X today filed a lawsuit against a group of major advertisers for allegedly conspiring to withhold advertising dollars from the social media platform, which since Elon Musk’s takeover has been seen as more amenable to hosting controversial content.
The suit, filed in federal court in Texas, says dozens of advertisers followed the recommendation of a key advertising coalition, Global Alliance for Responsible Media (GARM), to boycott buying ads on X since Musk bought the company. The suit says this turn of events cost the company billions of dollars in revenue. The lawsuit seeks unspecified damages for violation of US antitrust law.
The right-wing video site Rumble, founded more than 10 years ago as an alternative to YouTube and positioned as a platform “immune to cancel culture,” announced on Tuesday that it had filed a similar lawsuit. “GARM was a conspiracy to perpetrate an advertiser boycott of Rumble and others, and that’s illegal,” the company posted on its X account.
The US House Judiciary Committee, which is controlled by Republicans and has expressed concern about censorship of right-wing views on social media, has been investigating GARM. In a preliminary report in July, the committee found that “the extent to which GARM has organized its trade association and coordinates actions that rob consumers of choices is likely illegal under the antitrust laws and threatens fundamental American freedoms.” X’s lawsuit draws heavily from internal GARM emails reviewed by the congressional panel.
In a video shared to X, X CEO Linda Yaccarino said she was “shocked” by the evidence uncovered by the House Judiciary Committee that there had been a “systematic illegal boycott against X.” Yaccarino attempted to rally X users with references to free speech in her statement. While pointing directly at the camera, she alleged that the advertisers were “targeting our company, and you, our users,” and “threatening your global town square.”
“People are hurt when the marketplace of ideas is constricted,” Yaccarino said.
The Brussels-based World Federation of Advertisers, which oversees GARM, did not immediately respond to a request for comment on the lawsuits. X’s lawsuit also names Unilever, Mars, CVS, and a Danish energy company as defendants, while Rumble’s suit additionally targets the ad agency WPP. None of the companies immediately responded to requests for comment.
X’s lawsuit contends that advertisers in the past had to individually strike deals with social media companies to set boundaries around what types of content they would sponsor. Through GARM, advertisers have been able to aggregate their power, establish industry standards for content moderation, and enforce them. In X’s view, GARM now has too much say over the content social media platforms may allow.
“In a competitive market, each social media platform would set the brand safety standards that are optimal for that platform and for its users, and advertisers would unilaterally select the platforms on which they advertise,” the complaint states. “But collective action among competing advertisers to dictate brand safety standards to be applied by social media platforms shortcuts the competitive process and allows the collective views of a group of advertisers with market power to override the interests of consumers.”
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