I strongly encourage any company who has been systematically boycotted by advertisers to file a lawsuit.
There may also be criminal liability via the RICO Act.
— Elon Musk (@elonmusk) August 6, 2024
Elon Musk’s social media company, X, has filed an antitrust lawsuit against the Global Alliance for Responsible Media (GARM), an industry group representing global brands, including some of X’s advertisers. The lawsuit, filed in Texas federal court, accuses GARM of conspiring to convince brands to limit or remove their advertising from X, allegedly depriving the company of billions of dollars since Musk acquired it in 2022. “We tried peace for 2 years, now it is war,” Musk posted on his social media platform.
The legal action also names GARM members including CVS Health, Mars, Orsted, and Unilever.
not sure a true libertarian would sue advertisers for failing to use any particular commercial social media platform https://t.co/c6GeRiGX3j
— Jim Pickard 🐋 (@PickardJE) August 6, 2024
X CEO Lina Yaccarino accused the ad group of trying to cut off access to the “Global Town Square” that exists on the site, which cost X “billions of dollars.”
„But winning the cases is likely a secondary priority to simply making life miserable — and expensive — for those who would oppose Musk.“
@CaseyNewton erklärt Musks Drangsalierungsvehikel https://t.co/0XI0ClmCc8
— Stefan Schulz 🪴 (@friiyo) August 7, 2024
The lawsuit is a major gamble for X, which reported declining revenues in the last two quarters of this year. GARM represents brands that spend more than 90 percent of global ad dollars, and the majority of X’s revenues come from advertising.
I thought Musk is fan of the red planet 😉https://t.co/RdtBOtwUMj pic.twitter.com/jUqtpNpl4h
— Amit Paranjape (@aparanjape) August 8, 2024
Musk’s antitrust gamble against GARM
The industry coalition has been under scrutiny in the Republican-controlled House of Representatives, where a report last month from the Judiciary Committee accused GARM of cutting out conservative news sites and pressuring Spotify over Joe Rogan’s scientifically unfounded claims about COVID-19. The report concluded that GARM “likely violated federal antitrust laws” and could be shown to be “demonetizing certain viewpoints to limit consumer choice.”
X, under Musk, has not shied away from legal battles.
Last year, it sued Media Matters for America, a left-leaning media watchdog group, for defamation over an article claiming X allowed top brands to show their content near posts with antisemitic and neo-Nazi ideas. Advertisers maintain that they have the right to protect their brands. “No platform has a right to our advertising dollar,” stated Unilever president Herrish Patel following last month’s hearing.
The GARM initiative aims to improve online safety for both consumers and advertisers and to create an ecosystem that removes harmful content from advertiser-supported social media. Despite X’s claims that it meets these safety standards, the advertising alliance remains skeptical.
