A global advertising alliance has discontinued its corporate responsibility program following a lawsuit filed by Elon Musk’s X that accused the group of orchestrating a “massive advertiser boycott.”
The World Federation of Advertisers (WFA) informed its members on Thursday that would go out the Global Alliance for Responsible Media (Garm) following legal attacks by X, formerly Twitter, according to Business informationwhich was the first to report the news. Garm is a non-profit initiative within the WFA that helps brands avoid advertising alongside harmful content or its monetization.
The social media company filed an antitrust lawsuit earlier this week alleging that advertisers including Unilever, Mars and CVS Health — all WFA members — illegally conspired to withhold “billions of dollars in advertising revenue” from X.
X CEO Linda Yaccarino tweeted after the news broke: “No small group should be able to monopolize what gets monetized. This is an important recognition and a necessary step in the right direction. I’m hopeful it means ecosystem-wide reform is on the way.”
Online video platform Rumble, a favourite of the American right, has also joined the action, filing its own lawsuit with similar claims against the WFA over Garm.
Advertising revenue on X took a sharp dip after Musk bought the company in 2022 and quickly dismantled the social network’s content moderation teams, leading to a sharp rise in anti-Semitic content on X, including ads running alongside posts expressing pro-Nazi sentiments. X sued a watchdog organization over its reporting on the proliferation of offensive content on the social network.
Musk claimed advertisers who left in the wake of those policy changes were committing “blackmail” and, in a profanity-laced speech, told them to stay away. X is now seeking unspecified damages and an injunction against any continued attempts to conspire to withhold advertising dollars.
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The WFA responded to a request for comment saying it would issue a statement shortly. Unilever, Mars and CVS Health did not immediately respond to requests for comment. The ad technology watchdog Check my ads He said the lawsuit would likely drive even more advertisers away from the platform.
“Everyone can see that advertising on X is a dangerous business relationship for advertisers,” said Claire Atkin, co-founder of Check My Ads. “The upside of today’s news is that advertisers will no longer be dependent on Garm and will now take more direct responsibility for where their ads appear.”
In July, a US congressional committee held a hearing on “collusion in the Global Alliance for Responsible Media,” criticizing advertising companies for “anti-competitive collusion in online advertising.”
In response to the news, the House Judiciary Committee’s Republican X account posted: “Big win for the First Amendment. Big win for oversight.”
Called to speak before Congress, Unilever USA Chairman Herrish Patel defended his company’s right to advertise wherever it wants.
“Unilever, and only Unilever, controls our advertising spend,” Patel said. “No platform has a right to our advertising dollars.”