• by Wendy Davis , Yesterday

The Federal Trade Commission is urging an appellate court to lift an injunction blocking the agency's investigation of the watchdog Media Matters for America, which in late 2023 issued a report about neo-Nazi content on X, formerly Twitter.

In papers filed this week with the D.C. Circuit Court of Appeals, the FTC argued that its probe of Media Matters is part of a broad antitrust inquiry that focuses on whether the online ad industry conspired to deprive "disfavored" media of ad revenue.

"Chairman Ferguson and the FTC have expressed concern about, and taken action to prevent, potential anticompetitive collusion in the digital advertising industry to withhold advertising from certain disfavored media," the agency writes.

"This issue is a high priority for the Commission because such concerted action would likely violate the federal antitrust laws and harm the public," the commission adds. "Unlawful collusion could reduce competition in markets for advertising purchasing and other advertising-related products or services, which could in turn reduce consumer choice in content, degrade the quality of advertisements, and ultimately stifle debate on matters of public importance."

For its part, Media Matters has argued that the FTC did not explain why it believed Media Matters had information relating to advertisers' decisions. The group also argued that its report and advocacy were protected by the First Amendment.

"Even assuming advertisers did coordinate amongst themselves (and there is no public evidence of that), Media Matters simply engaged in constitutionally protected activity -- chronicling abhorrent content on X and calling on companies to withdraw their business," the group wrote in papers filed last year.

The FTC's appellate brief comes in a battle that began in June, when Media Matters sued to block the FTC from pursuing its "civil investigative demand" (comparable to a subpoena) for a trove of information -- including material regarding its finances and newsgathering, and documents relating to the Interactive Advertising Bureau, World Federation of Advertisers and its now defunct Global Alliance for Responsible Media, Check My Ads, the Center for Countering Digital Hate, Double Verify and NewsGuard, among other groups.

Media Matters alleged in its complaint that the FTC undertook the probe in retaliation for a November 2023 report that ads for Apple, Bravo, IBM, Oracle and other brands were being placed next to pro-Nazi posts on X. (X sued Media Matters over that report; Media Matters is fighting that lawsuit.)

The watchdog added that even though FTC Chair Andrew Ferguson said he was targeting "advertiser boycotts," he was actually focused on content moderation advocacy and "independent economic decisions made by advertisers who do not want their ads appearing next to extremist content."

Ferguson's probe came after two state attorneys general -- Ken Paxton of Texas and Andrew Bailey of Missouri -- attempted to investigate Media Matters.

The group also sued over those investigations, and U.S. District Court Judge Amit Mehta in Washington, D.C. blocked Paxton's probe, ruling that Media Matters was likely to show that Paxton was retaliating against the group for newsgathering activity that's protected by the First Amendment. That ruling was upheld by the D.C. Circuit Court of Appeals.

Mehta also blocked Bailey's investigation last year. Bailey initially appealed, but withdrew the appeal and abandoned his probe in February.

Given that history, U.S. District Court Judge Sparkle Sooknanan in Washington, D.C. ruled in August that Media Matters was likely to prove that the FTC's demand for information was issued with "retaliatory animus" and therefore unconstitutional.

"Speech on matters of public concern is the heartland of the First Amendment," Sooknanan wrote in an opinion granting Media Matters' request for an injunction.

"It should alarm all Americans when the government retaliates against individuals or organizations for engaging in constitutionally protected public debate," she added. "And that alarm should ring even louder when the government retaliates against those engaged in newsgathering and reporting."

The FTC then asked the circuit court to lift that injunction on an emergency basis, arguing it was causing "immediate and irreparable harm to the FTC’s ad boycott investigation."

A panel of the D.C. Circuit court rejected that request in October, but left open the possibility of lifting the injunction in the future.

The FTC this week reiterated its request to lift the injunction.

Among other arguments, the agency says that Media Matters' lawsuit was premature because the FTC hadn't attempted to enforce its subpoena.

The commission also argues that Media Matters failed to prove the probe was retaliatory, arguing that the organization didn't show how its 2023 report about neo-Nazi content on X caused the FTC to issue the subpoena.

The FTC writes that the investigation's broad scope -- involving subpoenas to 17 organizations, including trade associations and policy groups -- shows that the subpoena to Media Matters wasn't issued to retaliate for a specific article.

"Needless to say, the other entities that received a [subpoena] did not write that article," the FTC writes.

Media Matters is expected to file a response with the D.C. Circuit by February 17.