The First Amendment Protects Ideologically Based Ad Boycotts

By Walter Olson, CATO Institute

Elon Musk’s social media platform X / Twitter was in the news this week—and not in a good way—when its built-in AI chatbot, Grok, began launching into anti-Semitic rants, praising Adolf Hitler, and fantasizing about violence against an online liberal figure. (Coverage here, here, here, and here.)

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You might think one consequence of this blowup would be that many large companies would pull back from advertising on the X platform, whether permanently or temporarily, pending a persuasive showing that it was adopting rules that would reliably prevent a recurrence. That runs into a big obstacle, however, which is that X and Musk, together with allies in high government posts, have taken the position that for companies or ad agencies to decline to advertise with X on ideological grounds may legally violate its rights, especially if they coordinate with other entities in doing so.

It’s worth noting that many companies in search of a positive atmosphere for their brand have long chosen not to advertise alongside disturbing content, whether relating to car crashes or notoriously evil historical figures, for routine business reasons, rather than to register any particular disapproval. Publications have long accommodated such placement wishes. As I wrote two years ago in a post on ideological ad blacklisting, the Biden administration imperiled speech rights when it gave taxpayer money in grants to a nonprofit group that promoted ideological ad boycotts against conservative and libertarian outlets. But since truly voluntary participation by advertisers and agencies in such boycotts is likewise a matter of expressive speech, government is also imperiling speech rights when it does the opposite—when it uses money, jawboning, or outright coercion to discourage voluntary private participation in them.

That is what the Trump administration and its allies have been doing. Leading the way has been the Federal Trade Commission, which launched an investigation of whether ad agencies, advertisers, and nonprofit groups violated the law by banding together to develop voluntary lists of extreme or irresponsible media outlets. Recently, the Commission attached its own conditions to that effect as a condition of approving a merger between two sizable ad agencies, Omnicom and Interpublic. Among the many restrictions was that Omnicom could not even, by mutual consent, share one advertiser’s list of disapproved outlets with another and could not cooperate with various other entities to develop or share such lists.

FTC Chair Andrew Ferguson was pleased to recite that the “settlement does not limit either advertisers’ or marketing companies’ constitutionally protected right to free speech,” but that’s not so. Reason magazine spoke to Ari Cohn, tech policy lead counsel for the Foundation for Individual Rights and Expression, who said that, contra Ferguson, “prohibiting the carrying out or enactment of editorial discretion absolutely limits First Amendment activity.”

The FTC has sought to paint the boycotts and blacklists as antitrust violations; perhaps the least silly way of couching that idea is to say that advertisers are combining in restraint of trade to force Twitter to improve the quality of its product as an ad environment, which you might analogize to forcing it to lower its ad rates. Last August, law professors Vikram Amar and Ashutosh Bhagwat laid out in Justia why such antitrust theories would be unlikely to succeed in court. The usual format of an anticompetitive arrangement is to advance the financial interests of the collaborators by reducing competition between them, but here the element of financial gain is attenuated almost to nothingness. Meanwhile, the decision to advertise, rejection of a platform for ideological reasons, and coordination on how to coordinate these speech decisions are all forms of expression on matters of public concern.

A few cases to reach the higher courts have mingled elements of anticompetitive conduct with First Amendment expression, and in those cases, the courts have been extremely protective of the right to boycott for ideological reasons, even when some effects were anti-competitive, most notably in the 1982 Supreme Court case of NAACP v. Claiborne Hardware. Moreover, while the boycotters in the NAACP case were seeking to restrain trade in paint, groceries, and other household goods in a small town, the boycotters in the case at hand are specifically deciding how to spend money on speech itself. Law professor Justin Levitt, writing separately, suggests the FTC’s positions are hard to square with the First Amendment unless you resort to the theory that ad agencies have somehow turned themselves into common carriers.

Federal judges have already shut down, as violative of the First Amendment, investigations of Media Matters, the left-leaning private group that helped kick off interest in an advertiser boycott, by Texas Attorney General Ken Paxton and Missouri Attorney General Andrew Bailey. (I wrote about the Bailey initiative here.) Media Matters lately hired the law firms Covington & Burling and Susman Godfrey, both subjects of Trump revenge orders, to sue the FTC over its investigation (complaint). It’s a litigious area: X Corp. also sued Media Matters over its putative offenses, which included a demonstration (which X considers misleading) of how ads for a major corporation might have appeared last year in a timeline adjoining “pro-Nazi or other extremist content.” It all appears almost quaint after the events of last week, in which the odious content was generated not by fever-swamp X users but by X itself.

Dubious private litigation and its threat can also undercut speech liberties. As the New York Times reported, Musk also sued a boycott-organizing group of ad agencies, claiming anticompetitive behavior, which “soon shut down, saying it did not have enough cash to operate and fight the lawsuit. The group denied wrongdoing.” Reporting by the Wall Street Journal also suggests that X has used legal threats against individual advertisers, as summarized in a revealing Semafor report by Ben Smith. The WSJ report, per one summary, “said at least six companies struck ad deals after receiving lawsuit threats or pressure from X.”

The background here is one of steadily mounting pressure by the Trump administration and its allies to curtail freedom of expression among not just advertisers but press outlets and public figures generally. In a recent Dispatch article, Cato adjunct scholar Robert Corn-Revere marveled at how CBS News parent Paramount agreed to settle a Trump lawsuit over the editing of a Kamala Harris interview, given that it was “so baseless, so devoid of factual or legal support, and so diametrically opposed to basic First Amendment principles.” Paramount needed FCC permission for a merger, however, and FCC Chairman Brendan Carr had blocked that approval pending capitulation. “So it was pay-up or shut-up time.”

The examples of improper regulatory pressure against speech have multiplied almost past counting, including Carr’s investigation of San Francisco radio station KCBS for reporting the location of an ICE raid in progress and the models of the unmarked cars used—on the face of it, reporting subject to First Amendment protection. Trump himself has lately threatened to prosecute CNN for reporting on the existence of a phone app that allows users to alert one another to ICE activity and has floated the idea of criminally prosecuting the New York Times over its reporting on the effectiveness of his Iran strikes. (His personal lawyer has also threatened to sue the paper civilly on behalf of his client for defamation.)

There is little doubt in my mind that if it gets that far, the Supreme Court will uphold as well-established the First Amendment right to engage in ideological ad boycotts. The question is whether the administration will succeed in bulldozing this and other constitutional rights as a practical matter before they ever reach the point of being reconfirmed in principle by the high court.

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