The recent lawsuit filed by social media giant X against the Global Alliance for Responsible Media (Garm) and the World Federation of Advertisers (WFA) has sent shockwaves through the digital advertising industry. The company, formerly known as Twitter, alleges that these organizations engaged in a coordinated effort to divert advertising revenue away from certain platforms and media outlets, including X, in an attempt to suppress right-leaning online content.
According to a report from the House Judiciary Committee, Garm and the WFA colluded to demonetize platforms and content that they deemed disfavored, effectively limiting the variety of content and viewpoints available to consumers. The report also highlighted a clear bias favoring left-leaning news sources in Garm’s work. X CEO Linda Yaccarino, in an open letter to advertisers, accused these organizations of engaging in illegal behavior that cost X billions of dollars.
The lawsuit comes in the wake of X’s acquisition by billionaire Tesla CEO Elon Musk, who implemented significant changes within the company. Musk’s restructuring efforts, including a pay-to-play verification model and reduced content moderation, led to an influx of hate speech and misinformation on the platform. As a result, advertisers began cutting back on ad spend, citing brand safety concerns.
In response to the decline in ad revenue, X is now pointing fingers at Garm and the WFA, alleging that they orchestrated a campaign to pressure advertisers to pull back from the platform. Garm, established by the WFA in 2019, claims to be apolitical but has been accused of diverting advertisers away from platforms hosting content with which it disagrees for political or ideological reasons.
Despite X’s strong stance against Garm and the WFA, it remains to be seen whether these organizations have violated US law. The House Judiciary Committee has indicated that the actions outlined in its report may be illegal under antitrust laws and has pledged to continue investigating the matter. In a similar vein, video-sharing platform Rumble has also filed an antitrust lawsuit against the WFA and ad agency holding company WPP, alleging coercive market practices.
As the legal battle unfolds, the implications for the digital advertising landscape are significant. The outcome of these lawsuits could shape the future of online content moderation, brand safety standards, and the relationship between advertisers and platforms. For the latest updates on this developing story, sign up for The Drum’s daily newsletter.