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The Federal Trade Commission (FTC) has subpoenaed documents from Media Matters, a liberal media watchdog, regarding potential collaboration with other media monitoring groups. The probe centers around allegations made by Elon Musk, accusing these groups of orchestrating advertising boycotts against X, formerly known as Twitter. The request for information, as seen by Reuters, signifies an intensification of scrutiny over coordinated efforts to influence advertising revenue on the social media platform.
FTC Investigates Media Matters Over X Boycott Allegations
The civil investigative demand (CID) specifically seeks details regarding Media Matters’ interactions with organizations that assess misinformation and hate speech across news and social media platforms. This includes correspondence with the Global Alliance for Responsible Media (GARM), an initiative by the World Federation of Advertisers (WFA). X has active lawsuits against both Media Matters and the World Federation of Advertisers.
Scope of the Investigation
This FTC inquiry marks a significant escalation in the U.S. government’s examination of whether advocacy groups such as Media Matters played a role in encouraging advertisers to withdraw their spending from X following Musk’s acquisition of the platform in 2022.
Key Aspects of the Demand:
- Requests all documents Media Matters has generated or received pertaining to the X lawsuit and related advertiser boycotts.
- Examines potential unlawful collusion among online platforms.
- Addresses concerns regarding advertiser boycotts that may stifle competition among these platforms.
Background and Related Actions
FTC Commissioner Andrew Ferguson initially suggested the possibility of an investigation in December. The House Judiciary Committee, previously led by Republican Representative Jim Jordan, alleged that GARM coordinated an unlawful group boycott, leading to the initiative’s disbandment in August.
Neither the FTC, Media Matters, nor the World Federation of Advertisers have released official statements regarding the inquiry.
Legal Battles and Financial Impacts
Advertising expenditures on X are projected to rise in 2025, marking the first increase since Musk’s takeover in 2022, according to Emarketer. However, these figures are still below pre-acquisition levels.
Last year, X initiated legal action in a Texas federal court against the World Federation of Advertisers and several major brands, alleging an illegal conspiracy to reduce advertising investments. The defendants have sought dismissal of the case, arguing that their decision to shift to alternative platforms was based on concerns about X’s brand safety standards.
Ongoing Litigation
Media Matters and X are currently engaged in separate legal proceedings in Texas and California.
- X initiated a lawsuit against Media Matters in 2023, accusing the organization of defamation. The lawsuit stemmed from an article suggesting that advertisements for prominent brands appeared alongside extremist content on X.
- Media Matters has refuted these claims and has countersued X, alleging abusive and baseless litigation as retaliation for its reporting on advertising practices on X post-Musk acquisition.
Media Matters has stated that defending against X’s legal claims has cost the organization millions of dollars.