An FTC investigative demand against Media Matters, enjoined as retaliation

The FTC agreed in writing never to issue a substantially similar demand to Media Matters and confirmed the organization is not the target of any investigation. The commission also withdrew parallel demands to NewsGuard and the Global Disinformation Index. No court reached the merits on appeal, because the agency abandoned the demand before the D.C. Circuit ruled.

In 2023 Media Matters published research showing advertisements for major brands appearing beside extremist content on X. Advertisers left, and Musk promised what he called a thermonuclear lawsuit, suing in Texas and, through subsidiaries, in Ireland and Singapore; a California federal court enjoined that litigation campaign. Republican attorneys general in Texas and Missouri issued civil investigative demands, and federal courts in Washington enjoined both as likely First Amendment retaliation. On May 20, 2025 the FTC, whose chairman had announced an investigation into advertiser boycotts, issued its own demand seeking records of Media Matters' newsgathering, editorial decisions, finances, and communications with a long list of research and advocacy groups.

Media Matters sued on June 23, 2025. On August 15, Judge Sparkle Sooknanan granted a preliminary injunction. She rejected the FTC's argument that no court could review the demand until the agency sought to enforce it, found Media Matters likely to show that retaliatory animus was the but-for cause of the demand, and wrote that the case presented a straightforward First Amendment violation. It should alarm all Americans, she wrote, when the government retaliates against those engaged in newsgathering and reporting. She barred the FTC from implementing or enforcing the demand.

The FTC appealed and sought an emergency stay. A D.C. Circuit motions panel refused, 2-1; Judge Justin Walker dissented, arguing that Media Matters was not likely to succeed on the merits, while not questioning the district court's jurisdiction to reach them. The merits were argued on April 13, 2026. Three days later the FTC withdrew the demand, telling the court that a settlement with three advertising holding companies had resolved the issues. Media Matters initially opposed dismissal of the appeal, arguing the agency was avoiding an adverse ruling. Both sides agreed to dismiss on May 1, and the case ended on May 4, 2026 with a written commitment from the FTC never to issue a substantially similar demand. Americans for Prosperity Foundation, which had filed in support, called the outcome a win for the First Amendment and the rule of law.

Documented; a district-court opinion, a divided D.C. Circuit stay ruling, and a written settlement

D.D.C. preliminary injunction August 15, 2025; a D.C. Circuit motions panel upheld it 2-1, Judge Walker dissenting on the merits; the FTC withdrew the demand April 16, 2026, dismissed its appeal, and settled in May 2026 agreeing never to reissue a substantially similar demand

CID issued 2025-05-20; suit filed 2025-06-23; preliminary injunction 2025-08-15; CID withdrawn 2026-04-16; case dismissed 2026-05-04