The Federal Trade Commission pressured three advertising firms into settlements that will likely result in more ad spending on conservative media platforms.
The FTC and eight US states filed a lawsuit against ad firms Dentsu, Publicis, and WPP yesterday, and simultaneously announced settlements with all three companies. The complaint alleges a conspiracy of “various interested parties to demonetize disfavored conservative news and opinion sites by denying them digital advertising revenue.” The FTC filed suit in US District Court for the Northern District of Texas, which happens to be Elon Musk’s preferred judicial venue.
In a press release, the FTC claimed that starting in 2018, the three firms “unlawfully colluded to impose common ‘brand safety’ standards across the digital advertising industry… The ad agencies, together with their primary competitors Omnicom and Interpublic Group, operated through trade associations to establish a common ‘Brand Safety Floor’ to target ‘misinformation.’” The FTC also said that “firms like NewsGuard and the Global Disinformation Index used this misinformation designation as a means to promote the demonetization of disfavored political viewpoints.”
“This unlawful collusion not only damaged our marketplace, but also distorted the marketplace of ideas by discriminating against speech and ideas that fell below the unlawfully agreed-upon floor,” FTC Chairman Andrew Ferguson said. “The proposed order remedies the dangers inherent to collusive practices and restores competition to the digital news ecosystem.” Omnicom and Interpublic which merged last year, are already subject to a similar FTC order.
The FTC complaint recycles various claims made by conservatives about brand-safety initiatives that attempted to reduce ad spending on sites distributing misinformation and other objectionable content. One of the FTC complaint’s main targets is the ad industry’s Global Alliance for Responsible Media (GARM) project, even though it was shut down nearly two years ago after a lawsuit filed by Musk’s X.
GARM, a World Federation of Advertisers project, set a Brand Safety Floor standard on misinformation “to ensure that advertising revenue would be denied to the conservative website Breitbart specifically,” the FTC said. As a result, “conservative publishers identified as publishing what the Brand Safety Floor defined as ‘misinformation’ suffered dramatic declines in their sales of digital advertising inventory,” the FTC said. A similar Brand Safety Floor standard was imposed by the American Association of Advertising Agencies’ Advertiser Protection Bureau (APB), the FTC said.
The FTC’s new lawsuit also complained that Media Matters for America pressured advertisers to remove ads from Fox News and X. Media Matters is a nonprofit journalism organization that drew Musk’s wrath in 2023 when it published an article showing that X placed ads next to pro-Nazi posts.
Trump FTC stamps out brand-safety initiatives
Musk lost a lawsuit against advertisers last month when a judge decided that the X boycott was legal. In another case, a judge blocked an FTC investigation into Media Matters, finding that the FTC retaliated against Media Matters after it “engaged in quintessential First Amendment activity when it published an online article criticizing Mr. Musk and X.”
Despite those losses, the Trump FTC has continued using its power to pressure ad companies into ending brand-safety initiatives. Last year, the FTC imposed merger conditions prohibiting advertising boycotts in its approval of Omnicom’s $13.5 billion acquisition of Interpublic.
This week’s settlements with Dentsu, Publicis, and WPP impose similar requirements. The deals were approved by US District Judge Mark Pittman the same day they were filed.
The settlements bar the ad firms from making agreements with third parties to refuse placement of ads “based on Covered Bases.” The settlements define Covered Bases as follows:
“Covered Bases” means (1) Political or ideological viewpoints (including viewpoints as to the veracity of news reporting or other politically or ideologically contested facts, such as their characterization as “misinformation,” “disinformation,” “bias,” or similar terms); (2) adherence to journalistic standards or ethics established or set by a Third Party; and/or (3) commitment or adherence to diversity, equity or inclusion (DEI), such as diverse ownership or casting. Covered Bases shall not include fraudulent content.
The settlements prohibit the use of third-party individuals or entities involved in “rating, ranking, or evaluating Media Publishers according to Covered Bases.” A business can still avoid advertising on certain platforms if these third parties are not involved, as the settlements let each ad company make agreements with each client about how to direct that client’s advertising spending.
The states that joined the FTC lawsuit against the ad companies are Florida, Indiana, Iowa, Montana, Nebraska, Texas, Utah, and West Virginia. The ad firms agreeing to the settlements did not admit the allegations in the complaint.
