The FTC has launched a probe into Media Matters for allegedly orchestrating illegal advertiser boycotts against Elon Musk’s social platform X, marking a significant escalation in the ongoing battle between the conservative billionaire and the liberal watchdog organization.
Key Takeaways
- The Federal Trade Commission is investigating Media Matters for potential illegal collusion with advertisers to boycott Elon Musk’s X platform
- The FTC has requested Media Matters’ budgets, documents, and communications with other watchdog groups regarding online content and advertisers
- Major companies, including IBM, Apple, and Disney, withdrew from X after Media Matters reported that their ads appeared next to antisemitic content
- Musk’s lawsuit against Media Matters for alleged defamation is proceeding in Texas, with additional investigations by state attorneys general
- The probe is widely seen as part of the Trump administration’s broader actions against left-leaning organizations
FTC Demands Documents from Media Matters
The Federal Trade Commission has intensified its scrutiny of Media Matters for America, demanding extensive documentation related to the liberal watchdog group’s activities concerning Elon Musk’s social media platform X. The investigation centers on allegations that Media Matters illegally colluded with advertisers to orchestrate boycotts against the platform formerly known as Twitter. According to sources familiar with the probe, the FTC has sent a civil investigative demand letter requesting budgets, internal documents on the impact of harmful online content on advertisers, and communications with other watchdog organizations.
This investigation represents a significant escalation in the ongoing conflict between Musk and Media Matters, which began when the watchdog group published reports showing advertisements from major companies appearing alongside extremist content on X. The FTC’s focus appears particularly centered on Media Matters’ communications with other organizations that assess misinformation and hate speech online, including the now-defunct Global Alliance for Responsible Media, which shut down in August after accusations from the House judiciary committee of coordinating an illegal boycott.
“The Federal Trade Commission on Wednesday opened an investigation into Media Matters, a liberal advocacy organization that has published research on hateful and antisemitic content on X, according to two people familiar with the inquiry.”
Musk’s Legal Battle Against Media Matters Gains Traction
Elon Musk’s lawsuit against Media Matters continues to advance through the legal system after a Texas judge allowed the case to proceed. The lawsuit alleges that Media Matters “completely misrepresented the real user experience” on X and manipulated the platform’s algorithms to deliberately place “racist, incendiary content” next to advertisements from major companies. Attorneys representing X have characterized Media Matters’ actions as “intentionally deceptive” and designed to damage the platform’s relationship with advertisers and harm its revenue streams.
The legal confrontation was triggered after major corporations, including IBM, Apple, Disney, Lionsgate, and Paramount, withdrew their advertising from X following Media Matters’ report that their ads were appearing alongside antisemitic content. The exodus of advertisers reportedly cost X millions in revenue and precipitated Musk’s aggressive legal response. Beyond the federal case, Texas Attorney General Ken Paxton and Missouri Attorney General Andrew Bailey have opened separate investigations into Media Matters for potential fraudulent activity and unlawful business practices in their respective states.
“Completely misrepresented the real user experience,” said Musk.
Broader Political Implications of the Investigation
The FTC’s investigation is widely perceived as aligned with President Trump’s broader agenda targeting organizations associated with the political left. Critics of the probe suggest it represents a form of government intimidation against media watchdogs, while supporters maintain it addresses genuine concerns about potential anticompetitive practices in digital advertising markets. Media Matters President Angelo Carusone has publicly characterized the investigation as an intimidation tactic, reflecting the increasingly polarized interpretations of regulatory actions in the current political climate.
Despite the legal challenges and investigations, X’s advertising business appears to be recovering. Industry projections indicate that advertising spending on the platform is expected to rise in 2025, though revenues remain below pre-Musk acquisition levels. Meanwhile, X has expanded its legal offensive beyond Media Matters, filing lawsuits against the World Federation of Advertisers and several major brands, alleging an illegal conspiracy to reduce advertising expenditures on the platform. These concurrent legal battles highlight the increasingly contentious relationship between social media platforms, advertisers, and the organizations that monitor online content.
“Angelo Carusone, the president of Media Matters, suggested that the investigation was an effort to intimidate his group,” said Angelo Carusone.
Financial and Reputational Stakes
The financial implications of this ongoing dispute are substantial for both parties. Media Matters claims that defending against X’s lawsuits has imposed significant financial burdens on the organization, potentially constraining its operational capacity. For X, the advertiser exodus triggered by Media Matters’ reporting allegedly resulted in substantial revenue losses at a critical time when Musk was attempting to stabilize the platform’s business model following his $44 billion acquisition. The investigation also raises important questions about the boundaries between legitimate media criticism, coordinated economic action, and potentially anticompetitive behavior.
“Racist, incendiary content,” said Musk.
As the investigation proceeds, both Media Matters and X continue their concurrent legal battles in multiple jurisdictions. In addition to the Texas lawsuit filed by X against Media Matters, the organizations are engaged in litigation in California, where Media Matters has counter-sued X for alleged abusive litigation practices. Legal experts note that the FTC’s civil investigative demand does not necessarily imply wrongdoing, and many such investigations conclude without formal enforcement actions. However, the high-profile nature of this case and its political implications suggest that its resolution will have lasting consequences for content moderation, advertiser relationships, and regulatory oversight of social media platforms.
