The FTC Risks Chilling Speech With Its Advertising Boycott Investigation
The Federal Trade Commission (FTC) opened an investigation into Media Matters for America, a progressive nonprofit dedicated to "monitoring, analyzing, and correcting conservative misinformation in the U.S. media," for its role in an advertising boycott of X in May. On Monday, the FTC expanded the investigation to major advertisers, including Omnicron Group and the Interpublic Group, both of which are founding members of the World Federation of Advertisers (WFA). The FTC's investigation follows not only Elon Musk's intimate involvement with the Trump administration but also lawsuits filed by X Corp. against Media Matters and the WFA.
In November 2023, X Corp. filed a lawsuit against Media Matters in the U.S. District Court for the Northern District of Texas accusing the nonprofit of making false and malicious statements disparaging the quality of X, which led to the subsequent loss of advertising contracts. In its complaint, X Corp. accuses Media Matters of publicly smearing the company by "knowingly and maliciously manufactur[ing] side-by-side images [of] advertisers' posts…beside Neo-Nazi and white-nationalist fringe content." X Corp. cites "99% of [its] measured ad placement in 2023 [appearing] adjacent to content scoring above the Global Alliance for Responsible Media's [GARM] brand safety floor" as contradicting Media Matter's portrayal of the platform.
X Corp. filed an antitrust lawsuit against GARM's parent organization, the WFA, in August 2024. After Musk acquired Twitter (now X) in November 2022, members contacted GARM for advice on whether to continue advertising on the platform. At this time, the suit alleges, GARM "conveyed to its members its concerns about Twitter's compliance with GARM's standards"—concerns exacerbated by critical coverage from progressive nonprofits like Media Matters—prompting a boycott that caused revenues to dip 80 percent below forecasts. X Corp. alleges that WFA members violated the Sherman Antitrust Act's prohibition of conspiracies in restraint of trade by "withholding purchases of digital advertising from Twitter."
Supreme Court precedent strongly suggests this allegation is meritless.
Vikram David Amar and Ashutosh Bhagwat, both professors at the University of California, Davis School of Law, cite NAACP v. Claiborne (1982) as evidence that the First Amendment applies to politically motivated boycotts. Amar and Bhagwat explain that, in Claiborne, "the Court insulated the boycotters from liability under state laws seeking to protect fair economic competition and held that 'the nonviolent elements of [the boycotters'] activities [were] entitled to the protection of the First Amendment.'"
Amar and Bhagwat also invoke 303 Creative v. Elenis (2023), where the Court ruled that "a seller of inherently expressive services…can't be compelled [by a consumer] to provide speech." It stands to reason that consumers (like advertisers) may not be forced to buy expressive services they disagree with. Forcing companies to pay for speech with which they disagree is unconstitutional.
The FTC's advertising boycott investigation is a waste of the commission's time and taxpayers' money because, even if advocacy groups and advertisers colluded to boycott X, the First Amendment forecloses antitrust prosecution given the expressive nature of the X platform and its advertising service.
The post The FTC Risks Chilling Speech With Its Advertising Boycott Investigation appeared first on Reason.com.
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