Abstract

This article examines the growing movement among legislators and competition authorities to create antitrust exemptions for coordinated conduct among competitors when such coordination is said to advance broader public policy goals, including environmental sustainability and journalism preservation. Using examples from the United States and Europe, the article explores the tension between traditional antitrust principles—which have long condemned collusion and price fixing—and emerging public-interest approaches to antitrust.

Specifically, this article advances that these exemptions create significant legal and economic risks. In particular, the boundaries of permissible coordination are difficult to define and enforce, exemptions may generate unintended market distortions and rent-seeking behavior, and selectively permitting collusion risks undermining the coherence and legitimacy of antitrust law. The article concludes that special carve-outs are unnecessary because antitrust law already accommodates genuinely procompetitive cooperation under the existing rule of reason framework.

Read the full piece at SSRN.

There’s a popular argument that AI will do to human workers what tractors did to horses. Tractors could do what horses did. Horses became obsolete. AI can do what humans do. Therefore…

Plenty of major AI figures seem to agree. Elon Musk says AI will “replace all jobs.” Anthropic CEO Dario Amodei regularly warns about mass job loss, framing AI as “a general labor substitute.” OpenAI investors talk openly about AI replacing “80% of all jobs by 2030.” These are influential people, not random bloggers. Still, they are not necessarily a representative sample of the world’s most careful economists.

And the fear itself is hardly new. Economist Wassily Leontief—best known for developing input-output analysis, a way of mapping how industries depend on one another—raised similar concerns in the early 1980s. If AI really were a perfect substitute for human labor, the logic would be straightforward. Any cost advantage would eventually drive firms toward 100% AI labor. You do not need a long essay to prove that result.

The problem is that the phrase “AI will eventually be a perfect substitute” does almost all the analytical work. That assumption hides a great deal: differences across tasks, industries, and workers; the many margins along which firms adjust; and the messy heterogeneity that makes the real economy more than a toy model.

How substitutable is AI today? What would need to happen for that substitutability to rise meaningfully? What other conditions would also need to hold? Even the historical analogy—“tractors could do what horses did, therefore horses became obsolete”—compresses several distinct steps into one neat sentence. “AI can do what humans do, therefore humans become obsolete” hides even more.

So let’s unpack those steps.

(This post draws on a new working paper that walks through the math and economics in detail. Really, though, it is mostly basic accounting.)

Read the full piece here.

Catherine Sharkey’s “Punitive Damages as Societal Damages” addresses a tension that has been obvious for decades, but usually treated as an annoyance: punitive damages are justified in public-regarding terms—punishment, deterrence, and condemnation—yet delivered through private litigation and typically paid to a single plaintiff. The doctrinal rhetoric often tracks conduct broad in scope, such as systematic fraud, organizational bad faith, or product defects affecting many victims. The remedial structure, by contrast, remains stubbornly bilateral.

Sharkey treats that mismatch as a design problem, not a terminological one. Her proposal separates two functions long bundled together under the “punitive” label: (i) punishment, which she calls “anti-social penalties,” and (ii) compensation for social harms that ordinary compensatory damages do not reach, which she terms “societal damages.”

The point is not to deny punitive damages’ deterrent role. Rather, Sharkey argues that once we concede punitive awards often respond to harms beyond those suffered by the named plaintiff, courts should stop laundering that broader social objective through a plaintiff windfall.

Methodologically, the paper is both doctrinal and institutional. It reads constitutional punitive-damages doctrine as a constraint and then asks what remedial architectures—split recovery, compensation funds, or aggregation substitutes—might better align punitive damages with their asserted social function.

Read the full piece here.

Executive Summary

AI-enabled applications may reshape competitive dynamics and the core forms of digital intermediation on which digital markets depend. That prospect has significant implications for the regulatory regimes recently adopted to govern those markets. Because these instruments were designed without AI specifically in mind, they risk becoming outdated within a short time.

The Digital Markets Act (DMA) illustrates the problem. The regulation reflects a Big Tech-centered understanding of digital markets, focused on entrenched platform ecosystems, vertically integrated gatekeepers, and self-preferencing risks. Those concerns remain important: incumbent firms still control key inputs and access points, including cloud infrastructure, data, distribution channels, and core platform services.

But AI also complicates the DMA’s premises. Downstream AI markets have so far shown substantial dynamism, with new entrants attracting significant investment and developing services that may disrupt established positions. Assistive and agentic AI could also create new gateways through which users access information, goods, services, and content—without necessarily fitting within the DMA’s existing categories of core platform services or replicating the economic logic of traditional digital platforms.

As a result, only a few years after its enactment, the DMA’s role, rationale, and claimed future-proof character are already under scrutiny. The deployment of AI applications raises a basic question for policymakers: whether the DMA can adapt through interpretation and targeted adjustment, or whether its legislative framework must be reopened.

Against this backdrop, and in the context of the DMA’s first review, this paper argues that the rise of AI applications calls for reconsidering the regulation’s overall architecture. The challenge is not merely to fine-tune existing categories, but to develop a competition-policy framework capable of addressing AI-driven markets on their own terms—while avoiding premature ex ante intervention that could chill innovation before market structures have stabilized.

I.               Introduction

The rapid diffusion of artificial-intelligence technologies has brought considerable attention to their capacity to transform—and potentially disrupt—existing competitive dynamics. In this context, competition-policy debates increasingly ask whether existing tools can both preserve the conditions for innovation and address anticompetitive concerns arising from AI deployment.[1]

Similar debates have accompanied earlier technological revolutions. But the current debate differs in one important respect: it extends not only to competition law in its conventional form, but also to the newer regulatory regimes adopted to govern digital markets and ecosystems.

Those regimes rest on the premise that traditional antitrust enforcement, because of its ex post character, often moves too slowly for fast-moving and complex digital markets. By the time intervention occurs, market power may already have become entrenched and difficult to dislodge.[2]

The rapid emergence of AI, however, casts doubt on the future-proof character of these ex ante frameworks and, to some extent, on their underlying rationale. Because regulators designed these instruments without AI specifically in mind, they risk becoming outdated within a short time frame.

These concerns are especially acute with respect to assistive and agentic AI, which may reshape core digital-intermediation functions, including web browsing, online search, and e-commerce. Users increasingly rely on applications powered by large foundation models (FMs), which enable more natural interaction with digital environments, facilitate the retrieval and synthesis of information, support task automation and decision-making, and allow users to delegate bounded autonomous actions across interconnected platforms and services.

As a result, AI-enabled assistants and agents are emerging as a potentially significant locus of competitive power. They increasingly operate as full-fledged interfaces through which users access third-party goods, services, and content without leaving the conversational environment.[3] To the extent that these systems mediate user access to downstream markets, they are likely to assume growing importance in the competitive structure of the digital economy.[4]

This backdrop exposes a tension between the adaptive capacity of competition law and the rigidity of sector-specific regulation. Competition law may operate slowly, but it is structurally flexible. Its open-ended standards can accommodate shifting market realities over time. Bespoke regulatory regimes, by contrast, may deliver more immediate and targeted responses, but they are more vulnerable to technological change and regulatory obsolescence.

The European Union’s Digital Markets Act (DMA) illustrates this tension.[5] Despite its recent entry into force and still-nascent implementation, the regime already risks rapid aging because it was designed against the background of a digital environment that AI-driven intermediation may materially alter.

In the DMA’s first review, the European Commission launched a consultation to assess whether the regulation is adequately equipped to address the rollout of AI-powered services and whether the list of core platform services and related obligations may need adjustment.[6]

At the heart of the issue lies the respective market positions of new AI entrants. When existing gatekeepers incorporate AI-enabled functionalities into their ecosystems, those services may fall within the DMA’s scope. But the regulation does not extend to new AI operators, regardless of their market significance or growth potential, if standalone AI applications do not fit within one of the core platform-service categories enumerated in the DMA.

As a result, unless AI services can be subsumed within existing categories of core platform services—such as online search engines, web browsers, or virtual assistants—providers cannot be designated as gatekeepers solely on the basis of their AI offerings. The literature has therefore begun to divide over whether this regulatory gap can be bridged through an expansive interpretation of the existing framework or instead requires reopening the legislative process.[7]

The European Commission itself appears conscious of the DMA’s limits and of the comparative advantages of traditional antitrust enforcement. It recently stated that the “DMA will not be able to tackle every competition issue in the AI value chain” and that, for novel conduct falling outside the DMA’s obligations, competition-law enforcement must serve as a complementary tool.[8]

Against this background, this paper advances a different perspective: the emergence of agentic AI calls for reconsidering the DMA’s overall architecture, not merely fine-tuning its margins. The regulation was designed for a fundamentally different technological and economic environment, in which specific structural features informed the identification of both gatekeepers and core platform services. In particular, the DMA reflects a competition-policy paradigm shaped largely by a Big Tech-centered understanding of digital markets.[9]

But there is no reason to assume AI will replicate the developmental trajectory of earlier digital technologies. To the contrary, important differences separate established digital platforms from FMs.[10]

Traditional competitive concerns remain. They stem especially from constrained access to upstream inputs, including computing power, data, and highly skilled labor, as well as from the strong incentives large incumbent digital conglomerates have to integrate AI functionalities into their existing core products and services.[11]

At the same time, competition in downstream AI markets appears vibrant and intense. New entrants have proliferated, their services have achieved commercial success, and they have attracted unprecedented levels of investment. Many barriers to entry for AI developers therefore appear less significant than initially anticipated, while the diversity of downstream applications suggests that FMs are unlikely to produce uniform winner-takes-all outcomes across sectors.

The rapid expansion of AI services and the multiplicity of market participants instead point to a significant degree of dynamism and contestability. It therefore remains uncertain whether incumbent digital firms will be able to entrench or extend their market power in AI-related markets.

If AI systems do not exhibit the same technological and economic characteristics as established digital platforms—and if they can reshape market dynamics, unsettle established positions, and foster new business models and novel forms of ecosystem competition—they should not be treated merely as an extension of earlier digital technologies. The rise of AI may require not marginal adaptation of existing regulatory categories, but a distinct competition-policy framework capable of addressing the technological and economic logic of AI-driven markets.

The paper proceeds as follows. Section II sets out the economic and legal premises underlying the DMA’s enactment and explains how that background may support applying the regulation, in its current form, to AI markets. Section III examines the economic features of the AI value chain, with particular attention to its similarities to, and differences from, traditional digital markets. It also shows how certain distinctive technological and economic characteristics of AI systems, together with the emergence of assistive and agentic AI, depart from the DMA’s original framework. Section IV addresses the strategic policy choice facing the European Commission as it seeks to keep the DMA fit for purpose in the age of AI. Section V concludes.

II.             The DMA’s Regulatory Logic and the AI Challenge

AI has unsurprisingly taken center stage in the European Commission’s consultation on the effectiveness of the Digital Markets Act (DMA).[12] In the context of the regulation’s review, a substantial number of respondents raised concerns about AI and large language models (LLMs), noting their growing significance in digital markets.[13]

Before assessing whether the DMA is suited to address AI, it is useful to revisit the legal and economic context surrounding the regulation’s enactment, as well as the policy objectives that shaped it.

The DMA represents the first—and most significant—response to the broader international debate over whether existing antitrust rules and enforcement tools can address the rise of large technology platforms and effectively scrutinize their practices and business models. The regulation rests expressly on the premise that competition law, standing alone, cannot respond effectively to the challenges and systemic concerns posed by the platform economy.

On this view, antitrust rules have limited reach. They apply only to certain forms of market power, such as dominance in a relevant market, and to specific instances of anticompetitive conduct.[14] Their enforcement is also predominantly ex post, requiring extensive case-by-case investigation of often highly complex facts.[15] Competition law also does not—or at least does not adequately—address risks to the proper functioning of markets that stem from gatekeeper conduct falling short of dominance in the antitrust sense.[16]

For these reasons, lawmakers considered regulatory intervention necessary to complement traditional antitrust enforcement. The DMA therefore introduced a set of ex ante obligations for online platforms designated as gatekeepers, dispensing with the need to define relevant markets, establish dominance, and demonstrate anticompetitive effects.

The DMA identifies several economic characteristics that may allow the provision of a service to confer a gatekeeping position on its provider. These include extreme economies of scale, very strong network effects, multisidedness, lock-in effects, vertical integration, and limited multi-homing.[17] According to the regulation, these features have enabled a small number of large undertakings to emerge as gatekeepers: firms with considerable economic power and a significant impact on the internal market, often operating as vertically integrated actors that provide gateways through which business users reach end users across markets.[18]

This position allows such firms to leverage their advantages—including privileged access to data—from one area of activity into another. Some exercise control over entire platform ecosystems and are structurally difficult to challenge.[19] The combination of these market features may also generate significant bargaining-power imbalances, allowing gatekeepers to impose terms and conditions unilaterally to the detriment of both business users and end users.[20]

Gatekeepers may also occupy a dual role, acting both as intermediaries for third-party undertakings and as direct suppliers of products and services. In those circumstances, they may have both the ability and the incentive to favor their own offerings over those of rivals.[21]

Against this backdrop, the DMA establishes a catalogue of obligations that can be read as a condensed restatement of issues previously addressed in antitrust proceedings brought by European competition authorities.[22] Nearly every obligation can be linked to a specific practice adopted by a particular Big Tech firm and scrutinized by an antitrust authority.

Within this framework, many obligations seek to curb self-preferencing, a practice that has come to symbolize contemporary competition-policy concerns with online markets and is often portrayed as a pervasive feature of digital ecosystems.[23] On this view, self-preferencing enables Big Tech firms to consolidate their positions in core markets and extend them into neighboring markets, further strengthening the boundaries of their ecosystems.

This policy choice—centered on detailed and inherently backward-looking rules—appeared from the outset to sit uneasily with the complexity and rapid evolution of digital markets. To address that concern and preserve some measure of future-proofing, the regulation authorizes the Commission to revise the list of core platform services and relevant practices following a market investigation.[24]

Despite AI’s disruptive potential and the apparent success of new entrants, competition policy has so far remained primarily focused on the competitive risks associated with incumbent Big Tech firms. More specifically, policymakers worry that AI may consolidate the power of existing large digital ecosystems and drive markets toward concentration around a limited number of actors.[25]

That concern stems from the view that incumbent digital firms hold significant market power across several layers of the AI stack. This position may allow them both to insulate themselves from AI-driven disruption and to leverage preexisting positions into adjacent and nascent markets.[26] On this account, AI markets exhibit features comparable to those of traditional digital markets, including economies of scale and scope, network effects, data-feedback loops, and limited multi-homing. These characteristics may generate winner-takes-all or winner-takes-most dynamics, making such markets particularly prone to tipping in favor of a small number of dominant firms.[27]

Competition authorities have therefore directed growing scrutiny toward the strategies adopted by Big Tech firms, reflecting distrust of both partnership arrangements with emerging AI developers and the integration of AI solutions into core products and services.

On the one hand, such partnerships may produce procompetitive effects by giving new developers access to financial resources, distribution channels, and critical inputs—including specialized computing capacity—needed to accelerate innovation and support the development and deployment of AI systems.[28] But they may also neutralize or eliminate nascent competitive constraints.[29]

On the other hand, embedding generative AI (GenAI) solutions within the core products and services of large digital ecosystems raises self-preferencing concerns.[30] These concerns may arise through tying practices, when access to or use of products and services is conditioned on adopting the platform’s own AI solutions. They may also arise through preferential treatment, including pre-installation, exclusive integration, or reduced interoperability.

