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Morning Wire
Inside the FTC’s Fight Against Censorship in Advertising
00:18:36
FTC Commissioner Andrew Ferguson joins Morning Wire to discuss a landmark agreement targeting alleged ad industry collusion, its impact on free speech and conservative media, and how the FTC plans to enforce antitrust laws in the digital age. Get the facts first with Morning Wire. - - - Today's Sponsor: Responsible Man - Visit https://responsibleman.com promo code WIRE for 50% off your first shipment. - - - Privacy Policy: https://www.dailywire.com/privacy
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- [00:02]
Ben Shapiro
Social media companies react to incentive structures, including threats. They have responded by adopting the standards of third party left wing informational safety groups like the Global alliance for Responsible Media, or garm. GARM purportedly sets brand safety standards, objective standards by which advertisers and platforms can supposedly determine just what sort of content ought to be deemed safe for advertising. In reality, GARM acts as a cartel. Its members account for 90% of ad spending in the United States, almost a trillion dollars. In other words, if you're not getting ad dollars from GAR members, it's nearly impossible. An ad based business.
- [00:34]
John Bickley
That was Daily Wire Editor Emeritus Ben Shapiro testifying in front of Congress explaining how the advertising industry has diverted spending away from conservative publishers, including the Daily Wire. But in a major development this week, two industry giants reached an agreement with the Federal Trade Commission to end the coordination against conservatives. In this episode, we Talk with the FTC's commissioner about the industry changing agreement. I'm Daily Wire Executive Editor John Bickley. It's Saturday, June 28th, and this is a weekend edition of Morning Wire.
- [01:07]
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- [01:58]
John Bickley
The following is an interview between Daily Wire Editor in Chief Brent Scher and FTC Commissioner Andrew Ferguson.
- [02:04]
Brent Scher
We're here with the chairman of the Federal Trade Commission, Andrew Ferguson. Andrew, thank you so much for joining us. I kind of want to start from the beginning here. When you took the position at the FTC back in January, what did you first see going on in the advertising industry that had you concerned when it comes to competition?
- [02:25]
Andrew Ferguson
Well, thanks for having me. This Actually goes back to before January. My principal concern with the advertising system is as an antitrust lawyer, but also as an American citizen. Citizen. And it just sort of is the way it works, that ideas will struggle in the marketplace if there aren't people to watch them. And people can't get their ideas out if they can't simultaneously make money off of the ideas. And I don't mean the profit motive is the motive for the ideas. I mean just the very simple fact that if you have dissenting views, it's hard to get those views out if you're also having to work other jobs in order to get those views out. And so it's important that people who have ideas be able to at least make money off of those ideas and off of presenting those ideas, especially if they're dissenting ideas. As conservatives, especially over the previous four years, before President Trump won the election in November, when we were all living under the yoke of Joe Biden, we were very much had the dissenting ideas on a whole host of issues. It's only been six months, and it feels like we're just winning all the time now. But for four years, even sort of basic questions like how many genders are there, we had a dissenting opinion on that. And one of the main ways, especially in sort of the digital age, that people make money while presenting ideas is that they allow the space next to them to be available for advertising. I mean, this is one of the main ways that conservative media can make a profit and keep their message on the air is that they make advertising space available. And so the ability to sort of participate in advertising markets is not only everyone's right in a free and open economy, it's a necessary ingredient to sort of keeping our free speech culture alive. And so I wrote back in November that this is potentially a real problem and that it should be part of an aggressive antitrust agenda is making sure that illegal conspiracies aren't being used in a way that hurts consumers, pocketbooks, hurts small and independent businesses like independent media, but also takes a, you know, deals a body blow to our free speech culture. So that was sort of the origin of this. It's, it's, it is sort of combining the traditional concern of antitrust, which is preventing competitors from colluding with each other, as well as just the importance of having lots of speech and ideas available for citizens to make informed choices in elections.
- [04:59]
Brent Scher
Yeah. So basically, you already had a ton of concerns about the ad industry. And then for those that don't know, typically in the ad industry. And tell me if I'm wrong here. There are six big companies, there are six major ad firms, and two of them wanted to merge Omnicom and ipg. So, given you already had concerns about competitiveness in the industry, I feel like they knew that this would be an issue when they wanted to get together.
- [05:27]
Andrew Ferguson
Yeah, I mean, look, in any industry, so the way that the advertising industry generally works is that you have lots of advertisers. Those are businesses that want to sell products and services, and then you have publishers, and those are people that have space to publish advertisements. But there are tens of millions of advertisers and tens of millions of publishers, and it can be hard for all of them to sort of get together in an efficient way. And so we have these advertising agencies that the advertisers hire to place their advertisements with publishers. And so they'll hire these ad agencies and be like, look, we want to spend this much money in this type of medium, this much money on this type of medium, go place our ads. And that gives the advertising agencies a lot of power, sort of as these important middlemen in deciding, you know, where these advertising spend is going to go. Because at the top, you've got these advertisers who are mostly making products and services, and they're like, look, we want consumers to know about it, we want them to buy our stuff. But it's a huge world out there. We're going to hire you experts to help us place that. Which means that there's a lot of outsourcing to these firms. And you're right, there are only six. It's a pretty concentrated industry. And so I think no matter sort of who had been running President Trump's ftc, they would have known this is probably going to attract some scrutiny. We're going from six firms in the market to five. Presumably, given that I had written about the potential problem of collusion in the ad industry, they probably suspected that the FTC under President Trump, with me as chairman, was going to take a pretty serious look at this.
