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Elon Musk has filed an antitrust lawsuit against the Global Alliance for Responsible Media (GARM), alleging that it organized an illegal boycott of X (formerly Twitter). Video hosting platform Rumble has joined the complaint.
The suit, filed in federal court in Texas, claims that the coalition, known as GARM, “conspired” with leading brands, including CVS, Unilever, Mars and the Danish energy company Orsted, to “collectively withhold billions of dollars in advertising revenue” that were owed to X, then known as Twitter, in the wake of Elon Musk’s takeover of the social media company in 2022.
“The illegal behavior of these organizations and their executives cost X billions of dollars,” wrote Linda Yaccarino, X’s chief executive, in an open letter to advertisers. “People are hurt when the marketplace of ideas is undermined and some viewpoints are not funded over others as part of an illegal boycott.”
With the lawsuit, X effectively declared war on advertisers, which provide the bulk of the social media company’s revenue. Since Mr. Musk acquired the company and promised to usher in a new era of unfettered free speech, many advertisers have limited their spending on X, concerned by reports of rising hate speech and misinformation there. By pursuing legal action against GARM, Mr. Musk continued to break with the leaders of other social media companies, who have forged close relationships with advertisers and been responsive to their concerns about offensive online content.
“We tried being nice for 2 years and got nothing but empty words,” Mr. Musk wrote Tuesday in a post on X. “Now, it is war.” He added in a separate post that he encouraged any company that faced a boycott to file a lawsuit.
We tried being nice for 2 years and got nothing but empty words.
— Elon Musk (@elonmusk) August 6, 2024
Now, it is war. https://t.co/MEzH0vqz0p
“To the extent that Elon hadn’t already burned all bridges and ties with the entire advertising community, I don’t see how this will get any advertisers to come back to X,” said Ruben Schreurs, the chief strategy officer at Ebiquity, a marketing and media consulting firm. “It’s a last-ditch effort to force brands who don’t want to be in the cross hairs of this kind of legal action to return to the platform.”
A Message to X Users pic.twitter.com/6bZOYPhWVa
— Linda Yaccarino (@lindayaX) August 6, 2024
The suit, filed in Texas on Tuesday, follows last month’s publication of a report by the US House of Representatives’ Judiciary Committee, which found evidence that GARM conspired to demonetize and otherwise harm “disfavored platforms.”
“We tried being nice for 2 years and got nothing but empty words. Now, it is war,” Musk said on X, above a post from Rumble CEO Chris Pavlovski announcing he would join the case.
“This is not a decision we took lightly, but it is a direct consequence of their actions,” X CEO Linda Yaccarino said in an open letter to all users, calling the behavior by GARM and others “a stain on a great industry, and cannot be allowed to continue.”
According to Yaccarino, X has “met and surpassed” the requests made by GARM and other advertiser groups to improve controls and increase the effectiveness of their ads, working in good faith to allay their concerns.
“The unfortunate reality is that despite all our efforts, hundreds of meetings and research to the contrary, many companies chose to dismiss the facts. To those who broke the law, we say enough is enough,” Yaccarino said.
The lawsuit names GARM, the World Federation of Advertisers, and GARM members CVS Health, Mars, Orsted and Unilever as the defendants, with a note that the list could be expanded later pending discovery. X is seeking treble the damages as compensation.
Last month, the New York Post called GARM head Robert Rakowitz a “fascist creep” and self-styled “mega-censor of everything people can read.” The outlet was censored on multiple platforms in 2020, after publishing an entirely truthful story about Hunter Biden’s laptop that the Democrats denounced as “disinformation.”
According to the House report, GARM is an initiative of the WFA, which represents the world’s biggest ad buyers. Its members control 90% of global marketing spending, to the tune of almost $1 trillion a year. Documents obtained by the lawmakers showed Rakowitz bragging that X was “80% below revenue forecasts” since GARM began targeting it. His defense was that the email was meant as a “self-effacing joke.”
Outside observers have pointed out that GARM received money from the US government and may have been part of the notorious “censorship-industrial complex” exposed by the ‘Twitter Files.’
USAID “explicitly said it was reaching out to advertisers, doing ‘advertiser outreach’ to organize advertiser boycotts to cut financial support to disfavored websites,” noted Mike Benz, a former Trump administration official who now runs the Foundation for Freedom Online
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