Last week the Federal Trade Commission settled with three advertising agencies over their alleged collusion to exclude placement of ads with conservative-leaning news sites and social media, including Elon Musk‘s Twitter/X, via the now-defunct Global Alliance for Responsible Media (GARM).
I won’t go into the details of who the agencies are or the details of the settlement — you can read about it at Breitbart (another of the victims of the collusion scheme) or in the New York Times.
What we wish to highlight is that the FTC is holding accountable entities involved in the massive censorship regime during the Biden administration under the auspices of “misinformation” (or “disinformation“), which was prevalent during politically marginalizing events surrounding COVID, the George Floyd fallout, etc. From the FTC’s announcement about the settlement:
“The ad agencies’ brand-safety conspiracy turned competition in the market for ad-buying services on its head,” said Chairman Andrew N. Ferguson. “The antitrust laws guarantee participation in a market free from conduct, such as economic boycotts, that distort the fundamental competitive pressures that promote lower prices, higher quality products and increased innovation….
“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. The proposed order remedies the dangers inherent to collusive practices and restores competition to the digital news ecosystem.”
As the complaint alleges, the ad agencies operated through their trade associations—specifically, the World Federation of Advertisers’ Global Alliance for Responsible Media (“GARM”) and the American Association of Advertising Agencies’ Advertiser Protection Bureau (“APB”)—to establish their common brand-safety standards. Under the agencies’ brand-safety agreement, websites that included so-called “misinformation” were deemed to fall below the brand safety floor and thus risked becoming categorically ineligible for advertising revenue.
For additional context, the World Federation of Advertisers (WFA) — which birthed GARM and then almost immediately shuttered it when Musk sued them — consists not only of advertising agencies, but also dozens of multinational corporations representing brands that everyone knows. Besides the willingness of Big Tech (Alphabet/Google/YouTube, Meta/Facebook, Amazon, Microsoft/LinkedIn, etc.) to administer the Biden White House’s clampdown on speech rights, so also did many of those WFA member companies engage in the GARM initiative to exclude disfavored viewpoints, by refusing to spend advertising dollars on conservative media.
The FTC’s aggressiveness against those censoring firms stands in stark contrast to that of the Securities and Exchange Commission.
In January of last year, two days after Inauguration Day, the SEC’s Division of Corporation Finance — which until this year served as “referee” between corporations and investors regarding the propriety of shareholder proposals for consideration at annual meetings — ruled NLPC’s shareholder proposal against Disney out of order. Our proposal specifically addressed the exact same issue the FTC just bludgeoned advertisers over — illegal and collusive anticompetitive discrimination against conservative media and voices.
Disney was and is a member of WFA. NLPC’s proposal requested the following, based upon the company’s involvement with WFA/GARM:
Shareholders request the Audit Committee of the board of directors investigate anticompetitive and collusive censorship conduct by the Company, and the litigative, reputational and fiduciary risks attributable to that conduct, with the findings to be reported to shareholders by Dec. 31, 2025.
As noted above, the two-day-old Trump-era SEC determined our proposal was excludable by Disney because it meddled too much in the company’s “ordinary business.” That excuse is regularly cited under shareholder proposal guidelines as an acceptable reason not to consider a resolution at an annual meeting.
However, on the same day, the SEC ruled that another proposal, also grounded in the WFA/GARM censorship activities, was acceptable under the “ordinary business” rules and therefore should be heard at Disney’s annual meeting — and it was. That proposal, presented by our friends at Bowyer Research, asked for the following:
Shareholders request that the Board of Directors of The Walt Disney Company conduct an evaluation and issue a report within the next year, at reasonable cost and excluding proprietary information and confidential information, evaluating how it oversees risks related to discrimination against ad buyers and sellers based on their political or religious status or views.
Thus two shareholder proposals were submitted based on the exact same premise at the same company: WFA/GARM, the advertising association of which Disney was a willing and collaborative member (especially owning media companies itself, like ABC and ESPN), rejected ad placements on platforms like Musk-owned Twitter/X and Breitbart. The only difference between NLPC’s and Bowyer’s proposals was that NLPC’s was grounded in risky anticompetitive and collusive corporate conduct — which the FTC just punished — while Bowyer’s addressed religious and political discrimination from the GARM actions.
It’s not even arguable that NLPC’s proposal should have been considered at Disney’s meeting along with Bowyer’s. As a regulator, the SEC can’t say NLPC’s proposal related to WFA’s/GARM’s actions improperly intruded on “ordinary business,” but Bowyer’s didn’t. Further, in light of the FTC’s enforcement settlement, it’s easy to claim that NLPC’s proposal was more “material” to Disney in a fiduciary sense than Bowyer’s — all the more reason our proposal should have been voted upon by shareholders at the meeting last year.
Being “material” is something that SEC Chairman Paul Atkins and his fellow two Republican commissioners (there are no Democrats on the five-member panel) obsess over these days, as they continue to implement measures that stifle the voices of shareholders. What the FTC has elevated as a priority, the SEC has shown no interest in. Further, shareholders should expect no assistance from the Atkins-led SEC to be allowed to hold accountable the companies in which they have an ownership stake.