- [06:57]
Brent Scher
So now these two firms, Omnicom and ipg, they want to get together. What exactly are they promising to mitigate these concerns?
- [07:07]
Andrew Ferguson
Yeah, I mean, they are promising that they are not going to collude with their competitors to dry up advertising dollars on the basis of the politics of the publisher. I mean, look, the reports that Congress produced last Congress identified this as a really potentially dangerous problem, which is advertising agencies, either amongst themselves or using third parties that they founded, like Garm at the World Federation of advertising were being used to set the rules that everyone would then obey. They were agreeing amongst themselves potentially to obey about who would get advertising dollars, what ideas it was permissible to advertise next to, et cetera. Look like, this is America, it's a free country. If one advertise to one ad agency and says, I don't want to advertise on these medium, okay, that's fine. The ad. The antitrust laws have nothing to say about it. But what, what this prohibits is that the ad agencies can't get together and be like, hey, we're all going to agree, right? Like, we're not going to spend advertising. We're all agreeing. Yeah, maybe we could make some extra money if we spent on this type of medium or on this podcast or whatever. But let's all agree we're not going to do that to make sure that, you know, that thing goes away or it suffers or whatever. They are now subject to an order that categorically prohibits this sort of collusion either amongst themselves or with third parties. And they are required to routinely report in with us, provide documents to us about whether they're complying. If we have concerns they aren't complying, we can go back to and be like, we need more information. And if we think they are complying, we can enforce the order. I mean, it's a, it's a really important step both to protecting consumers through the traditional enforcement of the antitrust laws. Admittedly, you know, this is not the type of thing that other administrations were thinking about when they were bringing the antitrust, when they were sort of enforcing antitrust laws. But that was sort of, in my view, kind of a failure of taking antitrust in all of its dimensions, caring about consumers in all their dimensions, caring about independent and small businesses. It's a very traditional antitrust theory which is just, you can't collude amongst competitors to dry up the ability of small and independent businesses to compete and hurt consumers. But the reason I think it is so important that the antitrust enforcers focus on this issue is you can't have a free society without the ability to exchange ideas. And if there's collusion among the advertising markets, it will become very difficult for dissenters like the Daily Wire and others to present their ideas to the public if they can't make many any money off of the space next to their podcasts or their blogs when they're presenting the ideas. And this makes sure that we have free markets operating in advertising which will promote effectively free people and the free Exchange of ideas.
- [09:50]
Brent Scher
Yeah, I mean, believe me, we're very intimately aware of the findings of the congressional report which found internal emails that showed that the Daily Wire was categorized by Garm as conspiracy theorists. Obviously a very public coordination was when Elon Musk bought X. All of these companies and advertising agencies seemed to collude to pull dollars away from the social media platform. So that's kind of the biggest thing thing to me that these companies are not only agreeing not to do this in the future, but they're also agreeing to cooperate with your active investigation into what was happening over the last, you know, at least four years and maybe before that. Can you talk a bit more about that?
- [10:37]
Andrew Ferguson
Yeah, I can't talk about specifically about ongoing law enforcement investigations, but what I can say is I have been really clear since before I became chairman that I think it is imperative for the antitrust agencies when they are allocating resources to protect consumers, but also to focus on antitrust violations that injure other important parts of our free market system and our ability to govern ourselves as a free people. And so one of the things these two companies have agreed is insofar as the FTC has ongoing law enforcement investigations about collusion and advertising, they're going to fully cooperate rather than throwing up obstacles like lawsuits to try to prevent the FTC from learning what went on, what was going on, what might be going on now, what could be happening in the future. And that's a super important concession because, you know, anyone who's ever had to do law enforcement in the government, criminal or civil, knows that just getting targets and investigations to turn over documents, even if the document requests are totally valid, valid and lawful, they can draw it out by refusing, resisting, declining to cooperate, they can require people to go to court. And even when the government's cause is entirely righteous, this just takes a lot of time and resources. So this is an important concession that they're just going to, you know, if the FTC has ongoing law enforcement investigations here, they're going to very willingly participate and tell us what was going on.
- [12:05]
Brent Scher
I just want to nail something down on that. Obviously the collusion happened to be against, you know, right of center conservative outlets like the Daily Wire. But that's not why this is happening. The reason you guys made this agreement and are investigating this, it's not because they were censoring outlets that, you know, you guys like. It's because this is actually them breaking the law.
