X has taken legal action against a group of prominent advertisers, accusing them of colluding to withhold ad spend from the platform following Elon Musk’s acquisition. This shift in behavior allegedly cost X billions in revenue, prompting a lawsuit for damages under US antitrust law.
The lawsuit, filed in a Texas federal court, claims that numerous advertisers heeded the Global Alliance for Responsible Media’s (GARM) call to boycott X post-Musk era. In a parallel move, the right-wing video platform Rumble has also initiated legal proceedings, citing GARM’s alleged conspiracy to instigate an advertiser boycott against them and others.
On another front, the US House Judiciary Committee is investigating GARM, expressing concerns over potential violations of antitrust laws and threats to American freedoms. X’s lawsuit draws on internal GARM emails scrutinized by the congressional panel, adding weight to the legal challenge.
X CEO Linda Yaccarino recently addressed the issue in a video, denouncing the alleged illegal boycott as detrimental to free speech and user autonomy. She highlighted the importance of preserving the marketplace of ideas, urging users to stand against the advertisers impacting their digital space.
The World Federation of Advertisers, overseeing GARM, has yet to respond to the lawsuits, which also implicate major companies like Unilever, Mars, and CVS. X’s complaint argues that GARM’s influence over content moderation poses a threat to social media platforms’ independence in setting brand safety standards.
According to the lawsuit, GARM’s collective power allows advertisers to dictate content guidelines across platforms, bypassing individual agreements between advertisers and social media companies. This, X claims, undermines competition and consumer interests, favoring the agenda of a select group of powerful advertisers.