X, formerly Twitter, has sued the advertiser organization Global Alliance for Responsible Media (GARM) and several companies, accusing them of participating in an illegal boycott that resulted in billions of dollars in lost ad revenue.
Elon Musk, owner of X, has declared “war” on what he calls an ad cartel. According to X’s CEO, Linda Yaccarino, the platform has exceeded the requirements set by GARM and other ad groups, but despite this, many companies have continued to avoid advertising on the platform.
The lawsuit was filed in Texas after the US House of Representatives report revealed that GARM conspired to demonetize platforms that were not in their favor. Yaccarino believes that GARM and its members’ behavior is a black mark on the industry that cannot be allowed to continue. She also states that X has held hundreds of meetings and conducted research to address advertisers’ concerns, but that despite this, many companies have chosen to ignore the facts.
A Message to X Users pic.twitter.com/6bZOYPhWVa
— Linda Yaccarino (@lindayaX) August 6, 2024
The lawsuit names in addition to GARM, the World Federation of Advertisers, as well as companies like CVS Health, Mars, Orsted and Unilever as defendants. The list of defendants may be expanded after further investigation. X is seeking treble damages as compensation.
Video platform and YouTube competitor Rumble has also joined the lawsuit , according to CEO Chris Pavlovski. Mr. Musk and Mr. Pavlovski have both expressed that the decision to sue was not taken lightly, but was a direct consequence of the advertiser group’s actions.
The House report states that GARM, which represents the world’s largest ad buyers, controls 90% of the global advertising budget, almost a trillion dollars a year. Documents showed, among other things, that GARM’s head, Robert Rakowitz, joked about X reduced revenue as a result of the GARM boycott.
Further investigations have pointed out that GARM received money from the US government and may be part of the so-called “censorship-industrial complex”.
