The Federal Trade Commission is investigating whether advertisers and companies that claim to rate media fairness are illegally colluding to instigate advertiser boycotts to silence conservative media.
The FTC has sent broad inquiry letters to roughly a dozen companies, including Ad Fontes Media Group, which rates news outlets for media bias, and Media Matters for America, a left-wing outlet that serves mostly as a watchdog for conservative news.
Media Matters was sued by Elon Musk for allegedly coordinating an advertising boycott of his social media platform, X, which the company denies.
Individuals familiar with the nascent investigation say the FTC will examine whether the groups coordinated to illegally restrain trade and harm competitors in violation of the Sherman Act, the government’s main antitrust law.
A 21-page administrative subpoena known as a Civil Investigative Demand was sent to news rating company Ad Fontes and others. It compelled them to turn over detailed information about the company’s operations and relationships with other entities that rate the news. Those other companies include NewsGuard, the Center for Countering Digital Hate and Check My Ads Institute.
The Washington Times confirmed the content of the Civil Investigative Demand.
For years, conservative media outlets have complained that news rating companies, including NewsGuard, have improperly steered away advertising with rating systems that disfavor their content for arbitrary reasons.
Andrew Ferguson, chairman of the FTC, is serious about stopping coordinated efforts to squelch free speech, a person familiar with the probe said.
“He is trying to stop Big Tech bullies and censors. He is trying to stop this illegal restraint on trade from left-wing organizations and groups. He’s trying to get the media to compete within the law,” the person said.
Mr. Ferguson said recently that the FTC should investigate and “bust up” collusion that suppresses online competition and free speech.
He pointed to NewsGuard’s rating system, which dictates a news site’s trustworthiness and gives advertisers “inclusion” and “exclusion” lists.
“If a website gets a poor rating on NewsGuard’s ‘nutrition label,’ it can choke off the advertising dollars that are the lifeblood for many websites, including platforms on which millions of Americans every day speak their minds,” Mr. Ferguson wrote in a December memo.
A former FTC official who asked to speak anonymously said it will be “very, very difficult, if not impossible,” to prove illegal collusion by the media ratings companies.
Another source, one close to the investigation, said there is proof of coordinated meetings between media ratings groups and advertisers. The meetings were designed to bring companies together to collude against other competitors.
“It’s kind of shocking,” the source said.
Companies that rate media accuracy have rankled conservative outlets and caused their advertising to decline.
NewsGuard provides scores ranging from zero to 100 based on nine “apolitical journalistic criteria” that analyze credibility and transparency.
It rates left-leaning site Huffpost with a favorable 87.5% score, but gives the conservative Fox News website a score of 69.5%. NewsGuard awarded The Washington Times a grade of 62%. Nonpartisan C-SPAN.org received an 82.5%.
The company would not say whether it received an inquiry letter from the FTC.
NewsGuard General Manager Matt Skibinki told The Times, “We have no comment about letters that we’ve heard are going out.”
Media Matters countersued Mr. Musk and is seeking damages for the legal costs of defending their company from his lawsuit.
Mr. Musk sued the company after it posted articles claiming he was endorsing antisemitic conspiracy theories and “placing ads for Apple, Bravo, IBM, Oracle, and Xfinity next to pro-Nazi content.” The Media Matters posts caused advertisers to flee the social media platform, and X’s ad revenue significantly declined.
The FTC now wants to see whether Media Matters communicated with advertising groups and illegally coordinated to deprive certain media outlets of ad dollars.
The company denies wrongdoing.
“The Trump administration has been defined by naming right-wing media figures to key posts and abusing the power of the federal government to bully political opponents and silence critics,” Media Matters President Angelo Carusone told The Times in a statement. “It’s clear that’s exactly what’s happening here, given Media Matters’ history of holding those same figures to account. These threats won’t work; we remain steadfast to our mission.”
Vanessa Otero, the founder and CEO of Ad Fontes, said her company is committed to a nonpartisan approach to evaluating news sources, and her team of analysts represents a full spectrum of political viewpoints.
“No matter what possible claim the FTC is investigating, we are confident that Ad Fontes Media’s business activities are not only proper and lawful, but constitutionally protected,” she told The Times. “While we are dismayed to even receive such a broad and intrusive demand letter in the first place, we will of course comply with what is required under the law.”
