I’m not sure that this is going to go the way that Elon and Co. hope.
Today, X has launched legal action against the Global Alliance for Responsible Media (GARM) and its chief coordinator, the World Federation of Advertisers (WFA), as well as selected GARM members, over what X claims has been “a group boycott by competing advertisers of one of the most popular social media platforms in the United States.”
Which is X, if you were wondering.
X CEO Linda Yaccarino even posted an odd video to announce the action, in which she points at the camera quite a bit.
The intention, of course, is to rally X users behind their cause, though that won’t have any impact on a legal case. So it’s pretty weird, and honestly not a great look for Yaccarino.
But X runs its own path, and this is the next step in the company’s effort to reignite its flailing ad business, which is more likely losing ground due to its owners’ continued divisive commentary on every hot button issue of the day.
X’s view, however, is that the ad industry is trying to force it to comply with its own rules around speech. And the case is actually a little more complex than it seems on the surface.
The main impetus of the filing stems from a recent Congressional appearance by political commentator Ben Shapiro, who fronted the House to claim that the GARM, a collective of advertisers who work together to challenge harmful content online, by ensuring ads are not being placed alongside it, also colludes in order to censor certain speech, by imposing restrictions on whatever GARM members don’t like, as opposed to simply managing risk.
As per Shapiro:
“GARM acts as a cartel. Its members account for 90% of ad spending in the United States, almost a trillion dollars. In other words, if you’re not getting ad dollars from GARM members, it’s nearly impossible to run an ad-based business. And if you’re not following their preferred political narratives, you will not be deemed brand safe.”
Shapiro claims that GARM’s rulings aim to quash certain narratives, at the behest of their members, which often sees conservative speech, in particular, targeted, and therefore restricted for monetization by guiding potential ad partners away from platforms and publications.
“GARM doesn’t draw the line at what is criminal, abusive, or dangerous. Their standards also include restrictions on hate speech, harassment, misinformation, or, my personal favorite, insensitive, irresponsible, and harmful treatment of debated, sensitive social issues. Those criteria are highly subjective in theory, and they are purely partisan in practice.”
Essentially, the essence of the case here is that the GARM group is able to influence ad spending by dissuading advertisers from running campaigns on whatever it deems to be “unsafe” platforms, based on its chosen criteria. Which Shapiro, and many others, claim is biased in practice.
And X is now using this as the basis for a legal challenge:
“As a condition of GARM membership, GARM’s members agree to adopt, implement, and enforce GARM’s brand safety standards, including by withholding advertising from social media platforms deemed by GARM to be non-compliant with the brand safety standards. When Elon Musk and other investors acquired Twitter in November 2022, GARM members reached out to GARM to learn “[GARM’s] perspectives about the Twitter situation and a possible boycott from many companies[,]” and GARM conveyed to its members its concerns about Twitter’s compliance with GARM’s standards, triggering the massive advertiser boycott that followed.”
X says that the impacts of GARMs advice are still being felt at the company, despite X meeting or exceeding the regulations specified by GARM. As such, the suggestion is that GARM advises its clients based on reasons outside of the remit of its code of conduct and brand safety framework, and is based more, as Shapiro claims, on ideological grounds.
Which is a big claim, and it’ll be hard to litigate in court, though it is important to clarify that X is not exactly suing individual brands for not advertising on X, as such (as many have suggested), but is actually targeting the broader industry advice group, which it feels is working against it.
Effectively, X is trying to establish is a legal approach to address a perceived effort to censor speech.
Which, conceptually, is more abstract, and more difficult to prosecute, as X is really aiming to stop organizations like GARM from coordinating to advise partners to avoid platforms like X.
I’m not sure how that can be built into a legal defense, nor whether it would actually have any impact on individual advertiser actions either way, as any brand can still advertise on X if they so choose, whether they normally adhere to GARM’s recommendations or not. GARM is not legally binding, and if a brand doesn’t agree, they can go against its recommendations, and/or disassociate with the organization. So while GARM does act as an advisory body, there’s nothing stopping any brand from disagreeing with it and utilizing any platform either way.
But X seems confident that it has a case, and that it will be able to prosecute GARM for unspecified damages stemming from its advice.
And X really needs the money right now. According to reports, the platform is currently down 50% on its 2023 revenue performance, which was already down significantly on 2022. And again, Elon Musk’s continued political commentary on divisive topics seems to be the main driver of that decline, not any advertiser boycott, as such, but maybe, if X can prove that GARM coordinated to punish the platform for reasons other than brand safety, it can sue for some level of damages as a result.
Though more likely, the case will prove little, and if anything, will bring further scrutiny on the reasons why advertisers are actually avoiding X, which could actually be worse for the platform in the long run.
It seems like an ill-informed case, pitting X against key ad industry groups. But Elon is very keen to use the courts as a threat.