III.           Rethinking the AI Value Chain

This Big Tech-centric approach is consistent with the DMA’s assessment of competitive risks. But it offers only a partial account of the competitive landscape because it assumes that AI markets will replicate the developmental trajectory previously observed in digital markets.

To be clear, concerns about access to critical upstream inputs, as well as the presence of Big Tech firms across the AI value chain—particularly the vertical integration of some firms across the infrastructure, model, and application layers—cannot be dismissed.

The AI stack is not linear. It is a multilayered and interconnected ecosystem in which computational, infrastructural, and application-based components depend on one another.[31] At its foundation lies the hardware layer, consisting of large-scale clusters of graphics processing units (GPUs) and tensor processing units (TPUs), equipped with specialized accelerator chips capable of processing vast quantities of data and billions of parameters in parallel.

Closely linked to this is the layer of cloud and edge infrastructure and services, through which much of the development, training, fine-tuning, and deployment of advanced AI models takes place. These services allow firms to access computational capacity flexibly and scale investment according to operational needs.

The value chain also includes data centers, where AI-system requests are processed and which depend, in turn, on underlying communications networks and related services. At the core of generative AI (GenAI) are foundation models (FMs): large deep-learning models pre-trained to generate specific forms of content and capable of adaptation to a wide range of downstream tasks and uses.

These models are supported by model hubs and machine-learning tools, which perform essential functions such as hosting, curating, fine-tuning, and managing models, thereby facilitating the development of downstream applications. Additional relevant layers include electronic-communications networks and services, which enable data transmission and user interaction with AI systems, and applications that incorporate FMs either as general-purpose tools or in forms tailored to specific use cases.

In this context, the development of AI—and especially FMs and GenAI—depends on four essential building blocks: computing power, data, financial resources, and technical expertise.[32] Antitrust authorities are therefore concerned that control over these key inputs may confer substantial competitive advantages and, where access is exclusive or privileged, create significant barriers to entry.[33] In their view, ecosystem effects and vertical integration amplify these risks because firms active across multiple layers of the AI value chain may leverage market power from adjacent markets into AI-related activities.

Access to cloud infrastructure and distribution channels has emerged as a central competitive concern.[34] Cloud services, which are indispensable for the training, fine-tuning, and deployment of advanced AI models, remain highly concentrated in the hands of a small number of providers.[35] At the same time, large digital platforms increasingly integrate AI functionalities into their ecosystems. This may turn incumbent platforms into key gateways to end users, reducing third parties’ ability to offer competing or customized services, increasing switching costs, and creating opportunities for self-preferencing, foreclosure, and user lock-in.[36]

Access to data raises comparable concerns. Public datasets remain important for model development, but proprietary and first-party data—particularly user-interaction data—may prove decisive for contestability in AI markets.[37] Large technology firms are uniquely positioned to combine exclusive contractual arrangements with privileged access to vast quantities of data generated through their existing services. Network effects, economies of scale and scope, and feedback loops may reinforce these advantages, as AI-system use generates additional data that further improves model performance and entrenches incumbent positions.

Against this background, more alarmist perspectives find “barriers to entry everywhere” and predict that AI’s disruptive force will originate from within “the nest of existing tech ecosystems.”[38]

Yet the literature has pointed out that some technological and economic features of AI systems diverge sharply from those of traditional digital markets.[39] Network effects in FMs, in particular, appear substantially weaker than those typically observed in platform markets because individual users derive little direct benefit from the participation of additional users.

While data-feedback loops matter in both platform and FM markets, data are becoming increasingly abundant, and their relative strategic value appears to be declining. Significantly, antitrust authorities themselves have acknowledged that technological developments—including the growing use of smaller and more efficient datasets, as well as synthetic data—are reducing dependence on large volumes of proprietary data and computing power.[40]

Partnership agreements have also enabled new AI entrants to secure access to critical upstream inputs. In addition, the market valuation of AI services offered by new entrants has risen rapidly and consistently, as shown by their ability to secure substantial investment over successive funding rounds. Those investments reflect strong expectations about the long-term economic impact and commercial viability of these emerging firms.[41]

Moreover, concerns arising from Big Tech firms’ vertical integration are already being addressed through DMA enforcement. The interoperability measures imposed on Google rest on the premise that interoperability with key capabilities of Google Android is essential for third-party AI service providers to compete effectively with Alphabet’s own AI-enabled services, including Gemini.[42]

Finally, contrary to some assumptions, large technology companies have so far appeared largely unable to convert their extensive data advantages into decisive competitive superiority over AI startups. If incumbent gatekeepers had been able seamlessly to transfer their existing dominance into emerging AI markets, the rise of firms such as OpenAI and Anthropic would have been far less likely.

Many of the anticipated barriers to entry for AI developers therefore appear less significant than initially presumed, while the diversity of downstream applications suggests that FMs are unlikely to produce winner-takes-all dynamics across sectors. The rapid expansion of AI markets, together with the continued success of new entrants, casts doubt on the central assumptions informing current competition-policy debates. Taken together, these developments suggest that competitive pressures remain robust and that AI services retain substantial disruptive potential vis-à-vis established market positions.

At the downstream level, AI-enabled applications are transforming competitive dynamics and reconfiguring organizational processes across a wide range of business functions. AI assistants and AI agents are especially likely to alter core forms of digital intermediation, including web browsing, online search, and e-commerce.[43]

AI assistants generally operate as reactive, language-based systems that process user inputs and perform tasks such as content generation or question answering within the limits set by the prompt. Agentic systems, by contrast, exhibit greater autonomy and proactivity. They can independently initiate actions, interact with external software and online environments, and adapt their conduct over time to achieve predefined objectives.[44]

Rather than functioning merely as standalone chatbots, AI assistants and agentic systems are increasingly evolving into fully fledged platforms that allow users to access third-party services directly without leaving the conversational interface.[45] This development appears in the rise of AI-powered web browsers, such as OpenAI’s ChatGPT Atlas and Perplexity’s Comet, as well as in OpenAI’s introduction of “apps in ChatGPT,” which allow users to browse for and purchase products directly through ChatGPT, repositioning it as a digital shopping hub.[46]

These economic features of AI markets and the emergence of AI-enabled applications—developed primarily by new entrants—raise significant questions about whether the DMA’s current framework can address potential competition issues in AI.

If certain technological and economic characteristics of AI systems differ from those of traditional digital markets, competitive dynamics in AI may not replicate the developmental trajectory of earlier digital technologies. Those differences have direct implications for the identification of core platform services under the DMA, which in turn determines gatekeeper designation.

In other words, if AI services do not share the economic features of the core platform services currently listed in the DMA, revising or adapting the regulation cannot be accomplished simply by adding new services to the existing list. That conclusion inevitably affects gatekeeper designation, which remains closely tied to the characteristics of the relevant services.

The DMA is fundamentally animated by the goal of constraining vertically integrated firms that occupy a gatekeeping position and operate in a dual role. For that reason, a substantial share of its obligations targets the leveraging risks associated with self-preferencing. But that framework does not fit easily with the profile of new AI entrants.

Expectations regarding AI assistants and agents indicate that these applications may emerge as new gateways, distinct from those identified in the DMA. They may, indeed, place AI providers in a potential gatekeeping position without requiring vertical integration or preferential treatment.

This point is further borne out by the fact that, despite some vertical integration along the AI stack, most Big Tech firms do not appear to be serious competitors in the critical FM layer. Following the restructuring of its longstanding partnership with OpenAI, Microsoft has only recently begun developing proprietary in-house models.[47] Apple and Amazon, through their respective partnerships with Google and OpenAI, appear largely to have chosen to remain outside the FM market.[48] Meta, meanwhile, does not appear to have invested on a scale comparable to the most successful new AI entrants.

IV.          The Policy Choice: Adaptation, Extension, or Restraint

Given AI’s strategic importance in digital markets, the DMA’s first review has inevitably brought to the forefront whether the regulation is sufficiently future-proof and remains fit for purpose in the age of AI.[49] As part of that process, the European Commission has consulted stakeholders on whether the DMA is adequately equipped to address the deployment of FMs and AI-powered services, and whether adjustments to the regulatory framework may be necessary.

At its core, the debate over DMA reform turns on the role to be assigned to new AI entrants.

AI services may fall within the DMA’s scope through two main avenues. First, an AI provider may itself be subject to the regime if it offers a core platform service and satisfies the criteria for designation as a gatekeeper. Second, AI functionalities may be embedded within core platform services that have already been designated, in which case those functionalities are indirectly governed by the obligations imposed on the relevant service.

The latter scenario does not appear to raise novel difficulties for applying the DMA, in its current form, to AI markets. Competition concerns arising in this context—namely, gatekeepers’ structural advantages stemming from privileged access to cloud infrastructure and data, as well as the integration of AI assistants and agents into their core platform services—can be addressed through the regulation’s existing provisions.

A recent specification proceeding initiated by the European Commission against Google confirms this point.[50] In that proceeding, the Commission seeks to ensure, first, that Google affords third-party AI-service providers access to the same Android operating-system features and functionalities available to its own services; and second, that it grants third-party providers of online search engines, including AI-chatbot providers offering search functionalities, access on fair, reasonable, and nondiscriminatory (FRAND) terms to anonymized ranking, query, click, and view data. The Commission is also monitoring whether the integration of AI Overviews within Google Search complies with the DMA, particularly Article 6(5)’s prohibition on self-preferencing.[51]

By contrast, the DMA does not, as such, apply to new AI operators, regardless of their market position, if their standalone AI applications do not fall within any of the core platform-service categories enumerated in the regulation. The DMA allows the Commission to designate as gatekeepers undertakings that, although not yet enjoying an entrenched and durable position, are expected to attain such a position in the near future.[52] But even when foreseeable developments are considered, that assessment may be undertaken only with respect to services falling within the regulation’s category of core platform services.[53] Accordingly, unless AI services can be brought within one of the existing core platform-service categories, providers cannot be designated as gatekeepers solely by virtue of their AI offerings.

Questions about the proper legal status of AI services arise not only under the DMA, but also under other significant components of the European digital regulatory framework, such as the Digital Services Act (DSA).[54] GenAI applications may display platform-like characteristics, operate as intermediaries, and offer functionalities comparable to search engines, while still resisting classification within preexisting legal categories.[55]

In the DMA context, the High-Level Group has expressly acknowledged—when considering AI’s impact on the contestability and fairness of digital markets—that these technologies may both entrench existing gatekeepers and give rise to new ones.[56] Particular attention has focused on AI agents because they may emerge as new gateways, challenging the gatekeeping position of players that currently control the main access points, such as app stores, operating systems, search engines, and online marketplaces.

The literature has advanced two opposing approaches to preserving the DMA’s adaptability. Some scholars argue that policymakers should reopen the legislative framework by swiftly initiating a market investigation under Article 19 to determine whether new categories of AI-related core platform services should be introduced.[57] Others contend that the regulation, in its current form, can already address agentic AI because its wording permits AI applications to be brought within existing listed-service categories, most notably virtual assistants.[58]

As shown above, however, the rise of AI-enabled applications—and the potential transformation they may bring to competitive dynamics and the core organizational forms of digital intermediation—calls into question the DMA’s foundational premises. The regulation reflects a competition-policy paradigm shaped by a Big Tech-centered conception of digital markets. If AI systems do not exhibit the same technological and economic characteristics as established digital platforms, and if AI markets are unlikely to follow the developmental trajectory previously observed in digital markets, then DMA review calls not for mere fine-tuning, but for a distinct competition-policy framework.

At the same time, the DMA’s own logic supports its extension to new AI players. The regulation rests on the premise that conventional antitrust enforcement in digital markets may come too late—after market positions have become entrenched and difficult to challenge. That premise may also apply to AI technologies, given their potential to generate new gatekeepers.[59] Unless European policymakers are willing to repudiate the strategy that has characterized the Brussels approach to digital markets, they must consider activating the DMA as the principal body of law governing competitive dynamics in digital markets in the age of AI.

Still, the risks of premature regulatory intervention deserve careful attention. The AI sector remains at a comparatively early stage of development and has not yet reached a stable phase with respect to technological trajectories, business models, or market structures. In such circumstances, extending ex ante regulation to FMs and AI services by classifying them as core platform services may unduly inhibit innovation, restricting developers’ ability to experiment with alternative functionalities, design configurations, and platform architectures.

Such a strategy would also require policymakers to anticipate both the pace and direction of technological change in markets marked by rapid evolution and substantial uncertainty. Those forward-looking judgments are inherently difficult and heighten the risk of mischaracterizing market power—whether by underestimating emerging competitive constraints or overestimating the extent and persistence of market concentration. These errors may carry significant consequences for innovation, competition, and consumer welfare.

Policymakers therefore must confront not only whether to intervene under the DMA, but when. The challenge is to act early, but not too early.

The European Commission does not appear to share these concerns, at least not fully. In the DMA’s first review, the Commission has thus far opted for a cautious approach.[60] At this stage, it considers the DMA fit for purpose and not in need of amendment, taking the view that the regulation, in its current form, has proved well-suited to a fast-changing environment and able to keep pace with technological developments such as AI.

Yet the Commission’s focus remains directed primarily at the strategies of existing gatekeepers and the deployment of AI tools within designated core platform services. From the Commission’s perspective, then, if the future described in the previous pages is taking shape, it is doing so slowly and is not expected to materialize in the near term. Time will tell which prediction proves correct.

V.             Conclusion

Only a few years after its enactment, the Digital Markets Act’s role, rationale, and claimed future-proof character are already under scrutiny. By challenging existing competitive dynamics, AI may rapidly render obsolete the regulatory initiatives recently adopted to govern digital markets.

The DMA’s first review therefore offers more than an occasion to evaluate enforcement results or assess the regulation’s early impact. It requires policymakers to confront a deeper question about the regime’s future. The issue is not simply what has worked, what has failed, or which obligations require adjustment. The rise of AI applications—and the role they may play in reshaping digital competition—raises the broader question whether, and to what extent, the DMA’s legislative framework should be reopened.

The stakes are significant. The recent wave of digital regulation has been shaped by a Big Tech-centered conception of digital markets, focused on entrenched platform ecosystems, vertically integrated gatekeepers, and self-preferencing risks. AI does not eliminate those concerns. Incumbent firms still control critical inputs, including cloud infrastructure, data, distribution channels, and key ecosystem access points. Existing gatekeepers may use those advantages to incorporate AI into core platform services and reinforce their positions.

But AI also complicates the DMA’s premises. New AI entrants have already shown that downstream AI markets can be dynamic, well-funded, and contestable. Assistive and agentic AI may create new gateways to users, content, goods, and services that do not fit neatly within the DMA’s existing categories of core platform services. These systems may exercise intermediation power without replicating the same economic logic as traditional digital platforms—or the same vertically integrated, dual-role structure that the DMA was built to constrain.

That possibility exposes the central tension running through the DMA. Competition law may act slowly, but its open-ended standards allow it to adapt to technological change. Sector-specific regulation can move faster and impose more targeted obligations, but it risks becoming obsolete when markets evolve in unexpected ways. The DMA’s reliance on detailed and inherently backward-looking rules raised this concern from the outset. AI makes it harder to ignore.

For that reason, the limits of the current regulatory framework should be understood not only as a challenge, but also as an opportunity to rethink the DMA’s architecture. The choice is not between complacency and reflexive expansion. Premature ex ante regulation could chill experimentation in a market whose technological trajectories, business models, and competitive structure remain unsettled. But waiting too long may allow new gatekeeping positions to harden before policymakers respond.

