Musk sues a group of advertisers, forces them to close their doors

BarcelonaA nonprofit coalition of major advertisers said it will close its doors after receiving a lawsuit this week from X Company (formerly Twitter), now owned by entrepreneur Elon Musk. According to the progress this Friday New York TimesThe Global Alliance for Responsible Media (GARM) emailed its members to inform them that it would cease operations two days after its employer accused them of organizing a boycott against its social network.

Musk’s lawsuit alleges that the ad group violated antitrust laws by coordinating with brands to discourage them from spending money on the messaging platform. While the World Federation of Advertisers (which leads GARM) denied that the alliance broke the law, it acknowledged that GARM did not have the financial resources to continue operating while fighting X in court. Its CEO, Stephane Loerke, said in an email that while he was confident that justice would prevail, the group would cease operations immediately.

X executives celebrated the news of GARM’s closure on the same social network. “No small group should be able to monopolize what gets monetized,” Linda Yaccarino, the social network’s CEO, said in a post. “This is an important recognition and a necessary step in the right direction. I hope this means that reform is coming to the entire ecosystem.”

Musk Age Doubts

The rift between GARM and X began with Musk’s purchase of the platform in 2022 for $44 billion. The South African billionaire then promised a new era for the social network, without restrictions on free speech, and scrapped many internal rules against hate speech and misinformation. In response, several brands stopped running ads on X, fearing that appearing next to sexist or xenophobic posts would damage their image. In the wake of the acquisition, GARM advised advertisers to pause such spending, and several major companies, including CVS and Unilever, have done so.

According to the lawsuit filed by X in federal court in Texas, GARM “conspired” with major brands “to collectively withhold billions of dollars in advertising revenue” from the social network. This particular alliance was born in 2019 after the mass shooting in Christchurch, New Zealand, which was live-streamed on Facebook, to demand that platforms adopt stricter content moderation policies.