- [12:28]
Andrew Ferguson
Yeah, that's right. I mean, that's an important point. And just to get back something you said earlier, certainly X brought a lawsuit accusing people of having participated in a boycott of advertising on expos. This isn't about X. This is about our antitrust laws. And this is about whether we have free markets and are going to govern ourselves as a free people where we all are allowed to exchange ideas without having to worry about losing our livelihoods. And it doesn't really matter whether the boycott is aimed at one idea or another, one party or another. The point here is the antitrust laws don't allow competitors to get together and agree to dry up advertising dollars in order either to drive up their own revenues or to hurt other potential competitors or hurt people in another part of the supply chain. And that has nothing to do with the identity of the people being hurt. It has nothing to do with the specific ideas being expressed. It has to do with the fact that we have made a decision as a free people in our antitrust laws that we aren't going to allow competitors to get together and damage people in other parts of the supply chain. We want competition. We want vigorous competition that makes all of our lives better in the marketplace as consumers. It makes all of our lives better as small business owners. It also makes all of our lives better as Americans who want to participate in civic society, because we'll have access to ideas and we won't have people in an advertising supply chain deciding which ideas will survive and which won't.
- [13:54]
Brent Scher
Okay, so looking ahead to the future, obviously Omnicom and IPG getting together, I believe this makes them the biggest ad agency in the world. But it was the big six, so that that means there are four other firms. This concession is just from Omnicom and ipg. What about the other four? Is there concern that they're just going to continue with business as usual, or is the hope that, you know, they see the writing on the wall of what happened here and realize there are actions they need to take to get on the right side of the law.
- [14:24]
Andrew Ferguson
It is certainly my hope that people will understand from this law enforcement action that the Commission took last week that we take this issue incredibly seriously and that it is a priority of the Trump Vance FTC to enforce the competition laws in the advertising markets, both because it's important to protect free advertising markets, but also because it's important to protect our status as free people that govern ourselves. And if there's collusion happening out there in any market, the FTC's got concerns about it, but particularly advertising markets. I think I'm hopeful, as I said in my statement, that everyone understands this is a top priority of the Trump Vance ftc, and we're going to take this very seriously going forward. And everyone is now very clearly on notice that that's our view.
- [15:13]
Brent Scher
Okay, my last question here is a lot of the enforcement mechanisms in this kind of are centered around the ftc. Its compliance reports to the ftc. It's the FTC flagging for ad agencies that they want to see more compliance from them. Is there anything being done that this lasts, you know, beyond your term at the ftc, that future administrations will continue to see this as a priority?
- [15:44]
Andrew Ferguson
So it is extremely rare for it happens. It definitely happens. But generally one administration doesn't come in and just reverse all of the orders of another administration. I think the most important thing we can do to make this last is a take enforcing the order we just entered into this week very seriously so that basically the markets adjust and they just say, look, collusion is too expensive now. Yeah, maybe it was helpful at one point, but now the government really cares about this. Let's just compete freely. We'll probably make more money competing freely anyway. On the Trump Vance administration, we're doing stuff to protect free speech, even if it's not the type of thing that we put through Congress and passes a law that was very hard to undo. If they know the government is onto them about potentially illegal conduct like this, they adjust and they just stop in it. And markets adjust and sort of move on on the basis of the new reality. And if the new reality is we take enforcing the antitrust laws in this context very seriously, I think that's likely to stick past the present administration. And, you know, I think the way that we make it stick is we just make it clear if you are breaking the antitrust laws in the advertising markets, you should expect a call from the ftc.
- [16:57]
Brent Scher
Yeah, it's a really interesting point you made there. Colluding against, you know, entire industries wasn't actually good for the ad industry.
- [17:06]
Andrew Ferguson
And you know, just one more thing on it changing over time. Because for us at the ftc, this isn't about protecting one political party or another. Liberal ideas benefit from this as much as conservative ideas. No one should be subject to illegal horizontal boycotts because of the ideas they're expressing. You shouldn't have to. Your. Your access to advertising markets should not depend on the content of your ideas, and especially when that decision is being made a level above you by competitors colluding to try to drive advertising ideas. So this principle, the application of the antitrust laws, the advertising markets works equally for both sides. And so I don't think a subsequent Democrat administration would have a strong incentive to say, yep, open season for censoring again, because that worm turns on either side just as easily. And so I think that this is sort of good for markets. It's good for everyone because the law here is neutral for politics. It just says you can't collude to hurt other people. And it doesn't matter if you're colluding to hurt Republicans or Democrats, conservatives or progressives, you can't do this sort of thing under the antitrust laws. And that's another reason I think this is likely to last beyond this administration is this is just good for everyone. It's good for markets. It's good for the country.
- [18:18]
Brent Scher
Yeah. It's certainly a welcome change. Well, Andrew Ferguson, thank you so much for joining us.
- [18:22]
Andrew Ferguson
It's really good to be here. Thank you.
- [18:24]
John Bickley
That was Daily Wire. You thank Editor in Chief Brent Sh speaking to FTC Commissioner Andrew Ferguson. And this has been a weekend edition of MORNING Wire.
- [18:36]
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