FTC Nears Settlements in Ad Boycott Probe

“We are actually in settlement negotiations with targets of this investigation and we anticipate public announcements on that front soon,” FTC lawyer Thomas Byron told the US Court of Appeals for the DC Circuit on Monday. “We’ll inform the court, of course, as soon as the commission takes action.”

The probe centers on whether more than a dozen advertising and media organizations may have violated antitrust laws by working together to avoid placing ads alongside content deemed hateful, misleading, or false. Per Bloomberg, the investigation spans multiple industry players, including trade groups such as the Interactive Advertising Bureau and the World Federation of Advertisers, as well as media analysis firm Ad Fontes Media Inc. The inquiry also intersects with ongoing litigation involving X and Media Matters for America.

The hearing itself focused on a separate but related legal dispute between the FTC and Media Matters. Byron appeared before a three-judge panel seeking to reinstate a civil investigative demand issued to the watchdog group. A lower court had previously blocked the request, ruling it could constitute unlawful retaliation against Media Matters for exercising free speech rights.

During the proceedings, Byron argued that the injunction was wrongly granted and that the agency’s actions were rooted in legitimate enforcement concerns. “This is not retaliatory action,” he said. “This is a serious investigation into collusive conduct.”

He further contended that Media Matters could not demonstrate that retaliation was the sole motivation behind the FTC’s demand for information. Byron also suggested that any harm suffered by the group was largely self-inflicted, noting that the demand itself was confidential and only became public after Media Matters challenged it in court.

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That argument drew skepticism from the bench. Judge Patricia Millet questioned whether such reasoning would effectively discourage legal challenges to government actions. “We’re supposed to find that this is self-inflicted because no one would have known about the CID if they had done nothing?” she said. That argument “would license the government to engage in rampant constitutional violations of speech. It would, because no one can ever take it to court.”

The broader controversy traces back to a November 2023 report by Media Matters, which alleged that advertising on X appeared alongside antisemitic and Nazi-related content. The findings prompted several companies to withdraw advertising from the platform and led Musk to file a lawsuit against the group, a case that remains ongoing in federal court in Texas.

Judge Millet also pointed to public remarks by FTC Chairman Andrew Ferguson, who said he intended to “go after the radical left and use advertiser boycotts to do so,” raising questions about the agency’s motivations.

Byron pushed back on the characterization, emphasizing that the investigation is focused on potential violations of competition law rather than political viewpoints. “Judge Millet, this is not about being anti-Nazi,” he said. “The antitrust theory here is that by colluding among advertisers, that reduces advertising on certain platforms in violation of the antitrust laws. That is a legitimate subject, a serious concern of antitrust enforcement.”

Still, Byron acknowledged that Media Matters may hold information relevant to the FTC’s inquiry, partly due to its involvement in litigation with Musk. That connection became a focal point for the group’s legal defense.

Media Matters attorney Nathaniel Zelinsky argued that the FTC’s own statements undermine its appeal. “The only argument they’ve given in this court is to say, ‘Well you know that Elon Musk’s campaign of retaliation is why,’” he said. “That should raise deep concerns and disproves the argument that they somehow would have gone after Media Matters for another reason.”

Source: Bloomberg