Introduction to the Global Alliance for Responsible Media and X’s lawsuit

The Global Alliance for Responsible Media (GARM), a non-profit initiative launched in 2019, has announced that it will discontinue its activities following Elon Musk’s X filed an antitrust lawsuit against it.

GARM was established with the aim of creating guidelines on hate speech and brand safety, with voluntary membership spanning several agencies and companies such as Dell, BP, Electronic Arts, IKEA, Microsoft, and Pepsico.

The lawsuit against GARM and its members

The lawsuit, filed in federal court in Texas, alleges that GARM created a conspiracy that saw its members “withhold billions of dollars in advertising revenue” from X after Musk purchased the company and rebranded it from Twitter in 2022.

The group was concerned that Twitter under Musk would no longer adhere to its established brand-safety standards for advertising on social media, according to the lawsuit.

Defendants named in the lawsuit

The lawsuit specifically criticises a handful of GARM members, including CVS Health, Unilever, Orsted, and Mars, for discontinuing or greatly reducing their advertising in late 2022, shortly after Musk’s $44 billion purchase of Twitter was completed.

A further 14 or more additional GARM members stopped purchasing advertising between November and December 2022, according to the lawsuit.

The move has been widely seen as a response to X’s acquisition of Twitter and the subsequent changes made by Musk to the platform, including the ousting of Twitter’s trust and safety council and the removal of staff members who worked on content moderation.

Background on the lawsuit and the Global Alliance for Responsible Media

The lawsuit against the Global Alliance for Responsible Media (GARM) follows a long-standing dispute between Elon Musk’s X and the advertising industry over issues of brand safety and content moderation on social media platforms.

What is the Global Alliance for Responsible Media?

GARM was launched in 2019 as a non-profit initiative with the aim of creating guidelines on hate speech and brand safety, with a focus on the social media industry.

The initiative was established by the World Federation of Advertisers (WFA), a trade group that represents the interests of advertisers worldwide.

The role of GARM in the advertising industry

GARM’s role was to provide a framework for advertisers to assess the suitability of social media platforms for their advertising campaigns, taking into account issues such as brand safety, hate speech, and misinformation.

However, the initiative was voluntary, and advertisers were not required to adhere to its guidelines. Nevertheless, GARM’s framework was seen as an important step in promoting transparency and accountability in the social media industry.

The decision by GARM to discontinue its activities following the lawsuit against it has been widely seen as a blow to the advertising industry’s efforts to promote responsible social media advertising practices.

As a result of the lawsuit, the advertising industry is facing renewed scrutiny over its role in shaping the content available on social media platforms, and the extent to which advertisers should be held accountable for their influence on online discourse.

The controversy surrounding GARM and the lawsuit against it highlights the complex and often fraught relationship between the social media industry, advertisers, and regulators.

The Allegations Against GARM and its Members

The lawsuit filed by X against GARM and its members makes several allegations of antitrust behavior, including:

Collusive withholding of advertising revenue

The lawsuit alleges that GARM’s members collectively withheld billions of dollars in advertising revenue from X, following Musk’s acquisition of Twitter in 2022.

The lawsuit claims that GARM members used their collective power to coerce advertisers into withholding their advertising revenue from X, in order to pressure Musk into adopting their preferred brand safety standards.

Coercion of advertisers

The lawsuit also alleges that GARM members used their market power to coerce other advertisers into joining their effort to withhold advertising revenue from X.

According to the lawsuit, GARM members formed a coordinated effort to persuade advertisers to abandon X, and to instead direct their advertising dollars to other social media platforms.

The lawsuit claims that this concerted effort by GARM members had a significant impact on X’s advertising revenue, and ultimately led to a mass exodus of advertisers from the platform.

The allegations of antitrust behavior against GARM and its members have sparked controversy and debate within the advertising industry, with some arguing that the lawsuit is an attempt to stifle competition and innovation in the social media market.

Others, however, see the lawsuit as a necessary step to hold GARM and its members accountable for their actions, and to prevent further manipulation of the advertising market.

GARM’s Response to the Lawsuit and Decision to Discontinue

In response to the lawsuit, GARM’s CEO, Stephan Loerke, issued a statement saying that the organization is confident in its adherence to competition rules and will contest the allegations in court.

Decision to discontinue GARM activities

However, in an email to GARM members, Loerke announced that the organization will discontinue its activities, citing limited resources and the need to focus on meeting the costs of the lawsuit.

The decision to discontinue GARM activities has sparked questions about the future of the organization and its mission to promote responsible media practices in the advertising industry.

GARM’s mission and legacy

GARM was established in 2019 with the goal of creating guidelines for responsible media practices, including brand safety and hate speech.

Although the organization’s decision to discontinue its activities has raised concerns about the future of its mission, GARM’s legacy in promoting responsible media practices in the advertising industry is likely to endure.

Some industry stakeholders have praised GARM’s efforts to promote transparency and accountability in the advertising industry, and have called for similar initiatives to be established in the future.

Others have expressed concern that the demise of GARM may indicate a decline in the industry’s willingness to prioritize responsible media practices and may weaken consumer trust in the advertising industry as a whole.

The impact of GARM’s discontinuation on the advertising industry will continue to be felt in the coming months and years, and it remains to be seen what impact it will have on industry practices and consumer trust.

Industry Insiders’ Reactions to the Lawsuit and GARM’s Decision

The lawsuit against GARM and its members has sparked a range of reactions from industry insiders, with some expressing surprise and others calling for greater scrutiny of the advertising industry.

Industry leaders weigh in

Elon Musk, CEO of X, has been vocal in his criticism of GARM and the advertising industry’s approach to brand safety, calling for greater transparency and accountability.

