X today filed a lawsuit against a group of major advertisers for allegedly conspiring to withhold advertising dollars from the social media platform, which has been seen as more lenient on featuring controversial content since its acquisition by Elon Musk.
According to the lawsuit, filed in federal court in Texas, dozens of advertisers have boycotted advertising purchases on X since Musk acquired the company, following the recommendation of a major advertising coalition, the Global Alliance for Responsible Media (GARM). The lawsuit claims that this development has cost the company billions of dollars in lost revenue. The lawsuit seeks unspecified damages for violations of U.S. antitrust laws.
Rumble, a right-wing video site that was founded more than a decade ago as an alternative to YouTube and has positioned itself as a platform “impervious to cancel culture,” announced a similar lawsuit on Tuesday. “GARM is a conspiracy to orchestrate an advertiser boycott of Rumble and other sites, which is unlawful,” the company posted on its X account.
The U.S. House of Representatives Judiciary Committee, which is dominated by Republicans and has expressed concerns about the censorship of right-wing opinions on social media, has been investigating GARM. In a preliminary report in July, the committee concluded that “the extent to which GARM has organized trade associations and coordinated actions to take away consumer choice may violate antitrust laws and threaten fundamental American freedoms.” X’s lawsuit is based heavily on internal GARM emails reviewed by the congressional committee.
In a video shared by X, X CEO Linda Yaccarino said she was “shocked” by evidence uncovered by the House Judiciary Committee that there was a “coordinated illegal boycott of X.” In her statement, Yaccarino tried to rally X users by mentioning free speech. Pointing directly at the camera, she said advertisers are “targeting our company and you, our users,” and claiming they are “threatening your global street corner.”
“When the marketplace of ideas is restricted, people get hurt,” Yaccarino said.
The Brussels-based World Federation of Advertisers, which oversees GARM, did not immediately respond to a request for comment on the lawsuit. X’s lawsuit also names Unilever, Mars, CVS and a Danish energy company as defendants, while Rumble’s lawsuit also targets ad agency WPP. Neither company immediately responded to a request for comment.
X’s lawsuit argues that previously advertisers had to enter into separate agreements with social media companies to set limits on the type of content they would sponsor. Through GARM, advertisers have been able to pool their power to establish and enforce industry standards for content moderation. In X’s view, GARM now has too much say over the content social media platforms allow.
“In a competitive market, each social media platform would set the brand safety standards that are most appropriate for that platform and its users, and advertisers would unilaterally choose which platforms to place their ads on,” the complaint states. “However, for competing advertisers to collectively dictate the brand safety standards that social media platforms should apply would short-circuit the competitive process and allow the collective views of a group of advertisers with market power to override consumer interests.”
