A global coalition of advertisers has paused its corporate responsibility program following a lawsuit filed by Elon Musk’s X against the coalition, alleging it orchestrated a “massive advertiser boycott.”
The World Federation of Advertisers (WFA) announced to its members that the Global Alliance for Responsible Media (GARM) will be suspended in response to the legal action by X (formerly Twitter) as reported by Business Insider. Garm, a non-profit initiative within the WFA, helps brands avoid advertising on and monetizing harmful content.
The social media company brought an antitrust lawsuit against WFA members Unilever, Mars, CVS Health, and other advertisers for allegedly conspiring to withhold “billions of dollars in advertising revenue” from X.
Following the news, X CEO Linda Yaccarino expressed on Twitter: “What gets monetized shouldn’t be monopolized by a small group. This is an important recognition and a necessary step in the right direction. Hopefully, it means an ecosystem-wide shake-up is on the way.”
Rumble, a popular online video platform among the American right, also joined the lawsuit, filing its own complaint against WFA over Garm with similar allegations.
After Musk acquired the company in 2022 and swiftly disbanded the social network’s content moderation team, X’s advertising revenue plummeted sharply, leading to a surge in anti-Semitic content on X, including ads alongside pro-Nazi posts. X sued the watchdog group over a report on the proliferation of offensive content on the platform.
In a strongly worded statement, Musk warned advertisers to steer clear, labeling the policy changes as “blackmail.” Company X is now seeking unspecified damages and a court injunction to halt the alleged conspiracy of withholding advertising dollars.
After newsletter promotion
The WFA stated that it would release a statement shortly in response to a comment request. Unilever, Mars, and CVS Health did not immediately respond to comment requests. Check the ad The lawsuit is expected to further drive advertisers away from the platform.
“We all understand that advertising on X poses a risk for advertisers,” said Claire Atkin, co-founder of Check My Ads. “The positive aspect of today’s news is that advertisers will no longer depend on Garm and will take more direct responsibility for where their ads are placed.”
In July, a congressional committee held a hearing on “Collaboration in the Global Alliance for Responsible Media,” targeting advertising companies for alleged “anti-competitive collusion in online advertising.”
In response to the developments, the X account of a Republican member of the House Judiciary Committee posted, “Big win for the First Amendment. Big win for oversight.”
Invited to testify before Congress, Unilever USA President Herish Patel defended the company’s right to advertise wherever it chooses.
“Unilever alone controls our advertising spend,” stated Patel. “No platform has a monopoly on our ad spend.”
Source: www.theguardian.com
