transatlantic data transfers that rely on the EU-US Data Privacy Framework. However, the European Commission and European data protection authorities will need to respond to the ruling. Companies should keep a close eye on future developments and, in particular, establish a regular evaluation process in the area of data protection in order to identify and implement necessary adjustments in a timely manner.