The European Commission has, for now, chosen caution. It acknowledges that AI warrants special vigilance, but remains largely committed to the DMA’s existing Big Tech-centered approach and to monitoring the deployment of AI tools within designated core platform services. That choice may buy time. It does not resolve the underlying dilemma.

If AI markets develop along familiar lines, the DMA may prove sufficiently adaptable. If they instead produce new forms of intermediation, new sources of competitive power, and new gatekeepers outside the regulation’s existing categories, the DMA will require more than fine-tuning. It will require a competition-policy framework capable of addressing AI-driven markets on their own terms.

[1] See, e.g., Bertin Martens, Why Artificial Intelligence Is Creating Fundamental Challenges for Competition Policy, Bruegel Pol’y Brief (July 18, 2024), https://www.bruegel.org/policy-brief/why-artificial-intelligence-creating-fundamental-challenges-competition-policy.

[2] See, e.g., Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on Contestable and Fair Markets in the Digital Sector and Amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act), recital 5, 2022 O.J. (L 265) 1.

[3] See, e.g., Autorité de la Concurrence, Conversational Agents: the Autorité Starts Inquiries Ex Officio with a View to Issuing an Opinion (2026), https://www.autoritedelaconcurrence.fr/en/press-release/conversational-agents-autorite-starts-inquiries-ex-officio-view-issuing-opinion.

[4] S See, e.g., Org. for Econ. Co-operation & Dev. (OECD), Artificial Intelligence and Competitive Dynamics in Downstream Markets (2025), https://www.oecd.org/en/publications/artificial-intelligence-and-competitive-dynamics-in-downstream-markets_ccf0624a-en.html.

[5] Digital Markets Act, supra note 2.

[6] Pursuant to Article 53 of the Digital Markets Act, the European Commission must evaluate the regulation by May 3, 2026, and every three years thereafter, and report its findings to the European Parliament, the Council, and the European Economic and Social Committee. See Eur. Comm’n, Consultation on the First Review of the Digital Markets Act (2025), https://digital-markets-act.ec.europa.eu/consultation-first-review-digital-markets-act_en; Eur. Comm’n, Review of the Digital Markets Act, Call for Evidence, Ares(2025)6881572 (2025), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=intcom:Ares(2025)6881572.

[7] See, e.g., Friso Bostoen & Jan Kramer, How Future-Proof Is the DMA? A Case Study of AI Agents, J. Competition L. & Econ. (forthcoming); Peter Georg Picht, DMA–Innovation (2026), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6409478; Jan-Frederick Gohsl, Future Proofing the DMA for Agentic AI: Lessons from the AI Act, 48 World Competition 315 (2025); Ayse Gizem Yasar, Andrew Chong, Evan Dong, Thomas Krendl Gilbert, Sarah Hladikova, Carlos Mougan, Xudong Shen, Shubham Singh, Ana-Andreea Stoica & Savannah Thais, Integration of Generative AI in the Digital Markets Act: Contestability and Fairness from a Cross-Disciplinary Perspective, LSE L., Soc’y & Econ. Working Papers No. 4 (2024), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4769439; Philipp Hacker, Johann Cordes & Janina Rochon, Regulating Gatekeeper Artificial Intelligence and Data: Transparency, Access and Fairness under the Digital Markets Act, the General Data Protection Regulation and Beyond, 15 Eur. J. Risk Reg. 49 (2024); Andreas Schwab, Digital Markets Act and Artificial Intelligence Services, 3 Concurrences 1 (2024).

[8] Eur. Comm’n, Comm’n Staff Working Document Accompanying the Report on the Review of Regulation (EU) 2022/1925 of the European Parliament and of the Council on Contestable and Fair Markets in the Digital Sector and Amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act), in Accordance with Article 53 Thereof, SWD(2026) 123 final, at 48.

[9] See, e.g., Marco Cappai & Giuseppe Colangelo, Taming Digital Gatekeepers: the More Regulatory Approach to Antitrust Law, 41 Computer L. & Sec. Rev. 105559 (2021).

[10] See, e.g., Andrei Hagiu & Julian Wright, Artificial Intelligence and Competition Policy, 103 Int’l J. Indus. Org. 103134 (2025); Anton Korinek & Jai Vipra, Concentrating Intelligence: Scaling and Market Structure in Artificial Intelligence, 40 Econ. Pol’y 227 (2025); Zach Meyers & Marc Bourreau, A Competition Policy for Cloud and AI, Ctr. on Regul. in Eur. (2025), https://cerre.eu/publications/a-competition-policy-for-cloud-and-ai; Thibault Schrepel & Alex “Sandy” Pentland, Competition Between AI Foundation Models: Dynamics and Policy Recommendations, 34 Indus. & Corp. Change 1085 (2025); Catherine Tucker, How Does Competition Policy Need to Change in a World of Artificial Intelligence?, 40 Oxford Rev. Econ. Pol’y 834 (2024).

[11] See, e.g., Austl. Competition & Consumer Comm’n, Digital Platform Services Inquiry—Final Report (2025), https://www.accc.gov.au/inquiries-and-consultations/digital-platform-services-inquiry-2020-25/march-2025-final-report; Org. for Econ. Co-operation & Dev. (OECD), Competition in Artificial Intelligence Infrastructure (2025), https://www.oecd.org/en/publications/competition-in-artificial-intelligence-infrastructure_623d1874-en.html; Autorité de la Concurrence, Opinion on the Competitive Functioning of the Generative Artificial Intelligence Sector (2024), https://www.autoritedelaconcurrence.fr/en/press-release/generative-artificial-intelligence-autorite-issues-its-opinion-competitive; Korea Fair Trade Comm’n, Generative AI and Competition (2024), https://www.ftc.go.kr/viewer/synap/skin/doc.html?fn=BBS_202502130426599090&rs=/viewer/synap/preview/; Klaus Kowalski, Cristina Volpin & Zsolt Zombori, Competition in Generative AI and Virtual Worlds, Eur. Comm’n Competition Pol’y Brief No. 3 (2024), https://op.europa.eu/en/publication-detail/-/publication/5530c8ca-7a1f-11ef-bbbe-01aa75ed71a1/language-en; UK Competition & Mkts. Auth., AI Foundation Models—Updated Paper (2024), https://www.gov.uk/government/publications/ai-foundation-models-update-paper; Autoridade da Concorrência, Competition and Generative Artificial Intelligence (2023), https://www.concorrencia.pt/en/articles/adc-warns-competition-risks-generative-artificial-intelligence-sector.

[12] Eur. Comm’n, Consultation on the First Review of the Digital Markets Act, supra note 6.

[13] Eur. Comm’n, DMA Review—Summary of the Contributions to the Targeted Consultation (2026), https://digital-markets-act.ec.europa.eu/commission-publishes-summary-and-responses-consultation-ongoing-review-digital-markets-act-2026-01-08_en.

[14] Digital Markets Act, supra note 2, rec. 5.

[15] Id.

[16] Id.

[17] Id., rec. 13.

[18] Id., rec. 3, 6, 51.

[19] Id., rec. 3.

[20] Id., rec. 4.

[21] Id., recs. 46, 57.

[22] See, e.g., Cristina Caffarra & Fiona Scott Morton, The European Commission Digital Markets Act: A Translation, VoxEU (Jan. 5, 2021), https://voxeu.org/article/european-commission-digital-markets-act-translation.

[23] See, e.g., Giuseppe Colangelo, Antitrust Unchained: The EU’s Case Against Self-Preferencing, 72 GRUR Int’l 538 (2023).

[24] Digital Markets Act, supra note 2, art. 19.

[25] See, e.g., Margrethe Vestager, Speech, Making Artificial Intelligence Available to All—How to Avoid Big Tech’s Monopoly on AI? (Feb. 18, 2024), https://ec.europa.eu/commission/presscorner/detail/en/speech_24_931.

[26] See, e.g., Autorité de la Concurrence, supra note 11; Can. Competition Bureau, Artificial Intelligence and Competition: Discussion Paper (2024), https://publications.gc.ca/site/eng/9.935280/publication.html; Press Release, Eur. Comm’n, UK Competition & Mkts. Auth., U.S. Dep’t of Just. & U.S. Fed. Trade Comm’n, Joint Statement on Competition in Generative AI Foundation Models and AI Products (2024), https://competition-policy.ec.europa.eu/about/news/joint-statement-competition-generative-ai-foundation-models-and-ai-products-2024-07-23_en; Korea Fair Trade Comm’n, supra note 11; Kowalski et al., supra note 11; UK Competition & Mkts. Auth., supra note 11; Autoridade da Concorrência, supra note 11.

[27] See, e.g., Press Release, Taiwan Fair Trade Comm’n, Taiwan Fair Trade Commission Publishes Public Consultation Report and Competition Policy Statement on Generative AI (2026), https://www.ftc.gov.tw/internet/english/doc/docDetail.aspx?uid=179&docid=18369; Press Release, Eur. Comm’n, Commission Launches Calls for Contributions on Competition in Virtual Worlds and Generative AI (2024), https://ec.europa.eu/commission/presscorner/detail/en/IP_24_85.

[28] See, e.g., Press Release, Anthropic, Anthropic Expands Partnership with Google and Broadcom for Multiple Gigawatts of Next-Generation Compute (2026), https://www.anthropic.com/news/google-broadcom-partnership-compute; Ashley Capoot & Kate Rooney, Google to Invest up to $40 Billion in Anthropic as Search Giant Spreads Its AI Bets, CNBC (Apr. 24, 2026), https://www.cnbc.com/2026/04/24/google-to-invest-up-to-40-billion-in-anthropic-as-search-giant-spreads-its-ai-bets.html; Press Release, OpenAI, OpenAI and Amazon Announce a Strategic Partnership (Feb. 27, 2026), https://openai.com/index/amazon-partnership?utm_source=chatgpt.com.

[29] See, e.g., Press Release, Conselho Administrativo de Defesa Econômica, CADE to Investigate Big Techs’ Acquisitions of AI Startups (Sept. 4, 2024), https://www.gov.br/cade/en/matters/news/cade-to-investigate-big-techs2019-acquisitions-of-ai-startups; Eur. Comm’n, supra note 27; Press Release, UK Competition & Mkts. Auth., CMA Seeks Views on AI Partnerships and Other Arrangements (Apr. 24, 2024), https://www.gov.uk/government/news/cma-seeks-views-on-ai-partnerships-and-other-arrangements; Press Release, U.S. Fed. Trade Comm’n, FTC Launches Inquiry into Generative AI Investments and Partnerships (Jan. 25, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-launches-inquiry-generative-ai-investments-partnerships.

[30] See, e.g., Conselho Administrativo de Defesa Econômica, Cade Abre Inquérito contra Meta e Aplica Medida Preventiva Suspendendo Novos Termos do WhatsApp sobre IA (Jan. 1, 2026), https://www.gov.br/cade/pt-br/assuntos/noticias/cade-abre-inquerito-contra-meta-e-aplica-medida-preventiva-suspendendo-novos-termos-do-whatsapp-sobre-ia; Press Release, Eur. Comm’n, Commission Notifies Meta of Possible Interim Measures to Reverse Exclusion of Third-Party AI Assistants from WhatsApp (Feb. 8, 2026), https://ec.europa.eu/commission/presscorner/detail/en/ip_26_310; Press Release, Autorità Garante della Concorrenza e del Mercato, The Italian Competition Authority Launches Investigation into Meta over Abuse of Dominant Position (July 30, 2025), https://en.agcm.it/en/media/press-releases/2025/7/A576.

[31] See, e.g., Hagiu & Wright, supra note 10; OECD, supra note 11.

[32] See, e.g., U.S. Fed. Trade Comm’n, Generative AI Raises Competition Concerns (June 29, 2023), https://www.ftc.gov/policy/advocacy-research/tech-at-ftc/2023/06/generative-ai-raises-competition-concerns.

[33] See, e.g., Press Release, High-Level Group for the Digital Markets Act, Joint Paper on Artificial Intelligence—Mapping out Regulatory Interplay Related to AI Issues (Dec. 12, 2025), https://digital-markets-act.ec.europa.eu/fifth-meeting-digital-markets-act-high-level-group-2025-12-12_en; Autorité de la Concurrence, supra note 11; UK Competition & Mkts. Auth., supra note 11.

[34] See, e.g., Press Release, Autorité de la Concurrence, Cloud Computing: the Autorité de la Concurrence Issues Its Market Study on Competition in the Cloud Sector (June 29, 2023), https://www.autoritedelaconcurrence.fr/en/press-release/cloud-computing-autorite-de-la-concurrence-issues-its-market-study-competition-cloud.

[35] Press Release, Eur. Comm’n, Commission Launches Market Investigations on Cloud Computing Services under the Digital Markets Act (Nov. 18, 2025), https://digital-markets-act.ec.europa.eu/commission-launches-market-investigations-cloud-computing-services-under-digital-markets-act-2025-11-18_en; see also Judith Arnal, Cloud Competition as a Prerequisite for Competitiveness: Rethinking EU Digital Regulation, J. Eur. Competition L. & Prac. (forthcoming); Antonio Manganelli, Foundation Models and Generative AI Applications: What Competitive Concerns?, 22 Eur. Competition J. 264 (2026); Hagiu & Wright, supra note 10.

[36] See, e.g., Kowalski et al., supra note 11.

[37] See, e.g., High-Level Group for the Digital Markets Act, supra note 33.

[38] Vestager, supra note 25; see also Pierre Azoulay, Joshua Krieger & Abhishek Nagaraj, Old Moats for New Models: Openness, Control, and Competition in Generative Artificial Intelligence, in Entrepreneurship and Innovation Policy and the Economy 7 (Benjamin Jones & Josh Lerner eds., 2025) (arguing that incumbent firms’ control over key complementary assets is likely to produce highly concentrated markets and relegate entrants to the application layer, much as occurred in the smartphone sector.)

[39] See, e.g., Hagiu & Wright, supra note 10; Korinek & Vipra, supra note 10; Meyers & Bourreau, supra note 10; Tucker, supra note 10.

[40] See, e.g., Austl. Competition & Consumer Comm’n, supra note 11; Autoridade da Concorrência, supra note 11; Autorité de la Concurrence, supra note 11.

[41] See, e.g., OpenAI, OpenAI Raises $122 Billion to Accelerate the Next Phase of AI (Mar. 31, 2026), https://openai.com/index/accelerating-the-next-phase-ai; Kate Clark, Anthropic Raising $10 Billion at $350 Billion Value, Wall St. J. (2026), https://www.wsj.com/tech/ai/anthropic-raising-10-billion-at-350-billion-value-62af49f4.

[42] Eur. Comm’n, Case Summary—Case DMA.100220—Alphabet—OS—Google Android—Art. 6(7) Features for AI or AI-Related Services (Apr. 27, 2026), https://digital-markets-act.ec.europa.eu/dma100220-consultation-proposed-measures-interoperability-google-android-article-67-dma_en.

[43] OECD, supra note 4, at 25. See also Nicolas Padilla, H. Tai Lam, Anja Lambrecht & Brett Hollenbeck, The Impact of LLM Adoption on Online User Behavior (2026), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5393256 (finding that AI tools may significantly alter how users engage with online information and substantially reduce online search activity); Hagiu & Wright, supra note 10 (arguing that AI-based search engines pose the most significant disruptive threat to Google Search in years and that AI agents could disrupt online marketplaces by offering alternative supplier-access channels).

