• by Wendy Davis , Yesterday

News ratings service NewsGuard on Tuesday argued to appellate judges that it is entitled to an injunction prohibiting the Federal Trade Commission from enforcing a condition of the Omnicom-Interpublic merger that restricts it from contracting with Newsguard.

That restriction -- which was agreed to by Omnicom -- violates the First Amendment and causes "irreparable injury" to NewsGuard, attorney Robert Corn-Revere argued to District of Columbia Circuit Court Judges Sri Srinivasan, Patricia Millett and Bradley Garcia.

"The government has no legitimate role in trying to assess what is the right balance in private expression, and then to seek to unbias what it believes to be biased," Corn-Revere told the judges. "In our system, the First Amendment restrains governmental actors and protects private ones. But the FTC gets both of these very basic concepts backwards in this case and sets out to police the marketplace of ideas."

The argument came in a legal battle dating to February, when NewsGuard, which rates sites for reliability, alleged in a complaint filed in Washington, D.C. federal court that the merger order is unconstitutional.

When the FTC approved the merger it specifically prohibited Omnicom from directing ad buys based on media companies' "adherence to journalistic standards or ethics established or set by a third party," except at the request of a client. (The FTC later imposed nearly identical conditions in consent decrees with other major ad agency holding companies.)

Before the merger, Interpublic was one of NewsGuard's clients, but that contract was not renewed in April after the merger was approved.

FTC Chair Andrew Ferguson, a Republican, framed the Omnicom-Interpublic merger conditions as preventing "censorship," stating that the ad industry "has been plagued by deliberate, coordinated efforts to steer ad revenue away from certain news organizations, media outlets, and social media networks."

Ferguson also made clear he viewed NewsGuard as too liberal. For instance, he stated in 2024 that NewsGuard “seems to give a free pass" to major left-leaning outlets.

He also tweeted in November 2024 that NewsGuard “led collusive ad-boycotts ... to censor the speech of conservative and independent media in the United States.”

NewsGuard says its ratings are not politically motivated. The company noted in its court papers that it has given "many major left-learning outlets" lower scores than right-leaning ones.

Earlier this year, U.S. District Court Judge Dabney Friedrich rejected NewsGuard's request for a preliminary injunction on the grounds that the company failed to show it would suffer "irreparable injury" without one. Judges are only supposed to issue a preliminary injunction -- meaning an injunction before there's been a trial on the merits -- if the company requesting the injunction will be irreparably injured without one.

"NewsGuard's alleged loss of existing and future contracts does not satisfy its irreparable harm burden," Friedrich said at a hearing in April. "NewsGuard has not explained why these business harms are irreparable or why it could not reinitiate these contracts should the court ultimately hold ... the merger condition unlawful."

NewsGuard is now asking the appellate court to reverse that ruling.

"The prohibition on the ability to have subscribers in this area of journalistic evaluation is itself irreparable harm," Corn-Revere told the judges Tuesday. "It is a ban going forward -- you cannot get subscribers, and the ones that you have lost, you cannot get back."

FTC lawyer Alex Potapov disputed that NewsGuard was suffering irreparable harm. He told the judges he was "not aware" of any court rulings saying that "simply because one is a publisher, any monetary harm becomes irreparable."

Millett, who appeared especially skeptical of the FTC's argument, asked Potapov: "Why isn't being blacklisted from probably the most significant portion of the audience to which you are appealing itself irreparable harm?" 

She also called the FTC's consent decrees with the ad agency holding companies a "very strange collection of orders," adding that they prevent NewsGuard from reaching an audience for its service.

Millett also specifically questioned Potapov about language in Omnicom's consent decree that restricts it from entering into any "agreement, understanding, rule or practice" with companies including NewsGuard.

"What does 'practice' mean?" she asked.

"I'm not sure that I could give an exact definition of practice," Potapov answered.

"This is your consent decree." she responded. "The FTC doesn't know the scope of its prohibition here?"

Potapov said the meaning of "practice" might have "to be assessed on a case-by-case basis," which drew the following response from Millett: "I'm sorry -- the FTC's going to decide case-by-case what this contract means? What this prohibition on speech means?"

The judges reserved decision.