FTC Takes Action to Restore Competition in the Digital Advertising Ecosystem

The Federal Trade Commission, along with a coalition of states, took decisive action today to stop collusion between the nation's largest advertising agencies that distorted America's modern public square.

Starting in 2018, major U.S. advertising agencies WPP, Publicis and Dentsu-who buy digital ad inventory on behalf of advertisers-unlawfully colluded to impose common "brand safety" standards across the digital advertising industry, according to the FTC's complaint. The ad agencies, together with their primary competitors Omnicom and IPG, operated through trade associations to establish a common "Brand Safety Floor" to target "misinformation."

The complaint alleges firms like NewsGuard and the Global Disinformation Index used this misinformation designation as a means to promote the demonetization of disfavored political viewpoints. In a competitive market, ad agencies compete for advertisers' business by offering brand-safety tools that provide the best quality at the lowest cost. The brand safety agreement displaced competition by insulating the ad agencies from these competitive conditions, according to the complaint.

To resolve the FTC's charges, the ad agencies have agreed to a proposed order that will stop the alleged coordinated conduct and prevent similar conduct from occurring in the future.

"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.

"As we explain in our complaint, the brand-safety agreement limited competition in the market for ad-buying services and deprived advertisers of the benefits of differentiated brand-safety standards that could be tailored to their unique advertising inventory," he continued. "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.

If approved by a federal judge, the order will ensure that each of the biggest U.S. advertising agencies are prevented from engaging in agreements that would set common brand safety standards or restrict advertising based on biased and politically motivated criteria.

Omnicom and IPG are subject to a similar FTC order.

The Commission vote to issue the complaint and final order was 1-0-1, with Commissioner Meador recused. The FTC's complaint and final order were filed in the U.S. District Court for the Northern District of Texas. Joining the complaint are Florida, Indiana, Iowa, Montana, Nebraska, Texas, Utah and West Virginia.

NOTE: The Commission authorizes the filing of a complaint when it has "reason to believe" that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Consent decrees have the force of law when approved and signed by the District Court judge.