[44] See, e.g., UK Gov’t, Guidance AI Insights: Agentic AI (HTML) (Mar. 13, 2025), https://www.gov.uk/government/publications/ai-insights/ai-insights-agentic-ai-html (describing agentic AI as systems composed of autonomous agents—specialized software programs capable of making decisions and acting independently or collaboratively to achieve defined objectives).

[45] See, e.g., Autorité de la Concurrence, supra note 3.

[46] OpenAI, Introducing Apps in ChatGPT and the New Apps SDK (Oct. 6, 2025), https://openai.com/index/introducing-apps-in-chatgpt?utm_source=chatgpt.com.

[47] See Janakiram MSV, Microsoft Builds Its Own AI Model Stack To Reduce OpenAI Dependence, Forbes (Apr. 2, 2026), https://www.forbes.com/sites/janakirammsv/2026/04/02/microsoft-builds-its-own-ai-model-stack-to-reduce-openai-dependence?utm_source=chatgpt.com; Microsoft, The Next Chapter of the Microsoft–OpenAI Partnership (Oct. 28, 2025), https://blogs.microsoft.com/blog/2025/10/28/the-next-chapter-of-the-microsoft-openai-partnership.

[48] See Press Release, Amazon, Amazon and Anthropic Expand Strategic Collaboration (Apr. 20, 2026), https://www.aboutamazon.com/news/company-news/amazon-invests-additional-5-billion-anthropic-ai; Press Release, Google, Joint Statement from Google and Apple (Jan. 12, 2026), https://blog.google/company-news/inside-google/company-announcements/joint-statement-google-apple; Press Release, OpenAI, OpenAI and Amazon Announce Strategic Partnership (Feb. 27, 2026), https://openai.com/index/amazon-partnership.

[49] Eur. Comm’n, Review of the Digital Markets Act, supra note 6.

[50] Press Release, Eur. Comm’n, Commission Opens Proceedings to Assist Google in Complying with Interoperability and Online Search Data Sharing Obligations under the Digital Markets Act (Jan. 26, 2026), https://ec.europa.eu/commission/presscorner/detail/en/ip_26_202. In late April 2026, the Commission adopted preliminary findings setting out proposed measures that remain subject to public consultation. See Press Release, Eur. Comm’n, Commission Seeks Feedback on Measures to Ensure Interoperability with Google’s Android under the Digital Markets Act (Apr. 26, 2026), https://ec.europa.eu/commission/presscorner/detail/en/ip_26_887.

[51] Press Release, Eur. Comm’n, Commission Sends Preliminary Findings to Alphabet under the Digital Markets Act (Mar. 18, 2025), https://ec.europa.eu/commission/presscorner/detail/en/ip_25_811.

[52] Digital Markets Act, supra note 2, art. 3(1)(c).

[53] Id. art. 3(8).

[54] Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market for Digital Services and Amending Directive 2000/31/EC (Digital Services Act), 2022 O.J. (L 277) 1.

[55] See, e.g., Marco Bassini & Andrea Palumbo, Beyond Intermediaries—Generative AI in Search of Their Legal Status, Verfassungsblog (Apr. 12, 2026), https://verfassungsblog.de/genai-dsa; Lilian Edwards, Igor Szpotakowski, Gabriele Cifrodelli, Joséphine Sangaré & James Stewart, Private Ordering, Generative AI and the “Platformisation Paradigm”: What Can We Learn from Comparative Analysis of Models Terms and Conditions?, 1 Cambridge Forum on AI: L. & Governance 1 (2025). See also Christoph Busch, Enabling Innovation and Protecting Consumers in the Agentic Economy: Why the Digital Fairness Act Should Regulate Agentic AI (2025), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5369055 (arguing that agentic AI remains a blind spot in debates surrounding the proposed Digital Fairness Act); Eur. Comm’n, Call for Evidence for an Impact Assessment, Ares(2025)5829481, https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14622-Digital-Fairness-Act_en.

[56] Press Release, High-Level Group for the Digital Markets Act, Public Statement on Artificial Intelligence (May 22, 2024), https://digital-markets-act.ec.europa.eu/high-level-group-digital-markets-act-public-statement-artificial-intelligence-2024-05-22_en.

[57] See, e.g., Gohsl, supra note 7; Yasar et al., supra note 7.

[58] See, e.g., Bostoen & Kramer, supra note 7; Picht, supra note 7.

[59] See, e.g., Hagiu & Wright, supra note 10 (noting that AI agents may simply replace one type of gatekeeper with another, as providers with larger consumer bases could develop superior recommendation capabilities through data-driven feedback loops and then charge suppliers substantial access fees).

[60] Eur. Comm’n, Report on the Review of Regulation (EU) 2022/1925 of the European Parliament and of the Council on Contestable and Fair Markets in the Digital Sector and Amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act), in Accordance with Article 53 Thereof, COM(2026) 178 final, at 9–11. See also Eur. Comm’n, supra note 8, § 4.2.3.

It’s not every day that a viral claim leads to a change in the law five months later.

But that’s exactly what happened after Consumer Reports and Groundwork Collaborative published a December study about the grocery delivery service Instacart.

Read the full piece here.

When Congress told the Federal Communications Commission to prevent “digital discrimination of access” to broadband, it gave the agency a narrow job: stop broadband providers from discriminating based on income, race, national origin, and other protected traits.

Mercatus scholars are helping to deliver policy outcomes that improve people’s lives. Liya Palagashvili’s research focuses on empowering independent workers through portable benefits—benefits that aren’t tied to a specific employer but travel with the worker. Liya believes the issue of portable benefits will be central to the American workforce of the 21st century: “The portable benefits revolution has arrived!” She has driven a niche policy idea to the top of the congressional agenda; the story below shows the difference this idea is making in the lives of everyday Americans.

Read the full piece here.

A lawsuit over infinite scroll sounds, at first blush, like a fight over product design. Make the app less sticky. Stop nudging teens to keep scrolling. Turn down the algorithmic dopamine machine.

But the harder constitutional question is whether courts can do all that through broad, after-the-fact liability standards without telling platforms what the law actually requires. The legal world is currently watching a high-stakes collision between two foundational principles: the government’s power to protect children from allegedly “addictive” technology, and the constitutional requirement that laws give regulated parties fair notice of what conduct is illegal. As the Supreme Court  has explained, “we insist that laws give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly.”

That tension is now coming to a head. Appeals are likely in both New Mexico v. Meta and K.G.M. v. Meta, even as federal courts continue issuing rulings in the NetChoice litigation challenging state social-media laws, including in Arkansas. Together, these cases are exposing a basic fault line in modern tech regulation: Can courts impose liability on social-media platforms under broad “negligence” or “unfair trade practices” theories, or are those standards simply too vague to satisfy constitutional due-process requirements?

The answer appears to turn largely on how courts characterize core platform features, such as algorithmic recommendations, infinite scroll, disappearing messages, autoplay, and push notifications. Put simply, are these features protected First Amendment activity, or merely product design?

That distinction matters enormously. If courts treat these features as protected speech or editorial discretion, then laws targeting them face constitutional scrutiny. Courts must ask whether the law restricts more speech than necessary, and whether the law—or its application—is too vague for regulated parties to know when they are crossing the line.

If, by contrast, courts treat these features as mere conduct, then the First Amendment largely drops out of the analysis. Courts instead presume that businesses have adequate notice of how broad negligence or consumer-protection laws apply to platform design choices.

Read the full piece here.

Executive Summary

The Trump administration came into office promising to end federal censorship and government weaponization. Its Jan. 20, 2025 executive orders framed the prior administration’s pressure on social-media platforms as intolerable interference with the marketplace of ideas. But rather than abandon coercion as a tool of speech policy, the administration has redirected it through the Federal Trade Commission (FTC) and Federal Communications Commission (FCC).

The targets are the intermediaries that structure modern speech markets: social-media platforms, advertisers, fact-checkers, broadcasters, and payment networks. Many of these intermediaries are multisided platforms, meaning pressure applied to one side can reshape incentives across the whole ecosystem. Government officials can therefore influence speech indirectly by targeting advertisers, banks, broadcast affiliates, or evaluators of online content rather than speakers themselves. That is the danger of censorship-by-proxy.

The FTC’s campaign against alleged online censorship illustrates the problem. The agency has pursued advertising agencies, investigated Media Matters and NewsGuard, imposed speech-related merger conditions, warned Apple about Apple News curation, and pressed payment networks to police alleged debanking by financial institutions. These actions purport to combat private censorship, but they often seek to alter private editorial, reputational, and financial judgments through threatened government power.

The FCC has followed a similar path in broadcast regulation. Chairman Brendan Carr’s public threats regarding Jimmy Kimmel, broadcast-license renewals, and alleged “fake news” invoked the FCC’s broad public-interest authority to influence programming and editorial choices. These episodes show how open-ended agency discretion enables officials to pressure speech intermediaries while avoiding the appearance of direct censorship.

Courts should revisit outdated precedents like Red Lion and Pacifica, which give broadcasters weaker First Amendment protection than other media. Congress should also narrow the FTC’s and FCC’s discretionary authority. Protecting free speech requires more than changing who controls regulatory power; it requires limiting the government’s ability to use that power to shape public discourse.

I.        Introduction

On Jan. 20, 2025, the Trump administration issued the executive order “Restoring Freedom of Speech and Ending Federal Censorship,”[1] promising to end the Biden administration’s interventions in the marketplace of ideas. The order framed itself as a direct response to what it characterized as years of backdoor censorship, in which federal agencies allegedly exerted “substantial coercive pressure” on private actors, including social-media platforms, to suppress disfavored viewpoints under the guise of combating misinformation.[2]

A year later, that professed commitment to the First Amendment has given way to redirected regulation. While the administration publicly condemns the “censorship-industrial complex,”[3] it has simultaneously used the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) to exert a different, but equally potent, form of coercion over the intermediaries that facilitate modern speech.

The legal backdrop for the executive order emerged from the Supreme Court’s decisions in Murthy v. Missouri[4] and NRA v. Vullo.[5]  In Murthy, the Court’s majority avoided the merits of a First Amendment challenge to government jawboning by tightening standing requirements. The dissent, by contrast, warned of a “successful campaign of coercion” that could become an “attractive model for future officials who want to control what the people say, hear, and think.”[6] The administration’s 2025 executive order purported to reject that model altogether, declaring that “government censorship of speech is intolerable in a free society.”[7]

As the Court explained in Vullo, “a government official cannot do indirectly what she is barred from doing directly…. [S]he cannot coerce a private party to punish or suppress disfavored speech on her behalf.”[8] But battles over speech regulation rarely concern protection of the marketplace itself. More often, they concern who controls the editorial discretion of the platforms and intermediaries that structure public discourse.

In the marketplace of ideas, truth emerges through a decentralized system of competing private actors, each making editorial judgments under conditions of imperfect information. That process reflects the classic “knowledge problem”: no central authority possesses enough information to manage speech markets more effectively than dispersed private decision-makers. When the state intervenes—whether to suppress “misinformation” or to punish so-called private censorship—it distorts that process by replacing decentralized judgments with centralized political preferences.

The Trump administration’s recent actions illustrate that dynamic. From the FTC’s complaints against advertising agencies for allegedly “viewpoint-based” ad placement, to its disputes with fact-checking organizations like NewsGuard and Media Matters, to warning letters sent to Apple and major credit-card networks suggesting possible unfair or deceptive practices, the administration has not ended coercion over speech. It has merely redirected that coercion away from social-media platforms and toward the financial, evaluative, and infrastructural institutions that support them.

The FCC has adopted a similarly aggressive posture. Its threats against broadcast-license holders—often responding to late-night satire from figures like Jimmy Kimmel or to programming the administration characterizes as “fake news”—mark a return to an older and more direct form of regulatory intimidation. Rather than establishing state neutrality, the transition from the Biden administration to the Trump administration has largely amounted to the replacement of one set of speech regulators with another.

This white paper argues that the Trump administration has failed to honor the principles articulated in its executive orders on free speech and government weaponization. Rather than ending federal censorship or political coercion, the administration has updated the coercion model identified in Vullo, using the FTC and FCC to pressure the multisided platforms and intermediaries that underpin the modern economy. By targeting the editorial and financial decisions of advertising agencies, fact-checkers, credit-card networks, and broadcasters, the administration has disregarded a core First Amendment principle: genuine freedom of speech requires the state to respect the editorial discretion and business judgments of private actors. The administration has not restored the marketplace of ideas. It has simply installed a different set of censors advancing a different vision of acceptable speech.

Section II provides the law & economics background necessary to understand how these disputes emerged. Section II.A examines how multisided platforms support speech and speakers in both online and offline markets. Section II.B outlines the legal and policy responses to alleged private censorship and censorship-by-proxy through government coercion that culminated in the administration’s executive orders and subsequent efforts to limit what it views as private censorship.

Section III examines the FTC’s campaign against advertising agencies and fact-checking organizations accused of facilitating private censorship on social-media platforms. Section III.A focuses on the FTC’s actions against advertising agencies and fact-checkers, including complaints, merger conditions, and the use of civil investigative demands (CIDs). Section III.B analyzes FTC Chairman Andrew Ferguson’s letter to Apple concerning alleged bias in Apple News curation, as well as his letters to major credit-card networks regarding debanking concerns.

Section IV analyzes the FCC’s jawboning of broadcast-license holders and its efforts to pressure affiliates to resist national-network programming decisions. Section IV.A evaluates the Jimmy Kimmel controversy following the public comments of FCC Chairman Brendan Carr. Section IV.B considers social-media posts from President Trump and Chairman Carr threatening license renewals for broadcasters that carry purported “fake news.”

Section V proposes a path forward grounded in the First Amendment and the rule of law. Multisided platforms remain politically vulnerable because of their central role in the modern economy and public discourse. Government officials can engage in backdoor censorship in part because administrative agencies retain broad discretionary authority. Reducing that discretion is therefore critical. Courts have begun pushing back against some forms of coercive regulation, but policymakers may need to impose more meaningful limits on executive agencies than the administration’s executive orders have thus far achieved.

II.     The Road to Jawboning: Platforms, Pressure, and Speech

Before evaluating whether the Trump administration has honored its executive orders on federal censorship and government weaponization, it is necessary to understand the economic and legal framework that produced the current disputes over speech regulation and government coercion.

Section II.A explains the economics of multisided platforms, which underpin much of modern speech infrastructure, including social-media companies, broadcasters, advertising networks, and payment systems. Because these platforms mediate relationships among users, advertisers, merchants, content creators, and other participants, government pressure directed at one side of a platform can ripple throughout the broader ecosystem. The section also explains why editorial discretion and content moderation are not incidental features of these platforms, but core components of how they compete in the marketplace of ideas and the broader attention market.

Section II.B then examines the legal and policy developments that culminated in the Trump administration’s executive orders purporting to limit government coercion over speech. It traces the rise of informal government “jawboning,” from Operation Choke Point to allegations of censorship-by-proxy involving social-media platforms, culminating in the Supreme Court’s decision in Murthy v. Missouri. Together, these developments illustrate both the vulnerability of multisided platforms to government pressure and the difficulty of policing that pressure through existing First Amendment doctrine.

