FTC Issues Sweeping Demands to Media Rating Firms Over Industry Ties

Yahoo

7 days ago

The U.S. Federal Trade Commission is investigating media credibility firms about their industry relationships, requiring organizations to hand over information about operations, finances, and communications, The New York Times first reported, and ADWEEK has independently verified.
The FTC has issued Civil Investigative Demand letters-which, like subpoenas, require recipients to produce documents and respond to inquiries-to organizations including Media Matters for America, as first reported by The New York Times last week, and the news rating company Ad Fontes Media, ADWEEK has independently confirmed.
The development highlights a broader pattern of heightened scrutiny by the U.S. government in recent years toward the advertising industry. Last year, a congressional investigation determined that the Global Alliance for Responsible Media, a leading advertising coalition, colluded in a politically motivated effort to suppress right-wing media by steering ad dollars away from outlets like Fox News, Breitbart, and The Daily Wire. The House Judiciary Committee said at the time that GARM "likely violated federal antitrust laws."
In one letter issued on May 20, obtained by ADWEEK, the FTC demands the organization produce information about its operations and methodologies, finances, internal and external communications, and complaints or allegations about its work from January 1, 2019 to the present.
In the 21-page letter, the government also demands details about the organization's relationships with 13 other "entities that purport to track, categorize, evaluate, or rate news sources, outlets, websites, content, or other entities for 'misinformation,' 'hate speech,' 'false' or 'deceptive' content, or similar categories." According to the letter, these organizations include media rating firm NewsGuard, trade associations the World Federation of Advertisers and the Interactive Advertising Bureau, adtech vendors DoubleVerify and Integral Ad Science, as well as watchdog organizations Check My Ads Institute and the Center for Countering Digital Hate.
To ensure compliance with the CID, the FTC "requires a search of all documents in the possession, custody, or control" of the organization. The government demands that the requested information and answers be submitted by June 19.
"They're requesting pretty much anything pertinent to our business since we started," Ad Fontes Media CEO Vanessa Otero, who received a letter from the FTC, told ADWEEK, adding that the demands are "excessive" and "overzealous."
"Typically, for a subpoena or a discovery request in a civil trial, parties have to be actually charged with something or actually be sued in order to have to submit to these heavy demands that are very intrusive on your business,' she said. 'And that's not the case with a Civil Investigative Demand, because the DOJ, FTC, FCC, and some other agencies have very broad power to do pre-litigation investigation. It can be very onerous on companies…and it can be very discouraging to people's activities or their speech."
Ad Fontes Media said it will comply with the FTC's demands, Otero said.
Media Matters also received a CID, it confirmed, and is under active investigation by the FTC.
An FTC spokesperson declined to comment, noting that the agency's "communications with external parties are nonpublic."
The letter reviewed by ADWEEK was issued by the FTC's mergers division, prompting speculation that the CID letters may be part of a larger investigation concerning Omnicom's planned acquisition of IPG. In March, the FTC issued a second request for information concerning the proposed transaction.
Following the government's scrutiny into GARM last year, X-under the leadership of polarizing billionaire owner Elon Musk-sued the organization over similar allegations, accusing the group and its backer, the World Federation of Advertisers, of operating as gatekeepers that pressure brands into boycotts of sites like X under the guise of brand safety. GARM shuttered days after the lawsuit was launched.
Musk has also sued Media Matters. In his lawsuit, Musk alleges the group knowingly manipulated data to push a damaging narrative about X after it published research highlighting racist and antisemitic content on X. The organization snapped back with a lawsuit of its own in March.
"Businesses have rights to not advertise next to stuff they find crappy,' Otero told ADWEEK. 'And no one is colluding with anybody about this."