X files Antitrust lawsuit against GARM and advertisers over alleged boycott

X (formerly Twitter) CEO Linda Yaccarino announced that the social media platform has filed an antitrust lawsuit against the Global Alliance for Responsible Media (GARM), the World Federation of Advertisers (WFA), and several major advertisers. The lawsuit, filed in response to an alleged illegal boycott, names CVS Health, Mars, Orsted, and Unilever as defendants. This legal action comes after a U.S. House of Representatives Judiciary Committee report revealed evidence of what X claims to be an organized effort to target and demonetize certain platforms, content creators, and news organizations.

According to the report, GARM wields significant influence over the advertising industry, with its members accounting for approximately 90% of global advertising spend.

The report alleges that GARM and its members engaged in coordinated actions to demonetize certain platforms, content creators, and news outlets deemed unfavorable. Specific examples cited include:

• Organizing advertiser boycotts against Twitter following Elon Musk's acquisition
• Pressuring Spotify over content on Joe Rogan's podcast
• Targeting conservative news sites like Fox News, The Daily Wire, and Breitbart
• Attempting to label political ads as misinformation during the 2020 election

The committee expressed concern that such coordinated actions could violate antitrust laws by unreasonably restraining trade and limiting consumer choice. The report also highlights GARM's connections to government censorship efforts, noting that one of GARM's partners worked with the Department of Homeland Security on tools to identify alleged misinformation.

Overall, the committee's findings suggest GARM's activities may go beyond legitimate brand safety concerns and into the realm of coordinated censorship of disfavored viewpoints. This raises important questions about the appropriate role and power of advertiser coalitions in shaping online discourse and content monetization.

The decision to pursue legal action stems from findings in the committee's report titled "GARM's Harm," which Yaccarino referenced in her announcement. According to the report, evidence suggests that GARM and its members directly organized boycotts and employed indirect tactics to target platforms they disfavored. The alleged aim was to limit consumer choices by demonetizing certain content and platforms.

Yaccarino, who joined X as CEO in June 2023, emphasized the platform's role as a global, real-time conversation hub. She stated that hundreds of millions of people come to X daily to share thoughts, debate, and engage in various forms of content consumption and creation. The CEO argued that the alleged boycott threatened this ecosystem, potentially depriving users of what she termed the "Global Town Square."

The lawsuit claims that the actions of GARM, WFA, and the named advertisers have cost X billions of dollars. This financial impact is significant, especially considering the platform's recent efforts to innovate and grow. Yaccarino reported that despite the alleged boycott, X has seen increased user engagement. Using a legacy Twitter metric, user active minutes increased from 7.2 billion in August 2022 to over 9 billion at the time of the announcement, marking a 25% increase. Additionally, daily video views have risen by 45% to 8.2 billion compared to the previous year.

The legal action taken by X raises important questions about the balance between brand safety concerns and antitrust regulations in the digital advertising ecosystem. GARM, established in 2019, aims to address harmful content online and create safer digital environments for consumers, brands, and media companies. However, X's lawsuit suggests that these efforts may have crossed legal boundaries, potentially violating antitrust laws.

The situation highlights the complex relationship between social media platforms and advertisers. While platforms rely on advertising revenue, advertisers increasingly demand more control over where their ads appear and the content they are associated with. This tension has led to the development of brand safety initiatives, but X's lawsuit argues that these efforts have gone too far, effectively creating an illegal boycott.

Yaccarino's announcement also touched on X's efforts to meet advertiser demands for new tools and improved controls. She stated that the platform has surpassed requests made by advertisers and groups like GARM for enhanced advertiser controls and product effectiveness. Despite these efforts, Yaccarino claimed that many companies chose to dismiss the evidence of these improvements.

The lawsuit's implications extend beyond X and the named defendants. Yaccarino suggested that other companies might have suffered from similar activities, indicating that this case could have broader ramifications for the digital advertising industry. She emphasized that the legal action is not only about seeking damages but also about addressing what X perceives as a broken ecosystem that allows such allegedly illegal activities to occur.

The timing of this lawsuit is particularly noteworthy, coming just over a year after Yaccarino took the helm at X. Her background in media and advertising, including a long tenure at NBCUniversal, brings a unique perspective to this conflict. The decision to pursue legal action suggests a significant shift in X's approach to dealing with advertiser concerns and boycotts.

This case also raises questions about the future of brand safety initiatives and industry collaborations. If X's allegations are proven in court, it could potentially reshape how advertisers and industry groups approach content moderation and platform partnerships. The outcome of this lawsuit may have far-reaching consequences for how social media platforms, advertisers, and industry organizations interact in the future.

As the case unfolds, it will likely draw attention to the delicate balance between protecting brand safety and maintaining fair competition in the digital advertising market. The court's decision could set important precedents for how antitrust laws are applied to collective actions by advertisers and industry groups in the digital age.

The digital advertising landscape has been in flux since major changes in privacy regulations and the deprecation of third-party cookies. This lawsuit adds another layer of complexity to an already challenging environment for both platforms and advertisers. How the industry adapts to these legal challenges while still addressing legitimate brand safety concerns will be a key issue to watch in the coming months and years.

In conclusion, X's antitrust lawsuit against GARM, WFA, and several major advertisers marks a significant moment in the ongoing tensions between social media platforms and the advertising industry. As the case progresses, it will likely spark intense debates about the limits of collective action in advertising, the role of industry self-regulation, and the balance between brand safety and fair competition. The outcome of this lawsuit could have lasting implications for the future of digital advertising and content moderation on social media platforms.

Key facts

Date of announcement: August 6, 2024

Plaintiff: X (formerly Twitter)

Defendants: Global Alliance for Responsible Media (GARM), World Federation of Advertisers (WFA), CVS Health, Mars, Orsted, and Unilever

Basis of lawsuit: Alleged illegal boycott resulting in billions of dollars in losses for X

User active minutes on X: Increased from 7.2 billion in August 2022 to over 9 billion in August 2024

Daily video views on X: Up 45% to 8.2 billion compared to the previous year

X CEO: Linda Yaccarino, joined in June 2023

Source of evidence: U.S. House of Representatives Judiciary Committee report titled "GARM's Harm"