A.     Multisided Platforms and the Marketplace of Ideas

The Supreme Court has recognized the importance of understanding multisided platforms in the antitrust context.[9] Quoting extensively from the work of economists—including, in particular, David Evans—the Court has explained that multisided platforms exhibit indirect network effects, “where the value… to one group of participants depends on how many members of a different group participate.”[10] As a result, “[s]ometimes indirect network effects require two-sided platforms to charge one side more than the other.” In the payment-card context, for example, networks may choose to “lose money on the cardholder side by offering rewards” and other benefits, because increasing cardholder participation makes the network more valuable to merchants.[11] Networks can then charge merchants a fee for each transaction, typically as a percentage of the purchase price. “Striking the optimal balance of the prices charged on each side of the platform is essential for [these] platforms to maximize the value of their services and to compete with rivals.”[12] In short, multisided platforms must balance the interests of multiple groups simultaneously to maximize value.

Both online and offline speech markets often operate through this multisided-platform model. Radio and television broadcasters, for instance, produce content that consumers only partially fund directly. Advertisers subsidize the other side of the platform by paying for access to audiences. Likewise, social-media companies connect advertisers with users—including both speakers and listeners—through the curation and distribution of third-party speech. In both online and offline contexts, advertisers cross-subsidize users to such an extent that these services often appear “free” to listeners, viewers, readers, and users.

Social-media companies, newspapers, broadcasters, and other media intermediaries therefore compete in what economists often describe as the “attention market.” These firms compete to attract and retain public attention through content and then monetize that attention by selling advertising access. Success depends on maintaining user engagement. Platforms must therefore curate, organize, and present content in ways that capture and sustain scarce consumer attention.

That dynamic requires platforms to balance the interests of multiple constituencies. Advertisers may favor content that maximizes engagement, even when the content itself may be false, inflammatory, hateful, or harmful to minors. Brand-conscious advertisers, by contrast, may avoid association with controversial or offensive material. Users also have preferences regarding the type of content they wish to see—or avoid seeing. Platforms must navigate these competing pressures because losing participants on either side of the platform diminishes the platform’s value to the other side.

These economic realities explain why social-media companies maintain content-moderation policies and often share revenue with high-value creators. Platforms must simultaneously satisfy advertisers, content creators, content consumers, and other stakeholders. Repulsive or extremist content may drive away users and advertisers alike. Low-quality, irrelevant, or excessively intrusive advertising may alienate users. Inadequate compensation may push creators to rival platforms. A lack of engaging content may send audiences elsewhere, whether to competing social-media platforms or to other participants in the broader attention market.

Private platforms are generally best-positioned to make these tradeoffs within the marketplace of ideas.[13] Different social-media companies have experimented with different content-moderation approaches over time, with platform policies shifting in response to user demand, advertiser preferences, and competitive pressures.[14] The Supreme Court has recognized that social-media companies possess a First Amendment right to exercise editorial discretion over content decisions, much like newspapers, broadcasters, and other traditional media entities.[15] As a result, direct government efforts to compel the carriage of speech on social-media platforms likely face serious constitutional obstacles.

The threat of government influence over speech nevertheless remains. Even if direct speech mandates are constitutionally suspect, government officials may still attempt to shape online discourse indirectly through coercion, pressure campaigns, or regulatory threats. The next section examines the legal and policy background surrounding those efforts.

B.     Government Coercion and Censorship-by-Proxy

Multisided platforms are especially vulnerable to government coercion because they operate as intermediaries within larger economic and informational ecosystems. Restrictions aimed at one side of a platform often affect the other sides, as well. Government pressure on a platform’s relationships with advertisers, users, merchants, or financial partners can therefore ripple throughout the broader ecosystem.

Operation Choke Point during the Obama administration illustrates the dynamic.[16] Under that initiative, the Federal Deposit Insurance Corp. (FDIC) designated certain merchant categories as “high-risk activity,” while the U.S. Justice Department (DOJ) pressured banks and payment processors by threatening investigations and issuing subpoenas suggesting that servicing such businesses created actionable “reputational risk.”[17] The result was that many lawful businesses—including payday lenders, firearms dealers, tobacco retailers, online-gambling operators, and pornography companies—lost access to banking and payment-processing services.[18]

Critics allege that “Operation Choke Point 2.0” under the Biden administration applied a similar strategy to digital-asset firms[19] and even some conservative organizations[20] by again designating them “high-risk.”[21] The result was widespread complaints of debanking among cryptocurrency firms and account holders, including one prominent dispute involving a religious-liberty organization founded by former U.S. Sen. and Kansas Gov. Sam Brownback.

At the same time, the Biden administration—as well as various federal and state actors before President Biden took office—was credibly accused of pressuring social-media companies to suppress disfavored viewpoints related to the 2020 election and later alleged health misinformation. After Elon Musk acquired Twitter and released the “Twitter Files,”[22] and after discovery in litigation brought by several plaintiffs, including the states of Missouri and Louisiana, substantial evidence emerged regarding government efforts to pressure platforms into restricting speech through informal and often covert means.

The litigation that began as Missouri v. Biden ultimately reached the Supreme Court as Murthy v. Missouri.[23] Rather than deciding whether the Biden administration violated the First Amendment by coercing social-media platforms to suppress protected speech, the Court reversed the 5th U.S. Circuit Court of Appeals on standing grounds.

Standing doctrine stems from Article III’s limitation of federal judicial power to actual “cases” and “controversies.” To establish standing, plaintiffs must demonstrate:

1. A concrete and particularized injury that is actual or imminent;
2. That the injury is fairly traceable to the challenged conduct; and
3. That the injury is redressable by a favorable judicial decision.

The Court focused primarily on traceability and redressability. Because the plaintiffs sought prospective relief against future injuries rather than compensation for past harms, the majority concluded they needed to show not only prior censorship, but also a substantial likelihood of future censorship attributable to government action. Specifically, the Court held that “the plaintiffs must show a substantial risk that, in the near future, at least one platform will restrict the speech of at least one plaintiff in response to the actions of at least one Government defendant.”[24]

The majority disposed of nearly all plaintiffs on traceability grounds, concluding that “the record of past restrictions… lack[s]… specific causation findings with respect to any discrete instance of content moderation.”[25] Because “the platforms had independent incentives to moderate content and often exercised their own judgment,”[26] the Court found insufficient evidence that government pressure caused any particular moderation decision.

The only plaintiff whom the majority believed presented a plausible traceability argument was Jill Hines. The dissent likewise focused heavily on her claims. The majority acknowledged that Hines presented “the best showing of all the plaintiffs,” but nevertheless concluded:

Still, Facebook was targeting her pages before almost all of its communications with the White House and the CDC, which weakens the inference that her subsequent restrictions are likely traceable [to the government].[27]

The dissent strongly disagreed:

Here, it is reasonable to infer (indeed, the inference leaps out from the record) that the efforts of the federal officials affected at least some of Facebook’s decisions to censor Hines. All of Facebook’s demotion, content-removal, and deplatforming decisions are governed by its policies. So when the White House pressured Facebook to amend some of the policies related to speech in which Hines engaged, those amendments necessarily impacted some of Facebook’s censorship decisions. Nothing more is needed. What the Court seems to want are a series of ironclad links—from a particular coercive communication to a particular change in Facebook’s rules or practice and then to a particular adverse action against Hines.[28]

The majority also concluded that the plaintiffs failed to demonstrate a substantial risk of future injury because the White House and Centers for Disease Control and Prevention (CDC) pressure campaigns largely subsided by 2022:

On this record, it appears that the frequent, intense communications that took place in 2021 had considerably subsided by 2022. (Perhaps unsurprisingly, given the changed state of the pandemic.) It is thus very difficult for Hines to show that she faces future harm that is traceable to officials in the White House and the Surgeon General’s Office… Hines (along with the other plaintiffs) has therefore failed to establish a likelihood of future injury traceable to the White House or the Surgeon General’s Office. Likewise, the risk of future harm traceable to the CDC is minimal. The CDC stopped meeting with the platforms in March 2022. Thereafter, the platforms sporadically asked the CDC to verify or debunk several claims about vaccines. But the agency has not received any such message since the summer of 2022.[29]

The dissent argued that the majority discounted the lasting effects of the government-induced policy changes. In the dissent’s view, the relevant moderation policies remained in place long after Hines filed suit. Moreover, “the White House threats did not come with expiration dates.”[30] To the contrary, “the record suggests that Facebook did not feel free to chart its own course when Hines sued; rather, the platform had promised to continue reporting to the White House and remain responsive to its concerns for as long as the officials requested.”[31]

The Court also held that the plaintiffs failed to establish redressability. According to the majority, a court could prohibit federal officials from pressuring platforms regarding content moderation, but “platforms remain free to enforce, or not to enforce, those policies—even those tainted by initial governmental coercion.”[32] Because the platforms themselves were not parties to the case, they would not be bound by any judicial remedy.

The practical consequence of Murthy is that future plaintiffs alleging censorship-by-proxy will likely face substantial standing hurdles. Going forward, the platforms themselves may be the only parties positioned to bring such claims successfully.

These disputes helped motivate the flurry of executive orders President Donald Trump issued on Jan. 20, 2025. Two are especially relevant here: “Restoring Freedom of Speech and Ending Federal Censorship”[33] and “Ending the Weaponization of the Federal Government.”[34]

The executive order on federal censorship states:

The First Amendment to the United States Constitution, an amendment essential to the success of our Republic, enshrines the right of the American people to speak freely in the public square without Government interference.  Over the last 4 years, the previous administration trampled free speech rights by censoring Americans’ speech on online platforms, often by exerting substantial coercive pressure on third parties, such as social media companies, to moderate, deplatform, or otherwise suppress speech that the Federal Government did not approve.  Under the guise of combatting “misinformation,” “disinformation,” and “malinformation,” the Federal Government infringed on the constitutionally protected speech rights of American citizens across the United States in a manner that advanced the Government’s preferred narrative about significant matters of public debate.  Government censorship of speech is intolerable in a free society.[35]

The order accordingly provides that “[n]o federal department, agency, entity, officer, or agent may act or use any federal resources” to violate “the right of the American people to engage in constitutionally protected speech.”[36]

The executive order addressing government weaponization similarly states:

The American people have witnessed the previous administration engage in a systematic campaign against its perceived political opponents, weaponizing the legal force of numerous Federal law enforcement agencies and the Intelligence Community against those perceived political opponents in the form of investigations, prosecutions, civil enforcement actions, and other related actions.  These actions appear oriented more toward inflicting political pain than toward pursuing actual justice or legitimate governmental objectives.  Many of these activities appear to be inconsistent with the Constitution and/or the laws of the United States… Therefore, this order sets forth a process to ensure accountability for the previous administration’s weaponization of the Federal Government against the American people.[37]

The sections that follow examine whether the Trump administration—particularly through the FTC, the FCC, and their respective chairmen—has honored the principles embodied in these executive orders or instead continued to engage in censorship and political weaponization against disfavored entities.

III.   The FTC and Indirect Speech Regulation

Combating alleged online censorship has become a central priority of the FTC under Chairman Andrew Ferguson. The agency has framed many of its recent actions as efforts to protect free expression and prevent politically motivated discrimination by social-media platforms, advertisers, payment networks, and other intermediaries that shape the modern marketplace of ideas.

As the sections below demonstrate, however, the FTC has frequently relied on many of the same coercive tools that critics accused the Biden administration of using. Rather than pressuring social-media platforms directly to remove speech, the agency has increasingly targeted the broader multisided ecosystems surrounding those platforms. The FTC has pursued advertising agencies, fact-checking organizations, payment networks, and other intermediaries in an apparent effort to reshape the incentives that drive content moderation and editorial decision-making.

This strategy reflects an attempt to accomplish indirectly what the Supreme Court suggested government cannot do directly after Moody v. NetChoice: impose a state-preferred vision of viewpoint neutrality on private platforms exercising editorial discretion. Instead of limiting government involvement in speech markets, the FTC has often sought to wield government power against what the administration characterizes as “private censorship.” The result is not the end of government pressure on speech intermediaries, but a redirection of that pressure toward different targets and different forms of editorial and financial discretion.

A.     The FTC’s Campaign Against Advertisers and Fact-Checkers

FTC Chairman Andrew Ferguson publicly signaled his intention to combat alleged online censorship while still serving as an FTC commissioner, before President Donald Trump’s election in 2024. In a matter seemingly far removed from social-media censorship,[38] then-Commissioner Ferguson wrote:

We should address not just censorious conduct specifically, but also investigate the structural issues that may have given these platforms their power over Americans’ lives and speech in the first place. In particular, we must vigorously enforce the antitrust laws against any platforms found to be unlawfully limiting Americans’ ability to exchange ideas freely and openly. We must prosecute any unlawful collusion between online platforms, and confront advertiser boycotts which threaten competition among those platforms.[39]

That priority quickly moved to the forefront. In February 2025, the FTC requested public comments regarding “Technology Platform Censorship.”[40] The request sought information both about potential consumer harms arising from allegedly unfair or deceptive conduct by social-media platforms and about the motivations behind platform moderation decisions. One set of questions asked:

To what extent have platforms funded or collaborated with organizations, for-profit or non-profit, that advocated for or enabled censorship? Were such activities, such as advertising boycotts, designed to facilitate collusion on censorship?[41]

Later that year, the FTC distributed model warning letters to social-media platforms concerning alleged censorship and compliance with Section 5 of the FTC Act.[42]

After Moody v. NetChoice made clear that social-media platforms possess a First Amendment right to exercise editorial discretion over content moderation, the FTC appeared to shift its focus away from the platforms themselves and toward advertisers and media-monitoring organizations.

That shift became particularly evident in the FTC’s consent agreement approving Omnicom Group Inc.’s acquisition of Interpublic Group of Companies, Inc.—two of the world’s largest advertising agencies. The consent order prohibited the merged firm from:

1. Direct[ing] Advertisers’ advertising spend based on Covered Bases (other than as required by applicable laws);

2. Refus[ing] Advertisers’ requests to direct advertising spend to a Media Publisher based on Covered Bases (other than as required by applicable laws); or

3. Declin[ing] to deal with Advertisers based on Covered Bases (other than as required by applicable laws).[43]

The order defined “Covered Bases” to include:

(1) Political or ideological viewpoints (including viewpoints as to the veracity of news reporting or other politically or ideologically contested facts, such as their characterization as “misinformation,” “disinformation,” “bias,” or similar terms); (2) adherence to journalistic standards or ethics established or set by a Third Party; and/or (3) commitment or adherence to diversity, equity or inclusion (DEI), such as diverse ownership or casting.[44]

The apparent objective was not merely to regulate advertising agencies themselves, but to alter the incentives facing social-media platforms by constraining advertiser behavior.[45]

As discussed above, social-media companies operate as multisided platforms that must account for advertiser preferences. Brand-conscious businesses often do not want their advertisements appearing next to speech they regard as hateful, extremist, misleading, or otherwise objectionable. After Elon Musk restored numerous accounts previously banned by Twitter for alleged hate speech or misinformation, several major advertisers left the platform.[46] Media Matters subsequently published a report alleging that “X has an antisemitism problem,” documenting examples in which advertisements from major brands appeared next to white-nationalist and pro-Hitler content.[47]

X responded by filing an antitrust lawsuit against several major advertising agencies. The complaint alleged that the agencies colluded through the Global Alliance for Responsible Media (GARM) to organize a group boycott of X.[48] According to the complaint, individual advertisers lacked sufficient leverage to influence X’s advertising-placement or content-moderation practices independently, so they coordinated through GARM to increase their bargaining power and protect their underlying brand interests.

