X & Rumble sue “advertising cartel” for violating antitrust laws to enforce censorship

Social media companies X and Rumble have filed lawsuits against an advertising trade group and its members, accusing them of engaging in anti-competitive practices to facilitate boycotts and force tech platforms to censor content. The lawsuits were filed in the U.S. District Court for the Northern District of Texas, targeting the World Federation of Advertisers (WFA), the organization behind the Global Alliance for Responsible Media (GARM). According to the lawsuits, GARM coerced its members, which include major ad buyers, to adhere to “safety” standards that required not placing ads alongside “misinformation,” and orchestrated a boycott of X following Elon Musk’s acquisition of the company. X claims this boycott was made possible through collusion among GARM’s members.

X CEO Linda Yaccarino stated, “No small group of people should be able to monopolize what gets monetized,” reflecting the company’s stance against what it views as an undue concentration of power. The lawsuit from X further alleges that GARM took pride in the economic damage inflicted on Twitter by the boycott, claiming that Twitter was “80% below revenue forecasts” shortly after the boycott began. Documents obtained by the House Judiciary Committee, which are used in the lawsuit, suggest that GARM and its members targeted conservative news outlets, using the guise of combating “misinformation” to financially harm platforms with ideologies they opposed.

Rumble’s lawsuit, filed by the same legal team in the same court, also names the WFA and includes advertising giant WPP and its subsidiary GroupM. The suit argues that in a competitive market, advertising agencies should compete based on their ability to meet clients’ individual preferences and marketing plans. Instead, GARM allegedly leveraged the market power of its members and their clients to coerce platforms into complying with GARM’s demands. Rumble described GARM as an “advertising cartel” in their statement.

Internal emails reveal that Joe Barone, GroupM’s Managing Partner Brand Safety Americas, categorized The Daily Wire as a “Conspiracy Theories” site on their Global High Risk exclusion list. In another email, GroupM Executive Vice President of Global Brand Safety John Montgomery admitted that they did not find evidence of misinformation from The Daily Wire. During a House hearing, GroupM CEO Christian Juhl struggled to explain these actions and was soon replaced as CEO.

The lawsuits argue that the advertising industry is highly concentrated, with six multinational firms, known as the “Big Six,” acting as intermediaries for nearly every major company that purchases ads. These firms, along with others in GARM, allegedly coordinated to pressure platforms into rigorous content censorship under threat of losing advertising revenue. GARM, led by Rob Rakowitz, a former Mars Corp. executive, counts Mars, Orsted, CVS Health, and Unilever among its steering team, all of which are named in X’s lawsuit.

Emails indicate that GARM’s members were sometimes hesitant to pull their advertising dollars and sought reassurances from GARM that others were doing the same. For instance, in November 2022, Orsted reached out to GARM to discuss the Twitter situation and potential boycott, ultimately deciding to remove all advertising from X due to “brand safety concerns.” By March 2023, Orsted was inquiring about the status of other global advertisers regarding their return to the platform.

Additionally, The Daily Wire and The Federalist are suing the State Department in a separate case in federal court in Texas, alleging that the government supported private firms like Newsguard and the Global Disinformation Index, which also aimed to financially harm conservative news outlets. This highlights a broader conflict involving government-backed initiatives and their impact on media and advertising practices.

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