A global advertiser alliance has discontinued its corporate responsibility program after a lawsuit from Elon Musk’s X accused the group of orchestrating a “massive advertiser boycott”.
The World Federation of Advertisers (WFA) told members on Thursday that it would shut down the Global Alliance for Responsible Media (Garm) following legal attacks from X, formerly Twitter, according to Business Insider, which first reported the news. Garm is a not-for-profit initiative within the WFA that helps brands avoid advertising alongside or monetizing harmful content.
A statement on Garm’s website reads: “GARM is a small, not-for-profit initiative, and recent allegations that unfortunately misconstrue its purpose and activities have caused a distraction and significantly drained its resources and finances. GARM therefore is making the difficult decision to discontinue its activities.”
The social media firm filed an antitrust lawsuit earlier this week claiming advertisers including Unilever, Mars and CVS Health, all members of the WFA, unlawfully conspired to withhold “billions of dollars in advertising revenue” from X.
X’s CEO, Linda Yaccarino, tweeted after the news broke: “No small group should be able to monopolize what gets monetized. This is an important acknowledgement and a necessary step in the right direction. I am hopeful that it means ecosystem-wide reform is coming.”
The online video platform Rumble, a favorite of the American right, also joined the action, filing its own lawsuit with similar claims against the WFA over Garm.
Advertising revenue at X saw a sharp decline after Musk bought the company in 2022 and quickly gutted the social network’s content moderation teams, leading to a sharp rise in antisemitic content on X, including ads running beside posts expressing pro-Nazi sentiments. X sued a watchdog organization over its reports on the proliferation of offensive content on the social network.
Musk claimed advertisers fleeing in light of such policy changes were engaging in “blackmail” and, in a profanity-laced rant, told them to stay away. X is now seeking unspecified damages and a court order against any continued efforts to conspire to withhold ad dollars.
The WFA responded to a request for comment by saying that it would issue a statement shortly. Unilever, Mars and CVS Health did not immediately respond to requests for comment. The ad tech watchdog Check My Ads said the suit was likely to make even more advertisers flee the platform.
“Everyone can see that advertising on X is a treacherous business relationship for advertisers,” said Claire Atkin, co-founder of Check My Ads. “The upside to today’s news is that advertisers will no longer rely on Garm and will now take more direct responsibility over where their ads appear.”
A committee within the US Congress held a hearing in July on “collusion in the Global Alliance for Responsible Media”, targeting advertising firms for “anticompetitive collusion in online advertising”.
In response to the news, the X account for Republicans on the House judiciary committee posted: “Big win for the First Amendment. Big win for oversight.”
Called to speak before Congress, Unilever USA’s president, Herrish Patel, defended his company’s right to advertise where it chooses.
“Unilever, and Unilever alone, controls our advertising spending,” Patel said. “No platform has a right to our advertising dollar.”
