X filed an antitrust lawsuit against a global advertising group for allegedly conspiring to block ad revenue from going to certain platforms and content creators.

“X has filed an antitrust lawsuit against the Global Alliance for Responsible Media (GARM), the World Federation of Advertisers (WFA), and GARM members CVS Health, Mars, Orsted and Unilever. This is not a decision we took lightly, but it is a direct consequence of their actions,” X Corp CEO Linda Yaccarino wrote in an open letter to advertisers.

Yaccarino wrote:

Every day, hundreds of millions of people come to X to be part of the only global, real-time conversation. They come to share their thoughts and hear others. To share their content and see more. To debate and be debated. To entertain and be entertained. To inspire and be inspired. There is no substitute for X.

The power of this community to bring global conversations to life was the reason I was so excited to join X as CEO in June 2023.

After a career in media and advertising, I thought I had seen everything. Then I read the U.S. House of Representatives Judiciary Committee’s report entitled “GARM’s (Global Alliance for Responsible Media) Harm” last month. The report disclosed that their investigation had found evidence of an illegal boycott against many companies, including X.

As their report found: “Evidence obtained by the Committee shows that GARM and its members directly organized boycotts and used other indirect tactics to target disfavored platforms, content creators, and news organizations in an effort to demonetize and, in effect, limit certain choices for consumers.”

The consequence – perhaps the intent – of this boycott was to seek to deprive X’s users, be they sports fans, gamers, journalists, activists, parents or political and corporate leaders, of the Global Town Square.

To put it simply, people are hurt when the marketplace of ideas is undermined and some viewpoints are not funded over others as part of an illegal boycott.

This behavior is a stain on a great industry, and cannot be allowed to continue.

“We tried peace for 2 years, now it is war,” Elon Musk commented.

Yaccarino issued this message to X users:

“Rumble has joined @X to sue a cartel of advertisers and ad agencies who conspired to block ad revenue from going to certain platforms and content creators. GARM was a conspiracy to perpetrate an advertiser boycott of Rumble and others, and that’s illegal,” Rumble stated.

From Rumble:

In its filing in the U.S. District Court for the Northern District of Texas, Rumble named as defendants the World Federation of Advertisers (WFA), as well as the advertising agency WPP and its subsidiary GroupM Worldwide.

The conspiracy centers around an initiative called the Global Alliance for Responsible Media (GARM), created by the WFA, that established arbitrary standards for the content on digital platforms where its members may want to advertise. GARM used those one-size-fits-all standards to perpetrate an advertiser boycott against Rumble and other platforms. The suit also notes that GARM has vast reach since it counts the six largest ad agency holding companies among its members, including defendant WPP.

“The brand safety standards set by advertisers and their ad agencies should succeed or fail in the marketplace on their own merits and not through the coercive exercise of market power,” Rumble’s complaint reads. “All of this illegal conduct is done at the expense of platforms, content creators, and their users, as well as the agencies’ own advertiser clients who pay more for ads as a result of their collusion.”

The unlawful conduct alleged by Rumble is also the subject of an ongoing investigation by the U.S. House Judiciary Committee in Congress. An interim committee staff report issued in July found that the way GARM has operated in this regard “is likely illegal under the antitrust laws and threatens fundamental American freedoms.”

Rumble is seeking a declaration that the defendants’ conduct is illegal, a permanent injunction against the continued conduct, damages, interest, and legal fees, among other relief.

“X Corp has sued the World Federation of Advertisers in an antitrust action. It is my understanding that Rumble is joining this lawsuit – though the docket doesn’t reflect that yet. This thread will detail the complaint, and further reporting on this will be found below,” Tracy Beanz said.

“The suit alleges that WFA and GARM conspired with dozens of advertisers and others, to collectively withhold billions of dollars in advertising revenue from X. The suit argues that’s that the boycott enacted was an attempt to force Twitter to adhere to certain brand safety guidelines they wanted,” she added.

“GARM celebrated an 80% reduction in ad revenue for Twitter. The actions they (and the advertisers) took, are counter to a free marketplace. Here is where the anti-trust comes in – these advertisers took action COUNTER to their economic interests BECAUSE of their membership in this parent organization. If there was a competitive market, each platform would set the standards best for that platform, and the sheer efficiency of those standards would dictate the success (or failure) of advertisers,” Beanz continued.

“The brand safety standards set by GARM are ideological – and so they would likely fail in the marketplace of ideas. That’s me saying that, the complaint is much more…kind. The complaint alleges that the collective group of advertisers is overriding the actual consumer— kind of counterintuitive unless your mission *is* to spread an ideological message,” she added.

“This lawsuit was filed as a result of the House Judiciary Committee, who in their report concluded that their conduct was likely illegal under anti-trust laws,” she noted.

Fox Business reports:

In a Tuesday press release, the video-sharing platform and cloud services provider Rumble announced it was joining the lawsuit.

GARM claims to be “apolitical” and “voluntary” and says that it benefits its members by providing use of “resources and information about best practices to learn where their advertising investments go, and to avoid placement next to illegal or harmful content that could damage their brands’ reputation.”

However, GARM’s critics have a different view of the organization and suggest that it has colluded with dozens of major U.S. corporations to push boycotts and suppress speech in a manner that targets conservatives.

In discussing his views on freedom of speech, GARM’s leader and co-founder, Rob Rakowitz, has expressed frustration with an “extreme global interpretation of the US Constitution” and complained about using “‘principles for governance’ and applying them as literal law from 230 years ago (made by white men exclusively).” With this worldview, GARM pushed what it called “uncommon collaboration” to “rise above individual commercial interest.”

GARM is alleged to have worked with large companies to implement advertising crackdowns on Elon Musk, Joe Rogan, Spotify, political candidates and news outlets, including Fox News, The Daily Wire and Breitbart News.

Musk has also publicly criticized GARM and previously suggested taking legal action against the group while referring to it as an “advertising boycott racket.”

 

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