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August 8th, 2024

Global Alliance for Responsible Media is 'discontinuing' after X filed a lawsuit

The World Federation of Advertisers is discontinuing the Global Alliance for Responsible Media due to an antitrust lawsuit from Elon Musk's X, alleging collusion among GARM members to withhold advertising revenue.

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Global Alliance for Responsible Media is 'discontinuing' after X filed a lawsuit

The World Federation of Advertisers (WFA) has announced the discontinuation of the Global Alliance for Responsible Media (GARM) initiative following an antitrust lawsuit filed by Elon Musk's X (formerly Twitter). The lawsuit alleges that GARM's members, including major companies like Unilever and Mars, colluded to withhold advertising revenue from X. WFA CEO Stephan Loerke stated that the decision to discontinue GARM was not made lightly, citing the organization's limited resources. The WFA and GARM plan to contest the lawsuit, asserting their compliance with competition rules. The lawsuit comes amid a backdrop of declining advertising revenue for X since Musk's acquisition, which has seen significant changes in the platform's management and advertising policies. Concerns have been raised about the impact of the lawsuit on GARM's operations, as it has only two full-time staff members and is already dealing with other legal inquiries. Musk has previously encouraged companies to pursue legal action against what he perceives as systematic boycotts by advertisers. The situation is evolving, with further developments expected as the legal proceedings unfold.

- WFA is discontinuing GARM due to an antitrust lawsuit from Elon Musk's X.

- The lawsuit claims GARM members colluded to withhold advertising revenue from X.

- WFA and GARM intend to contest the allegations in court.

- GARM has limited resources, complicating its ability to respond to legal challenges.

- The lawsuit reflects broader tensions in the advertising landscape following Musk's acquisition of Twitter.

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X files antitrust suit against advertisers over 'systematic illegal boycott'

X files antitrust suit against advertisers over 'systematic illegal boycott'

X has filed an antitrust lawsuit against GARM and WFA, alleging coordinated boycotts that caused billions in losses. The case highlights growing scrutiny of tech companies' antitrust practices.

X, Owned by Elon Musk, Brings Antitrust Suit Accusing Advertisers of a Boycott

X, Owned by Elon Musk, Brings Antitrust Suit Accusing Advertisers of a Boycott

X has filed an antitrust lawsuit against GARM, alleging a coordinated advertising boycott by major brands, resulting in a 25% revenue drop and ongoing investigations into GARM's practices.

X files antitrust lawsuit against advertisers over 'illegal boycott'

X files antitrust lawsuit against advertisers over 'illegal boycott'

X has filed an antitrust lawsuit against major advertisers, alleging an illegal boycott through the WFA's GARM initiative, seeking a court ruling on the legality of their actions and damages.

Elon's X has lost tons of advertisers. The platform's solution is to sue them

Elon's X has lost tons of advertisers. The platform's solution is to sue them

Elon Musk's platform X is suing advertisers for alleged antitrust violations due to a boycott that reportedly withheld billions in ad revenue, impacting the platform's diversity of viewpoints and future revenue.

X (Twitter) Sues Former Advertisers

X (Twitter) Sues Former Advertisers

Elon Musk's platform X has sued several advertisers, including Unilever and Mars Inc., for an alleged illegal boycott costing billions in revenue, seeking damages under antitrust laws.

Link Icon 3 comments
By @Meekro - 6 months
I feel like this lawsuit has been deeply misunderstood on social media, as legal issues often are. No one is questioning the fact that advertisers can individually make purchasing decisions for any reason. However, collective action by major market participants is precisely the thing that antitrust law was designed to regulate. We often associate antitrust with sellers colluding (usually to raise prices), but collusion by major buyers can be just as serious.

If you read the legal complaint[1], you can see that Musk already has evidence that the advertisers engaged in this boycott primarily because GARM told them to. Some were actually eager to go back, and wrote emails to GARM asking if they were allowed to go back yet.

So again, the idea isn't that "my customers aren't allowed to leave." It is closer to, "they are using collective bargaining in a way disallowed by antitrust law, to achieve a more favorable deal than they could have gotten with 1-on-1 bargaining." The "more favorable deal" part of that doesn't have to mean price, it could instead mean "we had to spend money implementing certain technologies and human processes to assure brand safety."

I'm guessing the GARM people got legal advice and concluded that, at the very least, this has enough merit that it won't be quickly dismissed -- and they still have to consider the similar investigation being conducted by the House Judiciary Committee.

[1] https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxxwoqzvx/...

By @xenospn - 6 months
So anyone can just dismantle nonprofit organizations simply by filing a lawsuit, as ridiculous as it is?
By @OCASMv2 - 6 months
Well they folded quickly. They'll probably start another organization that does the same thing under a different name.