X also filed claims against Media Matters, including defamation allegations tied to the report.[49] Days after Musk announced on X that he intended to file a “thermonuclear lawsuit against Media Matters,”[50] Texas Attorney General Ken Paxton opened an investigation into the organization.[51] Missouri later initiated a similar investigation.[52]

On March 26, 2026, the U.S. District Court for the Northern District of Texas dismissed all antitrust claims in X’s suit. The court concluded that X had failed to plead antitrust injury:

To understand why these allegations do not amount to an antitrust claim, think of X’s injury in two ways: First, consider that the conspiracy benefits other social media companies that no longer must compete with X. Second, consider that the conspiracy benefits the advertisers who no longer compete with each other to buy X’s advertising space. Either way, no antitrust injury exists.[53]

Despite that ruling, the FTC filed a remarkably similar complaint against six major advertising agencies on April 15, 2026, alleging violations of both the Sherman Act and Section 5 of the FTC Act.[54] The litigation remains in its early stages, and factual differences may emerge between the FTC’s case and X’s private suit. At present, though, the FTC appears to be advancing substantially the same theory that the same federal court had already rejected.

The lawsuit therefore increasingly resembles an effort to weaponize federal law enforcement against advertisers whom the administration blames for encouraging greater content moderation on social-media platforms. The FTC is effectively attempting to influence the editorial discretion of social-media companies indirectly by reshaping the incentives created by the advertising side of the platform. By targeting advertisers, the agency appears to hope that platforms will face less pressure to remove speech perceived by advertisers as harmful or objectionable.

The same dynamic emerged in the government’s treatment of Media Matters and NewsGuard. While X’s lawsuit against Media Matters remains pending, Texas’ investigation largely collapsed after Media Matters argued successfully that the state’s civil investigative demand (CID) constituted retaliation against protected First Amendment activity. Both the U.S. District Court for the District of Columbia and the D.C. Circuit concluded that Texas likely engaged in unconstitutional retaliation against Media Matters because of its reporting on X.[55]

The D.C. Circuit described Media Matters as “the target[] of a government campaign of retaliation” and characterized the investigation as an “arguably bad faith investigation” targeting the organization’s “exercise of their First Amendment rights” by “imposing special burdens on their newsgathering activities and operation of their media company.”[56] The court therefore affirmed the preliminary injunction blocking enforcement of the CID. Likewise, the district court concluded that Missouri’s investigation targeted Media Matters “not for legitimate law enforcement purposes but instead for its protected First Amendment activities.”[57]

The FTC nevertheless issued its own CID against both Media Matters and NewsGuard on May 20, 2025. NewsGuard rates the reliability of online news sources and had long been criticized by conservatives and Trump-administration officials for its role in encouraging advertiser caution around allegedly unreliable or extremist content.[58]

The district court again granted a preliminary injunction in the Media Matters litigation, holding that “[t]his case presents a straightforward First Amendment violation.”[59] NewsGuard separately challenged the FTC’s CID on Feb. 26, 2026. The FTC ultimately ended its investigation on April 17, 2026, after securing a consent decree from advertising agencies agreeing no longer to use NewsGuard’s services.[60] On May 5, 2026, the FTC also settled with Media Matters and agreed to terminate its investigation and refrain from reissuing a CID.[61]

Like the FTC’s antitrust action against the advertising agencies, these investigations appear designed to punish organizations the administration believes encouraged advertisers to leave X and promoted stronger content moderation on social-media platforms. The FTC may frame these actions as efforts to combat censorship. In practice, though, the agency itself appears to be engaging in coercive conduct that raises serious First Amendment concerns.

B.     Jawboning Apple and Payment Networks

Chairman Andrew Ferguson has also relied on less formal tools than investigations or lawsuits to influence the practices of companies the administration views as contributing to online censorship. In recent months, he has sent warning letters to both Apple and major credit-card networks.

In his letter to Apple,[62] Ferguson attempted to “educate” the company about its obligations under Section 5 of the FTC Act as they relate to Apple News. Specifically, he wrote:

Recently, there have been reports that Apple News has systematically promoted news articles from left-wing news outlets and suppressed news articles from more conservative publications. Indeed, multiple studies have found that in recent months Apple News has chosen not to feature a single article from an American conservative-leaning news source, while simultaneously promoting hundreds of articles from liberal publications. These reports raise serious questions about whether Apple News is acting in accordance with its terms of service and its representations to consumers, as well as the reasonable consumer expectations of the tens of millions of Americans who use Apple News.[63]

The letter concludes with a warning:

Any act or practice by Apple News to suppress or promote news articles based on the perceived ideological or political viewpoint of the article or publication, if inconsistent with Apple’s terms of service or the reasonable expectations of consumers, may violate the FTC Act. I encourage you to conduct a comprehensive review of Apple’s terms of service and ensure that Apple News’curation of articles is consistent with those terms and representations made to consumers and, if it is not, to take corrective action swiftly.[64]

As Dan Gilman has noted, Apple’s terms of service make no promise of political neutrality in its curation practices.[65] That alone makes a Section 5 claim difficult to sustain, even before considering the First Amendment implications. Those constitutional concerns are substantial.

Ferguson’s letter itself acknowledges that “[t]he First Amendment protects the speech of Big Tech firms,” and that “[t]he FTC is not the speech police; we do not have authority to require Apple or any other firm to take affirmative positions on any political issue, nor to curate news offerings consistent with one ideology or another.”[66] But that concession only underscores the problem. In Moody v. NetChoice, the Supreme Court made clear that services like Apple News possess a First Amendment right to exercise editorial discretion when curating third-party content.[67] The government therefore lacks a legitimate interest in rebalancing the expressive product that results from those editorial judgments. Put differently, there is likely no constitutionally permissible way for the FTC to compel Apple to feature more conservative news sources.

The FTC’s conduct instead resembles the type of indirect censorship condemned by the Supreme Court in NRA v. Vullo[68] and Bantam Books v. Sullivan.[69] In both cases, the Court held that government officials may not pressure intermediaries to suppress or alter third-party speech. The FTC may argue that it is merely offering guidance and encouraging Apple to include more viewpoints rather than suppress them. After Moody, however, that distinction largely collapses. Apple’s editorial choices themselves receive First Amendment protection. The FTC’s actions therefore appear less like consumer protection and more like government pressure directed at expressive activity.

Ferguson has pursued a similar strategy with financial intermediaries.[70] He sent warning letters to PayPal, Stripe, Visa, and Mastercard regarding debanking and potential liability under Section 5 of the FTC Act.[71] As each letter states:

Companies that deplatform consumers or deny them access to financial products or services may violate the FTC Act if their actions are contrary to consumers’ reasonable expectations or if their practices cause substantial injury not reasonably avoidable by consumers and not outweighed by countervailing benefits to consumers or competition.[72]

The letters to Visa and Mastercard go further:

In recent years, there have been numerous publicly-reported examples of financial institutions denying their customers access to services due to their political or religious views. Equally concerning is the conduct of payments providers and payment networks that turn a blind eye when their financial institution members debank consumers for these reasons. Denying law-abiding consumers access to financial products and services due to their political or religious views, or facilitating the conduct of those who do, inflicts obvious and immeasurable harm on consumers and there are no readily apparent countervailing benefits to consumers or competition from such censorious action. Consumers cannot reasonably avoid this harm, particularly where, as is almost always the case, the First Amendment-protected activity that triggered the adverse action against them had no logical connection to, or material bearing on, their commercial relationship with the payment provider or network. The market power and dominance of these payment providers and network operators—and parallel conduct by other companies—also suggest consumers are unable reasonably to avoid such conduct.[73]

The FTC thus moves beyond telling Visa and Mastercard not to deny processing services directly. Instead, it effectively pressures them to police the account-closure decisions of the banks that use their payment networks—decisions the networks themselves generally cannot observe or control. The theory amounts to an expansive form of intermediary liability aimed at a multisided platform.

A similar theory appeared in Fleites v. Mindgeek, where plaintiffs sought to hold Visa liable under RICO and the Trafficking Victims Protection Reauthorization Act (TVPRA) for allegedly “facilitating” harmful conduct through transactions processed on Visa’s network.[74] In an amicus brief filed in that litigation,[75] the International Center for Law & Economics (ICLE) argued that imposing liability on a general-purpose payment network lacking both the information and operational control necessary to monitor individual transactions would be economically destructive and doctrinally unsound. As ICLE explained:

Visa has only the most coarse and limited means of interposing itself between [merchants] and [their] users in order to ‘avert misconduct,’ as well as extremely limited access to the transaction-specific information on which it would need to act in the first place…. The only form of control that Visa can exert in this context is of the most general sort: if made aware of illegal activity or other contractual violations to its terms of service, Visa can suspend processing activity.[76]

In other words, payment networks possess only a blunt instrument: they can terminate processing relationships entirely. They lack a “scalpel” that would allow them to supervise or override individual account decisions made by banks such as Chase or Bank of America. Nor do they possess contractual mechanisms enabling them to intervene in those customer relationships directly.

Chairman Ferguson’s letters effectively demand that payment networks create precisely those mechanisms by imposing new obligations on thousands of issuing banks. The result would deputize payment networks to regulate bank-level customer relationships throughout the financial system. Section 5 of the FTC Act has never been understood to impose such sweeping intermediary obligations.

Even on the FTC’s own terms, the theory faces serious problems. An unfairness claim under Section 5 requires a showing that any consumer harm is not outweighed by countervailing benefits to consumers or competition. Here, the relevant countervailing benefit is avoiding the immense costs associated with requiring payment networks to monitor and police banks’ customer relationships. As ICLE argued in its Fleites amicus brief:

The extension of liability under such laws to a general-purpose service provider like Visa would require it to raise the processing costs of—or curtail entirely—an enormous swath of perfectly valid, crucial transactions throughout the entire economy.[77]

Much like the FTC’s antitrust suit against advertising agencies and its investigations into Media Matters and NewsGuard, the agency’s pressure campaign against payment networks appears to rest on a legal theory that courts have already rejected in closely analogous contexts. Although Section 5 differs doctrinally from the private claims asserted in Fleites, both theories ultimately depend on the same flawed assumption: that payment networks can regulate downstream conduct without imposing enormous costs on the broader ecosystem in which they operate as multisided platforms.

Concerns about politically motivated debanking are real, as Operation Choke Point illustrates. The answer, however, is not to repurpose the same coercive tools against payment networks and processors in the name of promoting free speech. If the experience of the Durbin Amendment offers any lesson, the likely result of such interventions is higher fees and costs passed through to consumers by payment networks, banks, and merchants.[78]

IV.   The FCC and Broadcast Jawboning

FCC Chairman Brendan Carr has used his office to amplify many of President Donald Trump’s longstanding criticisms of the media. In several instances, those criticisms have been coupled with public statements suggesting possible regulatory consequences for broadcasters whose programming or news coverage the administration disfavors.

Those statements carry unusual weight because the FCC exercises substantial authority over broadcast-license holders through the Communications Act’s expansive “public interest” standard. Unlike most other media companies, broadcasters remain subject to license renewal, transfer review, and potential enforcement actions tied directly to the content they air. As a result, when the FCC chairman publicly signals that particular speech, editorial decisions, or programming choices may create regulatory risk, broadcasters have strong incentives to respond.

The sections below examine how Chairman Carr has invoked that authority in disputes involving late-night comedy, alleged “fake news,” and news-distortion claims. In each instance, the administration has relied less on formal censorship than on indirect pressure directed at multisided speech platforms that depend on continued government approval to operate. These episodes illustrate how government “jawboning” can shape editorial decisions even without formal enforcement actions—and how the FCC’s unique authority over broadcasters creates opportunities for political coercion that would likely be unconstitutional in nearly any other media context.

A.     The FCC, Jimmy Kimmel, and Broadcast Coercion

On Sept. 15, 2025, ABC late-night host Jimmy Kimmel made comments about the alleged killer of Charlie Kirk.[79] Soon afterward, FCC Chairman Brendan Carr appeared on a conservative podcast and encouraged local ABC affiliates that depend on FCC broadcast licenses to “push back” in response to Kimmel’s remarks.[80] Carr noted that broadcasters hold “license[s] granted by us at the FCC that come[] with it an obligation to operate in the public interest,” adding:

We can do this the easy way or the hard way. These companies can find ways to change conduct to take actions, frankly on Kimmel, or there’s going to be additional work for the FCC ahead.[81]

The implication was difficult to miss. Carr appeared to suggest that the FCC could use its authority over broadcast licenses—including fines, renewal proceedings, or investigations into alleged news distortion—if affiliates failed to respond to Kimmel’s comments.

Within hours, Nexstar and Sinclair, which own many ABC affiliates, decided to preempt Jimmy Kimmel Live! from their programming schedules.[82] ABC executives reportedly suspended Kimmel not because they believed his remarks crossed a legal or ethical line, but because they feared retaliation from the Trump administration:

In the hours leading up to the decision to pull Kimmel, two sources familiar with the matter say, senior executives at ABC, its owner Disney, and affiliates convened emergency meetings to figure out how to minimize the damage. Multiple execs felt that Kimmel had not actually said anything over the line, the two sources say, but the threat of Trump administration retaliation loomed.[83]

Chairman Carr denied responsibility, arguing that the affiliates and Disney merely responded to market forces rather than FCC pressure. According to Carr, “[i]f you look at the evidence, the express statements by every single company involved, from Nexstar to Sinclair to Disney, as recently as last week, is that they made these business decisions on their own.”[84]

That argument closely resembles the rationale the Supreme Court adopted in Murthy v. Missouri when it concluded that social-media platforms had “independent incentives to moderate content and often exercised their own judgment.”[85] Kimmel’s situation, however, appears much more closely tied in time and proximity to explicit government threats than the moderation decisions at issue in Murthy. Even so, after Murthy, it remains unclear whether Kimmel himself would possess standing to challenge the FCC’s conduct successfully.

Assuming standing could be established, the situation bears a striking resemblance to Bantam Books v. Sullivan.[86] In Bantam Books, the Rhode Island Commission to Encourage Morality in Youth lacked direct authority to suppress publications, but used threats of legal sanctions and informal coercion to pressure distributors into removing “objectionable” material.[87] The commission notified distributors on official stationery that particular publications had been deemed objectionable and implied that continued distribution could lead to prosecution.[88]

Carr’s statements likewise carried an unmistakable warning:

I think that it’s really sort of past time that a lot of these licensed broadcasters themselves push back on Comcast and Disney and say, “Listen, we are going to preempt, we are not going to run Kimmel anymore, until you straighten this out because we, we licensed broadcaster, are running the possibility of fines or license revocation from the FCC if we continue to run content that ends up being a pattern of news distortion”… We can do this the easy way or the hard way… These companies can find ways to change conduct and take action, frankly, on Kimmel or there’s going to be additional work for the FCC ahead.[89]

The central question is whether those statements crossed the constitutional line separating permissible government guidance from coercion designed to induce censorship.

A second Jimmy Kimmel controversy emerged on April 24, 2026, when Kimmel joked during a mock White House Correspondents’ Dinner that Melania Trump looked like an “expectant widow.”[90] Two days later, an armed individual allegedly attempted to enter the actual White House Correspondents’ Dinner with the apparent intention of assassinating President Donald Trump.[91] First Lady Melania Trump and President Trump both publicly condemned Kimmel on social media and called on Disney and ABC to fire him.[92]

The following day, the FCC announced that it was investigating Disney’s diversity, equity, and inclusion (DEI) policies as potential “unlawful discrimination” under FCC rules. The commission also accelerated review of ABC’s broadcast licenses under the public-interest standard, giving ABC 30 days to file license-renewal applications for all licensed television stations.[93] At the time of this writing, it remains unclear how the controversy will ultimately affect Kimmel or ABC, or whether litigation will follow. The timing nevertheless again suggests a close relationship between disfavored speech and subsequent government action.

