The Daily Wire and The Federalist announced Wednesday a legal settlement in their lawsuit with the U.S. State Department over its efforts to target and defund conservative media outlets.
The conservative group hailed the settlement as a landmark victory for free speech, marking a significant rollback of government involvement in the "censorship industrial complex."
The agreement, reached as part of a lawsuit brought by the New Civil Liberties Alliance (NCLA), requires the State Department to halt any funding, promotion or coordination of "misinformation" technologies that suppress constitutionally protected speech by Americans or domestic media organizations.
The suit pointedly noted that the State Department had worked with left-wing misinformation monitors like NewsGuard.
Under the terms of the settlement, the department also agreed not to partner — formally or informally — with such organizations that monitor or restrict lawful speech in the United States.
Central to the case was the State Department's Global Engagement Center (GEC), which had originally been tasked with countering foreign propaganda.
Plaintiffs argued that the agency instead turned inward, supporting initiatives that targeted domestic political speech.
As part of the settlement, the State Department acknowledged that the viewpoints expressed by the plaintiffs — including positions on COVID-19, election integrity, and social issues — constituted "constitutionally protected speech."
The agreement effectively bars the government from using taxpayer funds to back tools that "fact check" or otherwise suppress such speech, marking a shift in federal policy following years of legal and political scrutiny.
At the heart of the lawsuit were allegations that the State Department funded and promoted third-party organizations — most notably NewsGuard and the Global Disinformation Index (GDI) — that were used to disadvantage conservative media outlets.
According to court filings and case summaries, the GEC "financed the development and promotion of censorship technology and enterprises," including these groups, which plaintiffs say targeted outlets like The Daily Wire and The Federalist.
These organizations say they rate news outlets based on credibility or "disinformation" risk.
NewsGuard, for example, assigns scores to websites that are used by advertisers and tech platforms to determine where to place ads.
NewsGuard was founded in 2018 by longtime Democratic activist and donor Steven Brill soon after President Donald Trump's first election.
Several annual studies by the Media Research Center found that Brill's group consistently ranked conservative media below liberal outlets.
NewsGuard turned those ratings over to advertising agencies and web companies in an apparent effort to de-rank and defund them from advertising revenues.
By labeling certain outlets as unreliable or high-risk, the systems allegedly discouraged advertisers from doing business with them — effectively reducing revenue and limiting reach.
The lawsuit further alleged that federal funding helped develop tools designed to identify and track "misinformation," which were then integrated into broader content moderation and advertising systems.
In some cases, these tools were used by social media platforms, artificial intelligence firms, and advertising networks, amplifying their impact across the digital ecosystem.
Critics — including lawmakers and advocacy groups — have argued that this created a feedback loop in which government-backed ratings influenced private-sector decisions, resulting in reduced visibility and monetization for targeted outlets.
Respected law professor Jonathan Turley has condemned the work of NewsGuard as being part of a "massive censorship system."
A congressional investigation previously found that multiple federal agencies, including the State Department and Pentagon, had financial relationships with NewsGuard, raising concerns about what one lawmaker described as a "nontransparent agent of censorship campaigns."
The settlement comes amid broader changes in federal policy toward counter-disinformation programs.
The State Department has already moved to dismantle the GEC, with officials acknowledging that its activities had strayed from its original mission.
Internal reviews cited in related reporting concluded that the framework "devolved into tools for political censorship instead of protecting Americans from foreign adversarial propaganda."
Secretary of State Marco Rubio has also publicly stated that eliminating what he described as government-backed censorship efforts was a priority, including shutting down offices linked to such activities.
While proponents of NewsGuard and similar initiatives maintain that their work is aimed at combating false information and protecting consumers, critics say the case highlights the risks of government involvement in shaping media narratives.
A growing number of federal and state legal actions have been underway to ban state sponsorship of censorship groups like NewsGuard.
Last year, the National Defense Authorization Act banned the Pentagon from using any advertising agency for recruitment ads if the agency works with NewsGuard or other monitoring groups.
Also last year, the State of Florida banned any state agency from spending funds with advertising agencies that work with media monitors.
© 2026 Newsmax. All rights reserved.