GARM Shuts Down Amid Legal Battle with Elon Musk Over Advertising Boycott

“Google’s market power is immense, and the way it wields that power poses a serious threat to competition and innovation.” Margrethe Vestager, European Commissioner for Competition

The Global Alliance for Responsible Media (GARM), an advertising coalition focused on promoting transparency in digital ad placements, has announced its closure. This decision follows a lawsuit filed by Elon Musk against several sponsors who withdrew their advertising from X, the social media platform formerly known as Twitter.

Elon Musk declares war as X / Twitter files anti-trust lawsuit against advertisers. Here’s my breakdown of the situation and commentary on X CEO Linda Yaccarino’s announcement video.

(To be fair to Yaccarino, this video makes more sense if you assume Elon was sitting in the room… pic.twitter.com/HDs0vahhgE

— James Archer (@jamesarcher) August 7, 2024

Earlier this week, Musk’s X filed a lawsuit targeting the World Federation of Advertisers (WFA), the organization that initiated GARM, as well as several prominent companies, including Mars, CVS, Unilever, and the Danish clean energy firm Orsted. Musk’s lawsuit claims these advertisers violated antitrust laws by collectively pulling their ads from X, alleging that their actions amounted to a boycott.

GARM, in a statement, explained that it is a small, non-profit initiative and that the recent legal challenges have significantly drained its financial and operational resources. “Recent allegations that unfortunately misconstrue its purpose and activities have caused a distraction and significantly drained its resources and finances,” the group stated. Consequently, the WFA made the difficult decision to discontinue GARM’s activities.

“Google is not just a gateway to the internet; it’s a gatekeeper that controls the flow of information and stifles competition.”

The controversy stems from concerns that advertisers’ brands were being displayed alongside racist and antisemitic content on X. As a result, many sponsors began to withdraw their advertisements in 2023, leading to a sharp response from Musk. In one instance, Musk bluntly told the departing advertisers to “go f— yourself.”

The World Federation of Advertisers is ‘discontinuing’ the activities of the Global Alliance for Responsible Media after Elon Musk’s X filed an antitrust lawsuit against it.

Stephan Loerke, the CEO of the WFA, wrote in an email to members that the decision was “not made lightly”… pic.twitter.com/oRJ0aOBSg7

— Jevaughn (@Jevaughn_Brown) August 8, 2024

Musk’s lawsuit described the situation as an antitrust violation, arguing that the advertisers engaged in a collective boycott against one of the most popular social media platforms in the United States. The suit claims that GARM’s members, in a coordinated effort, significantly reduced or completely halted their advertising on X, which Musk’s legal team labeled as conspiracy and collusion.

GARM, however, defended its role in the advertising industry, stating that it had worked to improve transparency and safety in digital ad placements. The group was launched in 2019 in response to a series of incidents where advertisements appeared alongside harmful or illegal content, such as terrorism or child pornography, which posed both consumer and reputational risks for brands.

🚨The World Federation of Advertisers told its members that Global Alliance for Responsible Media is ‘discontinuing’ after Elon Musk’s X filed an antitrust lawsuit against it. pic.twitter.com/QSNTGcFzOG

— VoxPopuli (@vpopulimedia) August 8, 2024

Despite these efforts, the mounting legal pressures and resource depletion led to the decision to close GARM, marking the end of an initiative that aimed to create safer and more responsible advertising environments online.

Quotes

• “The dominance of Google is a reminder that in the digital age, monopolies can form and become even more powerful than in the past.” Tim Wu, Legal Scholar
• “When a single company controls the market, it doesn’t just hurt its competitors, it hurts consumers by limiting choice and innovation.” 
• “Google’s monopoly power enables it to crush competitors before they can even get off the ground, which is detrimental to a healthy, competitive marketplace.”

Major Points:

• The Global Alliance for Responsible Media (GARM) is closing operations following a lawsuit by Elon Musk’s social media platform, X, against advertisers who withdrew support.
• X filed a lawsuit against the World Federation of Advertisers (WFA), which founded GARM, along with companies like Mars, CVS, Unilever, and Orsted, accusing them of antitrust violations for pulling ads due to concerns about their brands appearing alongside harmful content.
• GARM cited that recent allegations have misrepresented its purpose, leading to significant strain on its resources and finances, prompting the WFA to discontinue its activities.
• The lawsuit from X alleges that the advertisers engaged in a collective boycott, significantly reducing or stopping their ad purchases on the platform, which Musk labeled as a conspiracy and collusion against X.
• Established in 2019 following the Christchurch Mosque shootings, GARM aimed to increase transparency in ad placements on social media and address issues where brands’ ads appeared next to harmful or illegal content.

Lap Fu Ip – Reprinted with permission of Whatfinger News