TEXAS — The Federal Trade Commission and eight states filed a lawsuit against advertising firms Dentsu, Publicis, and WPP in U.S. District Court for the Northern District of Texas and simultaneously announced settlements with all three companies. U.S. District Judge Mark Pittman approved the settlements the same day they were filed.

The complaint alleges a conspiracy of various interested parties to demonetize disfavored conservative news and opinion sites by denying them digital advertising revenue. Florida, Indiana, Iowa, Montana, Nebraska, Texas, Utah, and West Virginia joined the lawsuit.

"This unlawful collusion not only damaged our marketplace, but also distorted the marketplace of ideas by discriminating against speech and ideas that fell below the unlawfully agreed-upon floor," FTC Chairman Andrew Ferguson said. "The proposed order remedies the dangers inherent to collusive practices and restores competition to the digital news ecosystem," he added.

The settlements bar the ad firms from making agreements with third parties to refuse placement of ads based on what the order calls Covered Bases, defined as political or ideological viewpoints (including viewpoints on news veracity), adherence to third-party journalistic standards or ethics, or commitment to diversity, equity, or inclusion, excluding fraudulent content. The settlements also prohibit using third-party individuals or entities to rate, rank, or evaluate media publishers according to Covered Bases. Ad companies can still avoid advertising on certain platforms if third parties are not involved by making agreements with clients on how to direct their advertising spending. The ad firms did not admit the allegations in the complaint when agreeing to the settlements.

Last year, the FTC imposed merger conditions prohibiting advertising boycotts in its approval of Omnicom's $13.5 billion acquisition of Interpublic. The settlements with Dentsu, Publicis, and WPP impose similar requirements.

According to the FTC's press release, starting in 2018, the three firms colluded to impose common brand safety standards across the digital advertising industry. The commission said the ad agencies, together with Omnicom and Interpublic Group, operated through trade associations to establish a common Brand Safety Floor to target misinformation, and that firms like NewsGuard and the Global Disinformation Index used the misinformation designation to promote the demonetization of disfavored political viewpoints. The commission also said that the Global Alliance for Responsible Media, a World Federation of Advertisers project, set a Brand Safety Floor standard on misinformation to ensure that advertising revenue would be denied to the conservative website Breitbart, and that the American Association of Advertising Agencies' Advertiser Protection Bureau imposed a similar standard. Conservative publishers identified as publishing what the Brand Safety Floor defined as misinformation suffered dramatic declines in their sales of digital advertising inventory, according to the commission.

The Global Alliance for Responsible Media was shut down nearly two years ago after a lawsuit filed by X. The FTC's lawsuit also complained that Media Matters for America, a nonprofit journalism organization that published an article in 2023 showing that X placed ads next to pro-Nazi posts, pressured advertisers to remove ads from Fox News and X. A judge ruled that the X boycott was legal, resulting in Elon Musk losing a lawsuit against advertisers. In another case, a judge blocked an FTC investigation into Media Matters for America, finding that the commission retaliated against the organization after it engaged in First Amendment activity by publishing an online article criticizing Musk and X.