• by Wendy Davis , August 6, 2024

Elon Musk's X Corp. has sued the Global Alliance for Responsible Media (GARM) for allegedly triggering a “massive advertiser boycott” that cost the company billions in ad revenue.

"We tried peace for 2 years, now it is war," Musk said Tuesday in a post on X, formerly Twitter.

CEO Linda Yaccarino added in an open letter posted to X that the company was “compelled to seek justice for the harm that has been done” by GARM and others.

“I’ve worked in good faith with marketers across the globe to showcase our innovations and allay any concerns with brands whom I’ve partnered with for decades," she wrote. "The unfortunate reality is that despite all our efforts, hundreds of meetings and research to the contrary, many companies chose to dismiss the facts.”

The complaint, filed Tuesday in U.S. District Court for the Northern District of Texas, X Corp. alleges that GARM, the World Federation of Advertisers, Danish energy company Ørsted, food companies Unilever and Mars, and healthcare company CVS Health violated antitrust law by scheming to deprive X of ad revenue.

X -- which rejoined GARM last month -- brings suit three weeks after the Republican-led House Judiciary Committee issued a report accusing GARM of coordinating action by corporations, ad agencies and other industry groups in order to “demonetize platforms, podcasts, news outlets, and other content deemed disfavored by GARM and its members.”

When the report came out, House Judiciary Committee chair Jim Jordan (R-Ohio) -- who has repeatedly accused tech companies, Democrats and others of collaborating to suppress conservative voices online -- tweeted that GARM's strategy is “a coordinated boycott against conservative outlets.”

Among other allegations, the House staff report specifically accuses GARM of colluding to cut ad revenue to X after its October 2022 acquisition by Elon Musk.

For instance, according to the report, the Danish energy company Ørsted contacted GARM in November 2022 to inquire about a potential boycott of X.

The following April, an employee of Ørsted said in an email to the World Federation of Advertisers and others, including GARM leader Rob Rakowitz: “Based on your recommendations, we have stopped all paid advertisement” on X.

Rakowitz denied to the House committee that GARM or the World Federation of Advertisers had recommended that Ørsted stop advertising, according to the report. Rakowitz also denied to the House committee that he had recommended that Ørsted stop advertising on Twitter.

X alleges in its lawsuit that between November 2022 and December 2022, at least 18 advertisers that were members of GARM stopped purchasing ads from Twitter. That group included Ørsted, CVS Health, Unilever U.S., and Mars, according to the complaint.

Dozens of other GARM members “substantially reduced” their advertising on Twitter in 2023, according to the complaint.

The complaint claims brand safety practices at X now “meet or exceed those specified by the GARM Brand Safety Standards,” but that the boycott is continuing.

The watchdog Check My Ads -- a frequent critic of X -- suggested Tuesday that the suit could face constitutional challenges.

“Advertisers should not have to subsidize viewpoints they don’t agree with -- in fact requiring so would be unAmerican and unconstitutional,” Sarah Kay Wiley, the group's policy director, stated Tuesday.

“Elon Musk and X executives have the right, protected by the First Amendment, to say what they want online, even when it's inaccurate, and advertisers have the right to keep their ads away from it.”

Established in 2019 by the World Federation of Advertisers, GARM members include large brand advertisers and trade associations, including the U.S.'s Association of National Advertisers, American Association of Advertising Agencies and Interactive Advertising Bureau, as well as big agencies such as Dentsu, GroupM, Havas Media, IPG, Omnicom Media Group and Publicis Media.

A spokesperson for the World Federation of Advertisers said last month that allegations that GARM engaged in anti-competitive behavior are baseless.

“We remain steadfast in the conviction that GARM enhances transparency in previously opaque practices relative to ad placements in digital social media,” the spokesperson said after the House issued its report.

“GARM creates voluntary industry standards on brand safety and suitability which media sellers and ad tech companies can voluntarily adopt, adapt or reject. This in turn allows advertisers to make choices similar to the way they buy advertising in TV, print or radio. GARM’s work focuses on voluntary monetization standards while establishing voluntary steps to improve transparency on content moderation and platform design.”

Other organizations have separately raised concerns about content on X. Media Matters for America, for instance, reported last year that ads for brands including Apple, Bravo, IBM and Oracle were being placed next to pro-Nazi posts on the platform. (X responded that the ad placements highlighted in Media Matters' report were “inorganic” and rare.)

The Center for Countering Digital Hate also reported last year that the company was allowing racist, homophobic and antisemitic comments posted by Twitter Blue subscribers to remain online. X argued in a recent court case that it lost “tens of millions” in ad revenue as a result of that report.

The conservative video platform Rumble filed a separate antitrust lawsuit Tuesday against the World Federation of Advertisers and others, including Group M.

“Advertisers and advertising agencies use GARM to force social media platforms to adopt advertiser-friendly policies that GARM’s members were unable to obtain by acting unilaterally and in uncoordinated rivalry with one another,” Rumble alleged in its complaint, also brought in U.S. District Court for the Northern District of Texas.