The problem for Kimmel and ABC is that the FCC possesses unusually broad authority over broadcasters. The commission may review licenses and license transfers under the amorphous “public interest” standard. Courts have upheld FCC authority to impose fines, revoke licenses, deny transfers, and regulate issues ranging from political-response obligations to obscenity and alleged news distortion. The Supreme Court has thus allowed the FCC to act as a kind of speech regulator for broadcasters in ways that would be unconstitutional if applied to nearly any other medium.

That distinction separates this controversy from Bantam Books. The Rhode Island commission could merely recommend prosecution. The FCC, by contrast, possesses direct regulatory authority over broadcast licenses. The FCC is therefore less like an outside pressure group and more like a police officer warning that legal consequences may follow.

As the Court explained in Bantam Books:

We do not hold that law enforcement officers must renounce all informal contacts with persons suspected of violating valid laws prohibiting obscenity. Where such consultation is genuinely undertaken with the purpose of aiding the distributor to comply with such laws and avoid prosecution under them, it need not retard the full enjoyment of First Amendment freedoms. But that is not this case. The appellees are not law enforcement officers; they do not pretend that they are qualified to give or that they attempt to give distributors only fair legal advice. Their conduct as disclosed by this record shows plainly that they went far beyond advising the distributors of their legal rights and liabilities. Their operation was in fact a scheme of state censorship effectuated by extralegal sanctions; they acted as an agency not to advise but to suppress.[94]

Kimmel could argue that Carr’s comments similarly “went far beyond advising” broadcasters regarding their legal obligations and instead constituted “a scheme of state censorship.” The FCC, by contrast, would likely argue that Carr merely informed broadcasters of their regulatory responsibilities under laws the agency is authorized to enforce. A court would therefore need to determine whether the statements amounted to unconstitutional coercion or merely lawful regulatory guidance.

The FCC’s unusually broad authority over broadcasters rests on Supreme Court precedents treating broadcast media differently from other forms of expression because broadcasters rely on scarce public spectrum. In Red Lion Broadcasting Co. v. FCC[95] and FCC v. Pacifica Foundation,[96] the Court emphasized that government allocation of broadcast frequencies justified regulatory authority that would be impermissible elsewhere. As the Court stated in Pacifica:

[A]lthough other speakers cannot be licensed except under laws that carefully define and narrow official discretion, a broadcaster may be deprived of his license and his forum if the Commission decides that such an action would serve “the public interest, convenience, and necessity.”[97]

That “public interest” standard is extraordinarily broad and explicitly permits review of speech content. In NBC v. United States,[98] the Court explained:

[T]he Commission’s powers are not limited to the engineering and technical aspects of regulation of radio communication… merely to supervision of the traffic. It puts upon the Commission the burden of determining the composition of that traffic.[99]

In other words, the FCC may consider the content carried by broadcasters when determining whether licensees are operating in the public interest.

That authority places local broadcasters like Nexstar and Sinclair—and affiliates directly owned by Disney/ABC—in a uniquely vulnerable position. Unlike most other media companies, broadcasters must constantly consider whether the FCC will view their programming decisions favorably under the public-interest standard. When the FCC chairman publicly suggests that continuing to air Jimmy Kimmel could create regulatory problems, broadcasters have strong incentives to respond.

Whether Red Lion and Pacifica remain good law is increasingly uncertain. The factual assumptions underlying those decisions no longer reflect modern media markets. Broadcasters no longer possess the dominance they held in the 1960s and 1970s, when viewers primarily relied on ABC, NBC, CBS, and PBS. Cable television, satellite providers, streaming services, internet-video platforms, podcasts, and social media now compete aggressively for audience attention. Even traditional broadcast content is increasingly consumed through cable, satellite, or internet distribution rather than over-the-air antennas.

The modern media ecosystem therefore bears little resemblance to the world in which Red Lion and Pacifica were decided. Treating ABC differently from CNN or Netflix because ABC content can theoretically still be accessed through “rabbit ears” increasingly makes little practical or constitutional sense.

What remains clear, however, is that the FCC’s threats weaponized the commission’s authority over broadcast-license holders and contributed, at least temporarily, to the suppression of Kimmel’s speech. Local affiliates dependent on FCC licenses became the pressure point through which the government exerted influence. That pressure ultimately affected not only the affiliates themselves, but ABC and Disney as national broadcasters. Like social-media companies and payment networks, broadcasters operate as multisided platforms. Government threats directed at those platforms can therefore strongly influence both the speech they carry and the business relationships they maintain.

B.     Broadcast Licenses and ‘Fake News’ Policing

The Trump administration has signaled a willingness to combat so-called “fake news” through the FCC’s little-used and rarely enforced news-distortion policy.[100] Chairman Carr recently amplified that position on social media by reposting a Truth Social statement from President Donald Trump criticizing media coverage of the conflict in Iran and warning broadcasters:

Broadcasters that are running hoaxes and news distortions – also known as the fake news – have a chance now to correct course before their license renewals come up. The law is clear. Broadcasters must operate in the public interest, and they will lose their licenses if they do not.[101]

As in the Jimmy Kimmel controversies, Carr appears to be leveraging the FCC’s authority over broadcast-license holders to pressure broadcasters regarding editorial judgments and news coverage.

Section 309(a) of the Communications Act authorizes the FCC to grant broadcast licenses only when doing so serves “the public interest, convenience, and necessity.”[102] The FCC’s news-distortion policy emerged from that broad public-interest authority, which permits the agency to review certain content-related conduct by broadcasters. On its face, such authority sits uneasily with the First Amendment. The Supreme Court nevertheless upheld special regulatory authority over broadcasters by treating broadcasting differently from other forms of media.

As discussed above, the Court justified this distinction largely on spectrum scarcity grounds. Because the government allocates limited broadcast frequencies, it may impose conditions on broadcast licensees that would plainly violate the First Amendment in other contexts. In Red Lion Broadcasting Co. v. FCC, for example, the Court upheld the fairness doctrine as applied to a broadcaster that refused to provide reply time to an individual it had “personally attacked.”[103]

The fairness doctrine and the FCC’s news-distortion policy rested on the same underlying rationale:

A licensee would be abusing his position as a public trustee . . . were he to withhold from expression over his facilities relevant news or facts concerning a controversy or to slant or distort the presentation of such news.[104]

Over time, however, that rationale weakened considerably. In 1987, the FCC concluded that the fairness doctrine “on its face, violates the First Amendment and contravenes the public interest.”[105] In 2011, the agency formally repealed the underlying rules.[106] The news-distortion policy technically remains in place, but largely as a relic. The FCC has rarely enforced it and has not attempted to do so in more than three decades.[107]

Even assuming the policy remains constitutionally valid, the allegations at issue here fall well short of the standard required for enforcement.

Because of the serious First Amendment concerns involved, the FCC and reviewing courts have consistently emphasized that the news-distortion policy has “extremely limited scope.”[108] A viable claim requires proof that: (1) the broadcaster deliberately intended to distort or mislead; and (2) the distortion concerned a significant event rather than a minor or incidental aspect of the reporting.[109]

The intent requirement imposes an especially demanding burden. It is “not enough to dispute the accuracy of a news report… or to question the legitimate editorial decisions of the broadcaster.”[110] Instead, a complainant must provide “extrinsic evidence”—evidence beyond the broadcast itself—such as internal directives, outtakes, or evidence of bribery demonstrating intentional distortion.[111]

No such evidence has been alleged here. Carr’s post relied entirely on a screenshot of President Trump’s Truth Social criticism of allegedly misleading headlines regarding the Iran conflict. That accusation fails on multiple levels. The FCC’s news-distortion policy does not apply to newspapers or their online equivalents. Even if it did, generalized accusations of bias or misleading framing would not constitute the type of extrinsic evidence necessary to establish deliberate distortion.

Past news-distortion cases illustrate how narrow the doctrine actually is. Many involved broadcasters staging or reenacting events in ways that materially altered the substance of a report.[112] Even in those cases, however, the FCC distinguished between material deception and merely “incidental” production choices.[113] Nothing remotely comparable has been alleged here.

Carr’s comments also raise an independent concern. They go beyond merely describing the law and instead suggest prejudgment by the FCC chairman himself. His repeated references to “legacy media” and “fake news” imply that the relevant broadcasters have already engaged in wrongdoing and that formal proceedings merely remain to be initiated. That posture could itself complicate any future enforcement effort.

Ultimately, Carr’s invocation of the FCC’s dormant news-distortion policy appears less like neutral regulatory oversight and more like an attempt to pressure broadcasters into changing their editorial decisions and news coverage. That approach resembles the same type of government jawboning and indirect censorship the administration claims to oppose. It is also far from clear that any resulting enforcement action would survive judicial review, either because the allegations fail to satisfy the FCC’s own standards or because the underlying news-distortion policy itself no longer comports with modern First Amendment doctrine.

V.     Limiting the Levers of Speech Control

As explained above, multisided platforms—including social-media platforms, broadcasters, advertising networks, and payment networks—are tempting targets for government officials seeking to influence speech. Because these platforms operate as intermediaries, regulators can pressure them directly or attack one side of the platform to reshape incentives across the whole ecosystem.

That vulnerability stems in large part from the broad authority and wide discretion agencies like the FTC and FCC possess under existing law. President Donald Trump’s executive orders recognize that such discretion can be abused to weaponize the law and suppress speech. The problem is that the administration has too often used those same tools to pursue its own preferred speech outcomes.

Courts have pushed back against some of these efforts through First Amendment-retaliation claims. But after Murthy, standing doctrine may prevent many coercion claims from reaching the merits, especially when the alleged censorship involves multisided platforms with independent economic incentives. In cases involving the FCC’s authority over broadcast-license holders or the FTC’s authority over unfair or deceptive practices, existing Supreme Court precedent either grants agencies broad discretion or leaves key First Amendment questions unresolved.

At a minimum,[114] courts should reconsider whether the rationales underlying Red Lion and Pacifica still make sense in the modern media marketplace. As Justice Clarence Thomas wrote in his concurrence in FCC v. Fox Television Stations,[115] “instead of looking to first principles to evaluate the constitutional question, the Court relied on a set of transitory facts,” which led it to adopt “a legal rule that lacks any textual basis in the Constitution.”[116] Even if those assumptions once had force, “dramatic technological advances have eviscerated the factual assumptions underlying those decisions.”[117]

Justice Thomas is not alone. Justice Ruth Bader Ginsburg later cited his concurrence and wrote that “[t]ime, technological advances, and the Commission’s untenable ruling in the cases now before the Court show why Pacifica bears reconsideration.”[118]

Courts should ask a simple question: Do First Amendment protections really depend on whether consumers can hypothetically access content through an antenna? The answer—grounded in law, economics, and common sense—is no. Red Lion and Pacifica are outliers that permit government control over private speech that would be intolerable in nearly any other context. Overruling or narrowing them would not create new rights. It would restore equal First Amendment protection across media, regardless of the transmission technology speakers use.

If courts and the executive branch fail to rein in these practices, Congress should step in. Recent Supreme Court decisions have underscored that Congress—not agencies—must define the limits of administrative power.[119] Congress could begin by revisiting the FTC’s Section 5 authority, including its power to issue civil investigative demands. It should also reconsider the FCC’s authority over broadcast-license holders and, more fundamentally, the legal architecture of spectrum allocation.

The executive orders on federal censorship and weaponization have not stopped the FTC and FCC from targeting perceived enemies of the Trump administration. They have instead exposed the deeper problem: so long as agencies retain broad, open-ended discretion over speech-adjacent markets, officials will be tempted to use that discretion to shape public discourse. Protecting free speech requires more than changing which officials control the levers of power. It requires limiting those levers in the first place.

[1] Exec. Order No. 14,149, 90 Fed. Reg. 8,243 (Jan. 20, 2025) [hereinafter Speech EO].

[2] Id.

[3] See Exec. Order No. 14,147, 90 Fed. Reg. 8,235 (Jan. 20, 2025) [hereinafter Weaponization EO] (ordering measures to end the “weaponization” of the federal government).

[4] Murthy v. Missouri, 603 U.S. 43 (2024).

[5] Nat’l Rifle Ass’n of Am. v. Vullo, 602 U.S. 175 (2024).

[6] Murthy, supra note 4, at 79 (Alito, J., dissenting).

[7] Speech EO, supra note 1.

[8] Nat’l Rifle Ass’n of Am. v. Vullo, supra note 5, at 190.

[9] See Ohio v. Am. Express Co., 585 U.S. 529 (2018).

[10] Id. at 535.

[11] Id. at 536-37.

[12] Id. at 537.

[13] For a more detailed treatment, see Sperry, Knowledge and Decisions in the Information Age, supra note 9; Sperry, An L&E Defense of the First Amendment’s Protection of Private Ordering, supra note 9.

[14] See Ben Sperry, The Market for Speech Governance: Free Speech Strikes Back?, Truth on the Mkt. (May 4, 2022), https://truthonthemarket.com/2022/05/04/the-market-for-speech-governance-free-speech-strikes-back; Ben Sperry, Meta’s Announcement: The Return of Online Free Speech?, Truth on the Mkt. (Jan. 9, 2025), https://truthonthemarket.com/2025/01/09/metas-announcement-the-return-of-online-free-speech.

[15] See Moody v. NetChoice, LLC, 603 U.S. 707 (2024).

[16] See Staff Report, 113th Cong., The Department of Justice’s “Operation Choke Point”: Illegally Choking Off Legitimate Business (May 29, 2014), https://oversight.house.gov/wp-content/uploads/2014/05/Staff-Report-Operation-Choke-Point1.pdf.

[17] See id. at 7-10.

[18] For more on how intermediary liability for credit-card networks can restrict the processing of lawful transactions and, in turn, access to speech, see Amicus Brief of the International Center for Law & Economics in Support of Visa, Inc.’s Motion to Dismiss at 4–12, Fleites v. Mindgeek, No. 2:21-cv-04920-CJC-ADS (C.D. Cal. Jan. 17, 2022), https://laweconcenter.org/wp-content/uploads/2022/02/2022-01-17-Fleites-Amicus-Br-FILED.pdf [hereinafter ICLE Fleites Amicus].

[19] See Final Staff Report, U.S. House Comm. on Fin. Servs., Operation Choke Point 2.0: Biden’s Debanking of Digital Assets (Dec. 2025), https://financialservices.house.gov/uploadedfiles/2025-11-30_–_fsc_debanking_report_final_1.pdf.

[20] See, e.g., Jathon Sapsford, JPMorgan Targeted by Republican States Over Accusations of Religious Bias, Wall St. J. (May 13, 2023), https://www.wsj.com/politics/jpmorgan-targeted-by-republican-states-over-accusations-of-religious-bias-903c8b26.

[21] See U.S. House Comm. on Fin. Servs., Operation Choke Point 2.0: Biden’s Debanking of Digital Assets, supra note 20, at 4–6.

[22] See Twitter Files, Wikipedia, https://en.wikipedia.org/wiki/Twitter_Files (last visited Apr. 23, 2026).

