Post by CMS

A recent US Supreme Court ruling has introduced new legal uncertainty into the independence of the US Federal Trade Commission (“FTC”). While the decision does not itself invalidate transatlantic transfer mechanisms, it materially strengthens arguments that one of their foundational assumptions i.e. independent oversight, may be weakened. Given the FTC’s role as a key enforcement body within the EU–US Data Privacy Framework, this may affect the legal foundations supporting EU–US data sharing, impacting global data flows. The ruling on Monday 29 June 2026 expanded the President’s powers over the FTC. The Court held that FTC commissioners may be removed at will by the President, and it signals that similar protections at dozens of other independent agencies may be constitutionally vulnerable. The decision is a significant constitutional development. The Court concluded that the FTC exercises core executive powers, including rulemaking with legal effect, investigations, administrative adjudication, and civil enforcement. As such, the FTC must be subject to presidential control. In doing so, the Court rejected earlier case law that had treated the FTC as operating with a degree of independence. For any businesses trading in the US, this is likely to impact the entire regulatory landscape. Independent agencies that regulate competition, consumer protection, energy, product safety, financial markets, nuclear power and communications may become more directly responsive to presidential priorities. At the same time, the Court indicated that not all institutional arrangements are necessarily affected in the same way, leaving open questions about the position of certain bodies with distinct historical or functional characteristics. Whilst this fundamentally changes the regulatory landscape in the US for a number of agencies and oversight bodies, the decision also carries transatlantic implications: by casting doubt on the independence of US oversight bodies, it may affect aspects of the legal foundations of EU–US sharing of personal data (including the EU-US Privacy Framework). Read more here: https://lnkd.in/eJ3ut24e For further information, reach out to the authors Sam De Silva, Emily Barwell or to your usual CMS contact.