Trump's FTC might implement a merger requirement that prohibits boycotts of advertisements.

 Trump's FTC might implement a merger requirement that prohibits boycotts of advertisements.

In a move that would help President Trump's Truth Social platform and Elon Musk's X social network, the Federal Trade Commission is allegedly proposing a merger condition that would prohibit advertising firms from boycotting platforms because of their political content.

Yesterday, The New York Times reported that a "proposed consent decree would prevent the merged company from boycotting platforms because of their political content by refusing to place their clients' advertisements on them, according to two people briefed on the matter." The FTC is currently reviewing a proposed merger between Omnicom Group and Interpublic Group, two major ad agencies.

The FTC has apparently taken a number of actions to deter ad boycotts, including this one, which has infuriated conservatives. Due to President Trump's dismissal of both Democrats, who claim in a lawsuit that the dismissals were unlawful, the FTC currently only has Republican commissioners. Additionally, Trump asserted broad executive authority over the FTC and other organizations established to function separately from the White House.
As part of an investigation into whether advertising and advocacy groups violated antitrust laws by coordinating boycotts of certain sites, including Elon Musk's X," the Wall Street Journal said, the FTC sent civil investigative demands to Omnicom, Interpublic, and a number of other major ad agencies on Monday.


The Federal Trade Commission "demanded documents from Media Matters about possible coordination with other media watchdogs accused by Elon Musk of helping orchestrate advertiser boycotts of X," according to a report by Reuters on May 22. X is currently facing legal action against Media Matters, the World Federation of Advertisers (WFA), and a number of major corporations. Although Musk's firm allegedly threatened to sue some corporations to get them to buy ads, law academics have stated that advertisers have a solid defense under the First Amendment.

Ad boycotts pose a "serious risk," according to the FTC chair.

Twitter lost advertisers following Musk's acquisition of the social media platform for a number of reasons, including modifications to content filtering and an instance where Musk responded positively to an antisemitic message before telling worried advertisers to "go fuck yourself.
The risk of an advertiser boycott is a pretty serious risk to the free exchange of ideas," FTC Chairman Andrew Ferguson stated during a conference in April.
There is a form of concerted refusal to deal if advertisers get together in a private room and decide, 'We aren't going to put our stuff next to this guy or woman or his or her ideas,'" Ferguson said. "Collaborative refusals to deal are prohibited by antitrust legislation. Of fact, we do not have a clear antitrust ban on boycotts because of the First Amendment. The courts haven't been very explicit about when a boycott becomes entirely First Amendment action and stops being economic for the purposes of the antitrust laws—[it's] kind of a 'we know it when we see it' kind of thing.

According to the FTC website, a company may "refuse to do business with another firm, but an agreement among competitors not to do business with targeted individuals or businesses may be an illegal boycott, especially if the group of competitors working together has market power." The examples provided on the FTC website mostly deal with price competition and do not address the common practice of businesses basing their advertising placement decisions on brand considerations.

We spoke with the FTC today on the merger review, and we'll update this post if they have any feedback.

The lawsuit for X's advertisement.

In X's case, Omnicom and Interpublic were involved in the now-defunct Global Alliance for Responsible Media (GARM), a World Federation of Advertisers effort. The GARM effort, of which X was a part, was shut down following X's complaint. The defendants, according to X, plotted "to collectively withhold billions of dollars in advertising revenue."

GARM was established "to bring clarity and transparency to disparate definitions and understandings in advertising and brand safety in the context of social media," according to a court filing last month by the World Federation of Advertisers. For instance, some advertisers objected to platforms promoting their brands next to content that would harm those businesses.

Defining what constitutes "violent" or "obscene" content was the aim of GARM as "these categories are imprecise and exceedingly subjective.... GARM aimed to clear up this misunderstanding and establish a clear, brand-safety framework that was unencumbered by the nuances of what, say, advertising meant when they used the word "violence." "To put it briefly, GARM established a common 'language' that the industry in question could utilize," the document stated.

The nonprofit organization World Federation of Advertisers, based in Belgium, is attempting to have X's complaint dismissed on the grounds that the US District Court for the Northern District of Texas is not the appropriate venue.

Musk's influence over the merger was questioned by Democrats.

Democrats in the Senate are worried that Musk would use his special government employee status to prevent the Omnicom/Interpublic merger unless advertisers increase their spending on X.

In March, five Senate Democrats wrote to Ferguson, "There have been reports that Interpublic received a call from an attorney at X threatening that there would be consequences if Interpublic did not get its clients to spend more on ads on Musk's social media platform." According to this source, Linda Yaccarino, the CEO of X, issued similar cautions when speaking with advertising firm leaders. According to reports, Interpublic has taken these messages to suggest that Musk will use his clout with President Trump to delay or prevent Interpublic's $13 billion merger with rival advertising company Omnicom Group.

X might "be attempting to strike a quid-pro-quo deal, pressuring Interpublic to get its clients to spend a certain amount on advertising on X in exchange for directing President Trump to use his antitrust enforcement agencies to allow Interpublic's merger with Omnicom to proceed," the letter stated. Attorney General Pam Bondi received a similar letter from the Democrats. In late May, Musk's tenure as a Trump administration special employee came to an end.

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