[23] The following discussion adapts Ben Sperry, What Does Murthy v. Missouri Mean for Online Speech?, Truth on the Mkt. (June 26, 2024), https://truthonthemarket.com/2024/06/26/what-does-murthy-v-missouri-mean-for-online-speech.

[24] Murthy, supra note 4, at 58.

[25] Id. at 59.

[26] Id. at 60.

[27] Id. at 68.

[28] Id. at 95-96 (Alito, J., dissenting).

[29] Id. at 71-72.

[30] Id. at 96 (Alito, J., dissenting).

[31] Id.

[32] Id. at 73 (emphasis in original).

[33] Speech EO, supra note 1.

[34] Weaponization EO, supra note 3. A later executive order, issued in response to allegations surrounding “Operation Choke Point 2.0,” similarly sought to prohibit politically motivated debanking. See Exec. Order No. 14,331, 90 Fed. Reg. 38,925 (Aug. 7, 2025).

[35] Speech EO, supra note 1.

[36] Id.

[37] Weaponization EO, supra note 3.

[38] See Complaint for Permanent Injunction, Monetary Judgment, and Other Relief at 1–2, FTC v. 1661, Inc. d/b/a GOAT, No. 2:24-cv-10329 (C.D. Cal. Dec. 2, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/GOATComplaint.pdf (alleging violations of Section 5(a) of the Federal Trade Commission Act and the Mail, Internet, or Telephone Order Merchandise Rule arising from GOAT’s failure to timely ship merchandise, provide required delay or cancellation options, issue prompt refunds, and honor buyer-protection representations).

[39] Concurring Statement of Commissioner Andrew N. Ferguson, FTC v. 1661, Inc. d/b/a GOAT, Matter No. 2223016 (Dec. 2, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-goat-concurrence.pdf.

[40] Request for Public Comments Regarding Technology Platform Censorship, Fed. Trade Comm’n (Feb. 19, 2025), https://www.ftc.gov/policy/public-comments/request-public-comments-regarding-technology-platform-censorship.

[41] Id. at 3.

[42] See, e.g., Model Letter Sent to Tech Companies from Andrew N. Ferguson, Chairman, Fed. Trade Comm’n (Aug. 21, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/ftc-unfair-security-letter-ferguson.pdf.

[43] Decision and Order, In re Omnicom Group Inc. & The Interpublic Group of Cos., Inc., Docket No. C-4823 (Fed. Trade Comm’n Sept. 26, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/OmnicomOrder.pdf.

[44] Id.

[45] For more on the First Amendment problems raised by enforcing this order, see Daniel J. Gilman & Ben Sperry, Is There an Empty Set at the Intersection of Antitrust and Content Moderation?, 11 Concurrences 39, 46–48 (Nov. 3, 2025), https://laweconcenter.org/wp-content/uploads/2025/11/Is-There-an-Empty-Set-at-the-Intersection-of-Antitrust-and-Content-Moderation.pdf.

[46] See Kate Conger, Tiffany Hsu & Ryan Mac, Elon Musk’s Twitter Faces Exodus of Advertisers and Executives, N.Y. Times (Nov. 1, 2022), https://www.nytimes.com/2022/11/01/technology/elon-musk-twitter-advertisers.html (“[A]dvertisers—which provide about 90 percent of Twitter’s revenue—are increasingly grappling with Mr. Musk’s ownership of the platform” because he “said he would loosen Twitter’s content rules, which could lead to a surge in misinformation and other toxic content.”); Ryan Mac & Tiffany Hsu, Twitter’s US Ad Sales Plunge 59% as Woes Continue, N.Y. Times (June 5, 2023), https://www.nytimes.com/2023/06/05/technology/twitter-ad-sales-musk.html (“Six ad agency executives who have worked with Twitter said their clients continued to limit spending on the platform” due to “concerns about the persistent presence of misleading and toxic content on the platform.”).

[47] Ethan Collier & Natalie Mathes, X Has an Antisemitism Problem, Media Matters (Sept. 8, 2023), https://www.mediamatters.org/twitter/x-has-antisemitism-problem; see also Eric Hananoki, As Musk Endorses Antisemitic Conspiracy Theory, X Has Been Placing Ads for Apple, Bravo, IBM, Oracle, and Xfinity Next to Pro-Nazi Content, Media Matters (Nov. 16, 2023), https://www.mediamatters.org/twitter/musk-endorses-antisemitic-conspiracy-theory-x-has-been-placing-ads-apple-bravo-ibm-oracle.

[48] See X Corp. v. World Fed’n of Advertisers, 2026 WL 833900, at *5–7 (N.D. Tex. Mar. 26, 2026).

[49] See, e.g., Associated Press, Musk’s X Sues Media Matters Over Its Report on Ads Next to Hate Groups’ Posts, NPR (Nov. 21, 2023), https://www.npr.org/2023/11/21/1214338766/musks-x-sues-media-matters-over-its-report-on-ads-next-to-hate-groups-posts.

[50] Elon Musk (@elonmusk), X (Nov. 18, 2023, 2:01 AM EST), https://x.com/elonmusk/status/1725771191644758037.

[51] See Press Release, Att’y Gen. of Tex., Attorney General Ken Paxton Opens Investigation into Media Matters for Potential Fraudulent Activity (Nov. 20, 2023), https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-opens-investigation-media-matters-potential-fraudulent-activity.

[52] See Press Release, Mo. Att’y Gen., Attorney General Bailey Notifies Media Matters of Pending Investigation (Dec. 11, 2023), https://ago.mo.gov/attorney-general-bailey-notifies-media-matters-of-pending-investigation.

[53] X Corp., supra note 49, at *25.

[54] Complaint, FTC v. Dentsu, No. 4:26-cv-469 (N.D. Tex. Apr. 15, 2026), https://www.ftc.gov/system/files/ftc_gov/pdf/Dentsu-Complaint.pdf.

[55] Media Matters for Am. v. Paxton, 732 F. Supp. 3d 1 (D.D.C. 2024); Media Matters for Am. v. Paxton, 138 F.4th 563 (D.C. Cir. 2025).

[56] Media Matters for Am., supra note 56, at 581.

[57] Media Matters for Am. v. Bailey, 2024 WL 3924573, at *15 (D.D.C. Aug. 23, 2024).

[58] Trump-administration officials have long criticized NewsGuard and its perceived role in online “censorship.” See Letter from Brendan Carr, Comm’r, Fed. Commc’ns Comm’n, to Big Tech Executives (Nov. 13, 2024), https://docs.fcc.gov/public/attachments/DOC-407732A1.pdf (describing NewsGuard as part of a broader “censorship cartel” and arguing that its ratings system, combined with advertising-industry partnerships, effectively suppresses disfavored news outlets).

[59] Media Matters for Am. v. FTC, 2025 WL 2378009, at *5 (D.D.C. Aug. 15, 2025).

[60] See, e.g., Stephen Dinan, Federal Trade Commission Shuts Down Investigation of NewsGuard, Wash. Times (Apr. 17, 2026), https://www.washingtontimes.com/news/2026/apr/17/federal-trade-commission-shuts-investigation-newsguard.

[61] See, e.g., Ted Johnson, FTC Settles With Media Matters After Watchdog Group Claimed Agency Retaliation for Article on Elon Musk’s X, Deadline (May 5, 2026), https://deadline.com/2026/05/media-matters-ftc-settlement-elon-musk-1236881263.

[62] Office of the Chairman of the Fed. Trade Comm’n, Letter to Apple re Potential FTC Act Violations Related to Suppressing or Promoting Featured News Articles for Political Reasons (Feb. 12, 2026), https://www.ftc.gov/system/files/ftc_gov/pdf/apple-news-warning-letter.pdf [hereinafter Apple Warning Letter].

[63] Id. at 2.

[64] Id. at 3.

[65] See Daniel J. Gilman, Speech, Section 5, and Some Curious Scribbling: A First Amendment Story, Truth on the Mkt. (Mar. 25, 2026), https://truthonthemarket.com/2026/03/25/speech-section-5-and-some-curious-scribbling-a-first-amendment-story.

[66] Apple Warning Letter, supra note 63, at 2, 3.

[67] Moody, supra note 16, at 731 (“[T]he First Amendment offers protection when an entity engaging in expressive activity, including compiling and curating others’ speech, is directed to accommodate messages it would prefer to exclude.”); id. at 741 (“[A] State may not interfere with private actors’ speech to advance its own vision of ideological balance…”); see also Gilman & Sperry, Is There an Empty Set at the Intersection of Antitrust and Content Moderation?, supra note 46, at 45.

[68] Nat’l Rifle Ass’n of Am. v. Vullo, supra note 5.

[69] Bantam Books, Inc. v. Sullivan, 372 U.S. 58 (1963).

[70] Much of the following discussion adapts Geoffrey Manne (@geoffmanne), X (Mar. 27, 2026, 4:35 PM EST), https://x.com/geoffmanne/status/2037629655390556318.

[71] See Press Release, Fed. Trade Comm’n, FTC Chairman Andrew N. Ferguson Issues Warning Letters to CEOs of PayPal, Stripe, Visa and Mastercard About Debanking American Consumers (Mar. 26, 2026), https://www.ftc.gov/news-events/news/press-releases/2026/03/ftc-chairman-andrew-n-ferguson-issues-warning-letters-ceos-paypal-stripe-visa-mastercard-about-debanking-american-consumers.

[72] See, e.g., Office of the Chairman of the Fed. Trade Comm’n, Letter to Visa re Potential FTC Act Violations Related to Debanking American Consumers at 2 (Mar. 26, 2026), https://www.ftc.gov/system/files/ftc_gov/pdf/visa-debanking-letter.pdf.

[73] See id. at 2.

[74] Complaint, Fleites, supra note 19.

[75] ICLE Fleites Amicus, supra note 19.

[76] Id. at 15, 17.

[77] Id. at 17.

[78] Todd J. Zywicki, Geoffrey A. Manne & Julian Morris, Unreasonable and Disproportionate: How the Durbin Amendment Harms Poorer Americans and Small Businesses, Int’l Ctr. for L. & Econ. (Apr. 25, 2017), https://laweconcenter.org/images/articles/icle-durbin_update_2017_final.pdf.

[79] Much of the following discussion adapts Ben Sperry, Kimmel, Coercion, and the Public Interest Standard: The Problem of Boundless Government Power, Truth on the Mkt. (Sept. 19, 2025), https://truthonthemarket.com/2025/09/19/kimmel-coercion-and-the-public-interest-standard-the-problem-of-boundless-government-power.

[80] Benny Johnson (@bennyjohnson), X (Sept. 17, 2025, 1:01 PM EST), https://x.com/bennyjohnson/status/1968359685045838041.

[81] Id.

[82] Charisma Madarang, Asawin Suebsaeng & Andrew Perez, ‘Jimmy Kimmel Live!’ Pulled ‘Indefinitely’ by ABC Over Charlie Kirk Comments, Rolling Stone (Sept. 17, 2025), https://www.rollingstone.com/tv-movies/tv-movie-news/jimmy-kimmel-out-abc-charlie-kirk-comments-1235430078.

[83] Id.

[84] Caitlin Huston, FCC Chair Deflects Responsibility on Kimmel, Says Agency Is Not Independent, Hollywood Reporter (Dec. 17, 2025), https://www.hollywoodreporter.com/business/digital/fcc-chair-deflects-responsibility-kimmel-says-agency-is-not-independent-1236453201.

[85] Murthy, supra note 4, at 60.

[86] Bantam Books, supra note 70.

[87] Id. at 67.

[88] Id. at 61.

[89] Johnson, supra note 81.

[90] See Jimmy Kimmel Roasts Trump & His MAGA Minions at Our Alternative White House Correspondents’ Dinner, Jimmy Kimmel Live, at 8:09 (YouTube Apr. 24, 2026), https://youtu.be/GRjKhsJc95o?si=YzKbrVwFoaKGl-vM&t=489.

[91] See, e.g., Michael Luciano, Jimmy Kimmel Scoffs at Melania Trump for Accusing Him of ‘Violent Rhetoric,’ Tells Her, ‘Have a Conversation With Your Husband About It’, Mediaite (Apr. 28, 2026), https://www.mediaite.com/media/tv/jimmy-kimmel-scoffs-at-melania-trump-for-accusing-him-of-violent-rhetoric-tells-her-have-a-conversation-with-your-husband-about-it.

[92] See First Lady Melania Trump (@FLOTUS), X (Apr. 27, 2026, 10:19 AM), https://x.com/FLOTUS/status/2048769128513585618; Donald J. Trump (@realDonaldTrump), Truth Social (Apr. 27, 2026, 1:26 PM), https://truthsocial.com/@realDonaldTrump/posts/116477838570626860.

[93] Order, In re The Walt Disney Co., Fed. Commc’ns Comm’n (Apr. 26, 2026), https://docs.fcc.gov/public/attachments/DA-26-416A1.pdf.

[94] Bantam Books, supra note 70, at 71–72.

[95] Watts v. United States, 395 U.S. 367 (1969).

[96] FCC v. Pacifica Found., 438 U.S. 726 (1978).

[97] Id. at 748.

[98] Murdock v. Pennsylvania, 319 U.S. 190 (1943).

[99] Id. at 215-16.

[100] Much of the following discussion adapts Ben Sperry & Jeffrey Westling, The FCC’s Sleeping Power Over the Press, Truth on the Mkt. (Mar. 17, 2026), https://truthonthemarket.com/2026/03/17/the-fccs-sleeping-power-over-the-press.

[101] Brendan Carr (@BrendanCarrFCC), X (Mar. 14, 2026, 12:24 PM EST), https://x.com/BrendanCarrFCC/status/2032855414233047172.

[102] 47 U.S.C. § 309.

[103] Red Lion Broad. Co. v. FCC, 395 U.S. 367, 372 (1969).

[104] Report of the Commission, In re Editorializing by Broadcast Licensees, Docket No. 8516 (Fed. Commc’ns Comm’n 1949).

[105] Memorandum Opinion and Order, In re Complaint of Syracuse Peace Council, FCC 87-266 (Fed. Commc’ns Comm’n Aug. 6, 1987).

[106] See 76 Fed. Reg. 55,817 (Sept. 9, 2011).

[107] See Jon Brodkin, The Speech Police: Chairman Brendan Carr and the FCC’s News Distortion Policy, Ars Technica (Apr. 7, 2025), https://arstechnica.com/tech-policy/2025/04/trumps-fcc-chair-invokes-rarely-enforced-news-distortion-policy-to-punish-media (“The one post-1982 finding of distortion was issued in a letter of admonishment to NBC in 1993…”).

[108] Galloway v. FCC, 778 F.2d 16, 21 (D.C. Cir. 1985).

[109] See id. at 20.

[110] Id.

[111] Id.

[112] See id. at 20, 21, 22.

[113] Id. at 20.

[114] Part of the following discussion adapts Ben Sperry, First Amendment Jurisprudence Should Reflect Economic Reality: Why Red Lion and Pacifica Must Fall, Truth on the Mkt. (Oct. 14, 2025), https://truthonthemarket.com/2025/10/14/first-amendment-jurisprudence-should-reflect-economic-reality-why-red-lion-and-pacifica-must-fall.

[115] FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009).

[116] Id. at 531-32 (Thomas, J., concurring).

[117] Id. at 533.

[118] Fox Television Stations, supra note 116, at 259 (Ginsburg, J., concurring).

[119] See, e.g., Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024).