Global Alliance for Responsible Media to Cease Operations Following Lawsuit from X
An influential advertising industry organization announced its decision to shut down after being sued this week by X, the social media platform owned by Elon Musk. This information was revealed in an email sent to its members, which was subsequently acquired by The New York Times.
The Global Alliance for Responsible Media (GARM), a nonprofit coalition comprising major advertisers and led by the World Federation of Advertisers, informed its members that it would halt operations just two days after Musk accused the group of orchestrating a boycott against X. The lawsuit claims that GARM violated antitrust laws by allegedly coordinating with brands to discourage them from investing in advertising on the platform.
Although the World Federation of Advertisers refuted claims that GARM’s operations had transgressed legal boundaries, they acknowledged that the nonprofit lacked the financial means to continue its activities while embroiled in litigation with X.
In an email to members, Stephan Loerke, the chief executive of the World Federation of Advertisers, expressed confidence that the legal proceedings would affirm GARM’s compliance with competition laws, yet announced an immediate cessation of its operations. “This decision was not made lightly, but GARM is a not-for-profit organization, and its resources are limited,” Mr. Loerke stated. The World Federation of Advertisers, which is also named in the lawsuit, will continue to operate independently.
The announcement of GARM’s closure was met with enthusiasm at X. Linda Yaccarino, the platform’s chief executive, remarked, “No small group should be able to monopolize what gets monetized. This is an important acknowledgment and a necessary step in the right direction. I am hopeful that it means ecosystem-wide reform is coming.”
This conflict traces back to Musk’s $44 billion acquisition of X, formerly known as Twitter, in 2022. Musk pledged to usher in a new era of unrestricted speech by dismantling many of the platform’s existing rules against hate speech and misinformation. In reaction, numerous brands opted to withdraw their advertisements from X, concerned that associating with controversial posts could harm their reputations.
GARM was established in the aftermath of the 2019 mass shooting in Christchurch, New Zealand, which was livestreamed on Facebook. In response to this tragic event, advertisers united to form the nonprofit, aiming to compel social platforms to implement more stringent content moderation policies. Following Musk’s takeover, GARM recommended that advertisers pause their spending, a move that prompted several major companies, including CVS and Unilever, to comply. Notably, these two corporations are also named in the lawsuit filed by X.
According to X’s lawsuit, filed on Tuesday in a federal court in Texas, GARM “conspired” with leading brands to “collectively withhold billions of dollars in advertising revenue” from the social media company. While a significant portion of X’s revenue is derived from advertising, Musk has declared a willingness to combat brands that choose to boycott the platform.
“We tried being nice for two years and received nothing but empty promises,” Musk stated in a post on X. “Now, it is war.”
Tiffany Hsu contributed to this report.