Musk has argued that the lawsuit against GARM is an important step towards holding the advertising industry accountable for its practices and ensuring that social media platforms are not unfairly manipulated by large advertisers.

Advertising industry pushes back

However, some industry leaders have pushed back against Musk’s criticisms, arguing that the advertising industry is subject to a range of regulations and guidelines that ensure transparency and accountability.

Critics of the lawsuit have also argued that it reflects a broader attempt by X to consolidate power and gain an unfair advantage in the market.

Industry watchdog groups have also weighed in on the controversy, calling for greater scrutiny of the advertising industry and its practices.

Some have argued that the lawsuit against GARM highlights the need for greater regulation and oversight of the advertising industry, while others have seen it as an example of the industry’s willingness to fight for its interests.

The debate is likely to continue in the coming months and years, with industry insiders and regulators weighing in on the controversy and its implications for the advertising industry.

Impact of X’s Acquisition of Twitter on Advertising Revenues

The acquisition of Twitter by Elon Musk’s X has had a profound impact on the advertising industry, with many major brands suspending or terminating their advertising campaigns on the platform.

Advertising revenue decline

According to reports, the advertising revenue of Twitter dropped significantly after Musk’s acquisition, with some major brands such as Apple, Coca-Cola, and McDonald’s suspending their advertising campaigns on the platform.

This decline in advertising revenue has been attributed to a range of factors, including concerns over brand safety, hate speech, and the spread of misinformation on the platform.

Causes of the advertising revenue decline

Some of the key causes of the decline in advertising revenue include:

• Changes to Twitter’s moderation policies, which have led to a perceived increase in hate speech and harassment on the platform.
• The reinstatement of banned accounts, including those associated with hate groups and extremist ideologies.
• The introduction of new features, such as the ability to pay for blue checks, which have raised concerns over the spread of misinformation.

These changes have led to a range of concerns among advertisers, including a perceived shift in Twitter’s brand identity and a lack of transparency over its moderation policies.

The impact of X’s acquisition of Twitter on the advertising industry will continue to be felt in the coming months and years, as brands and regulators assess the implications of the changes to the platform.

History of the Global Alliance for Responsible Media and its Mission

The Global Alliance for Responsible Media (GARM) was established in 2019 as a non-profit organization with the mission of promoting responsible media practices in the advertising industry.

Founding and early years

GARM was founded by the World Federation of Advertisers (WFA) with the aim of creating guidelines for responsible media practices, including brand safety, hate speech, and the spread of misinformation.

The organization’s early years were marked by a focus on developing these guidelines and engaging with industry stakeholders to promote their adoption.

Launch of the GARM principles

In 2020, GARM launched its initial set of principles for responsible media practices, which included guidelines for brand safety, hate speech, and the spread of misinformation.

These principles were widely publicized and gained significant traction within the industry, with many major brands and advertising agencies committing to implementing them.

However, the launch of the principles also sparked controversy, with some arguing that they were overly restrictive and would limit the creative freedom of advertisers.

GARM’s mission and principles have continued to evolve over the years, with a growing focus on issues such as transparency, accountability, and the role of social media platforms in promoting responsible media practices.

The organization’s work has had a significant impact on the advertising industry, with many major brands and advertising agencies adopting its principles and guidelines.

Antitrust Concerns and the Role of the Federal Trade Commission

The lawsuit against GARM has raised significant antitrust concerns, with some arguing that the organization’s actions constitute a restraint of trade and an attempt to monopolize the advertising market.

Antitrust laws and regulations

Antitrust laws and regulations are designed to promote competition and prevent the formation of monopolies in the marketplace.

These laws and regulations are enforced by the Federal Trade Commission (FTC), which has the authority to investigate and prosecute antitrust violations.

FTC involvement in the GARM case

The FTC has been involved in the GARM case, with some reports suggesting that the agency is investigating the organization’s allegations.

The FTC has not publicly commented on the case, but industry sources suggest that the agency is taking a close look at GARM’s activities and the impact they may have on the advertising market.

The FTC’s involvement in the case is seen as significant, as it could potentially lead to a more in-depth examination of GARM’s actions and a determination of whether they constitute an antitrust violation.

Industry stakeholders are watching the FTC’s involvement in the case closely, as it could have significant implications for the advertising industry and the role of GARM in promoting responsible media practices.

The outcome of the GARM case will likely have a significant impact on the advertising industry, with industry stakeholders awaiting further developments and guidance on the matter.

Conclusion: Implications of the Lawsuit and GARM’s Discontinuation

The lawsuit against GARM and its discontinuation have significant implications for the advertising industry and the role of social media platforms in promoting responsible media practices.

Ad industry reaction

The reaction of the advertising industry to the lawsuit and GARM’s discontinuation is one of shock and concern, with many industry stakeholders questioning the motivations behind the lawsuit and the impact on the industry.

Impact on social media platforms

The lawsuit and GARM’s discontinuation also have significant implications for social media platforms, which may face increased scrutiny and regulation over their moderation policies and practices.

The outcome of the lawsuit could potentially set a precedent for future litigation against social media platforms and impact their ability to moderate content and promote responsible media practices.

Future of responsible media practices

The future of responsible media practices in the advertising industry is uncertain, with some industry stakeholders predicting a shift towards increased regulation and oversight of the industry.

Others predict that the industry will continue to evolve towards more responsible and sustainable practices, with brands and advertisers prioritizing transparency, accountability, and the well-being of consumers.

Important questions remain

Important questions remain about the role of GARM and the advertising industry in promoting responsible media practices and about the implications of the lawsuit for social media platforms and the industry as a whole.

The outcome of the lawsuit and the future of responsible media practices in the advertising industry will be closely watched by industry stakeholders and regulators, with significant consequences for the industry and its stakeholders.