Ad Advisory Group Suspends Activity Following Legal Action from X

Despite widespread criticism of X’s lawsuit against the Global Alliance for Responsible Media (GARM), it does appear to have had at least part of the desired effect.

Today, the World Federation of Advertisers (WFA) which coordinates the GARM program, announced that it will be “discontinuing” GARM for the time being.

As reported by Business Insider:

“Stephan Loerke, the CEO of the WFA, wrote in an email to members that the decision was “not made lightly” but that GARM is a not-for-profit organization with limited resources. Loerke said that the WFA and GARM intended to contest the allegations in X’s suit in court and were confident the outcome of the case would “demonstrate our full adherence to competition rules in all our activities.”

So the WFA is still planning to contest X’s lawsuit, but in the meantime, it’s scaling back the GARM program while it assesses its options.

To recap, earlier in the week, X announced that it’s suing GARM and the WFA for damages over allegations that the group coordinated an advertiser boycott against X, seemingly on ideological grounds.

The claim is based on a recent report submitted to the House Judiciary Committee which suggests that GARM members have “colluded to suppress voices and views disfavored by leading marketers”. Of specific note, the report suggests that GARM has steered its members away from conservative-leaning outlets, in order to choke their respective revenue streams. The report suggests that such activity could be in violation of The Sherman Act, which disallows unreasonable restraints of trade.

Twitter/X was specifically named in the report, with GARM members reportedly advised to avoid advertising on the platform following Elon Musk’s takeover of the app.

Which is why Musk and Co. are now seeking damages, with the company claiming that GARM’s advice has cost it “billions of dollars”.

And while legal experts seem unanimous in their view that X’s lawsuit won’t hold up under scrutiny, the fact that X is initiating expensive legal proceedings could be just as important as the outcome itself. Because while Musk has virtually unlimited resources, enabling him to pursue such, GARM, and other groups that X has targeted with legal threats, are relatively small, not-for-profit and/or research collectives, which have no way of affording legal defense.

As such, they typically end up shutting down, or scaling back their efforts, and analysis of X specifically, in order to avoid further costs.

We’ve already seen X take this route with several research groups that have been critical of its actions following Musk’s takeover.

Last year, X sued the Center for Countering Digital Hate (CCDH), over claims the CCDH had made that hate speech had increased in the app. A judge eventually dismissed X’s claim. X is also pursuing legal action against Media Matters, over a report it published which showed that X is displaying ads alongside offensive content.

In a related case, The Stanford Internet Observatory project, which investigated the abuse and misuse of social platforms for political influence, shut down earlier this year due to mounting legal costs, as a result of action by conservative groups.

Essentially, these researchers are being forced to scale back their analysis of such activity through legal pressure, which will only cease if they stop looking for problems on certain platforms.

That may also be the case with this latest lawsuit against GARM, which is why the shelving of the project could actually be the intended aim of X’s suit.

But really, X’s case does seem fairly loose, especially given Musk’s ongoing amplification of misinformation, in varying context.

Indeed, the same Center for Countering Digital Hate has this week published a new report which shows that Elon himself has amplified proven misinformation or misleading reports 50 times this year alone, and that those posts have been viewed by over 1.2 billion people.

Also worth noting:

“None of the 50 posts by Musk displayed a “Community Note” to correct his claims or add context, calling into question the effectiveness of X’s user-driven fact-checking system. “

The report could see Musk and Co. heading to the courts again, as they work to quell negative reports about X. But examples like this show how it’s actually Elon’s own actions that are driving advertisers away from the platform, not GARM, and not independent researchers who bring light to the same.  

Musk’s increasingly divisive comments have alienated many would-be ad partners, who are concerned about his views on virtually every hot-button topic. That’s brought more than enough negative attention to the app, which Elon has acknowledged, by both vowing that “I’ll say what I want and if the consequence of that is losing money, so be it,” and also telling advertisers to “go f*** themselves” if they don’t like it.

So Elon knows that his comments and stances will cost him and X money. But now, he’s both looking for someone else to blame, while also seeking to recoup costs as the platform’s ad business continues to collapse.

And at worst, maybe, legal action likes this makes more organizations less inclined to report on X, for fear of legal action, which could then enable X to attract more ad partners who are unaware of the risks.

As such, while the case itself may not be a winner, the outcome, as with GARM, may still work in Musk’s favor.