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November 7, 2024
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Elon Musk’s X Files Antitrust Lawsuit Against Advertisers Over ‘Massive’ Boycott

The Epoch Times

‘This is not a decision we took lightly, but it is a direct consequence of their actions,’ X CEO Linda Yaccarino wrote.

Elon Musk’s X social media platform filed an antitrust lawsuit against Global Alliance for Responsible Media (GARM), a cross-industry organization that includes the likes of Mastercard, Protcer & Gamble, and Unilever, accusing the group of a “massive advertiser boycott” against X.
X CEO Linda Yaccarino also confirmed Tuesday in an open letter to advertisers that X filed a complaint against GARM, the World Federation of Advertisers, and members such as Unilever, Mars, Orsted, and CVS Health. The suit was filed in a federal court in Texas.

“This is not a decision we took lightly, but it is a direct consequence of their actions,” she wrote. “The illegal behavior of these organizations and their executives cost X billions of dollars. Since arriving at X, I made it my mission to continue to build a platform where people, brands and advertisers can thrive in our unique, dynamic and safe environment.”

X, called Twitter before it was rebranded by Musk, filed the lawsuit after it reviewed a recent investigation carried out by the Republican-controlled House Judiciary Committee that found GARM allegedly “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 Judiciary Committee also held a hearing last month that included testimony from Daily Wire commentator Ben Shapiro, and said the committee is trying to determine whether current U.S. laws are “sufficient to deter anticompetitive collusion in online advertising.”

The CEO said X has determined GARM’s directive cost the social media platform billions of dollars in lost advertising revenue. Musk has often been critical of GARM and certain advertisers since he took over the company in late 2022.

Musk also wrote about the lawsuit on his platform on Tuesday, describing his relationship with advertisers as “a war” after “getting nothing but empty words” two years after he took over the company.

GARM and individual members named in the lawsuit have not responded to the lawsuit.

The Epoch Times has contacted GARM and the World Federation of Advertisers, an arm of the Davos, Switzerland-based World Economic Forum, for comment. GARM is commissioned by the World Federation of Advertisers, according to its website.

In response to the House Judiciary claims, GARM said in a statement in July that the committee’s report “does not include the 168-page transcribed interview which effectively clarifies questions on GARM’s adherence to competition law policy and practices, that GARM is a voluntary organization, and that guidance from GARM is non-binding.”

“We remain steadfast in the conviction that GARM enhances transparency in previously opaque practices relative to ad placements in digital social media,” GARM told news outlets at the time.

“GARM creates voluntary industry standards on brand safety and suitability which media sellers and ad tech companies can voluntarily adopt, adapt or reject.”

Musk, meanwhile, has long had an adversarial relationship with advertisers on his social media platform. In 2023, during a New York Times event, he criticized major brands for trying to “blackmail” him and told them “don’t advertise.” He also used an expletive multiple times before he appeared to single out Bob Iger, the CEO of Disney, which had pulled advertising from X.

In June, Musk softened his tone during an advertising event in Cannes, France. He said that his previous comments were directed at “advertisers as a whole” and that he was making a point about free speech.

“What is not cool is insisting that there can be no content they disagree with on the platform,” he noted, referring to major brands.

In a news release, streaming platform Rumble announced that it, too, will join the X lawsuit against GARM and the companies, similarly accusing them of violating antitrust laws.

“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 said in its complaint.

“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.”

According to the WEF’s website, GARM, which was created in 2019, is designed to curb the proliferation of “dangerous, hateful, disruptive and fake content online.”

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