Elon Musk vs. GARM: A Legal Battle Shakes the Advertising World

The Global Alliance for Responsible Media (GARM) is forced to cease its activities after a lawsuit from Elon Musk’s social media platform X has resulted in significant financial strains. The dispute ignited after GARM, a non-profit initiative of the World Federation of Advertisers (WFA), was accused of backing a boycott against X that allegedly cost the company billions in advertising revenue. According to an email sent to members by Stephan Loerke, CEO of the WFA, the WFA plans to remain fully operational. Despite efforts to fight X’s lawsuit in court, it is financially unviable for GARM due to limited resources. GARM was founded in 2019 after a massacre at a mosque in Christchurch. The goal was to influence social media moderation policies by ensuring member advertisers avoided hate speech and disinformation and aligned themselves with ethical platforms. X filed the lawsuit at the beginning of the week, naming GARM, the WFA, and member companies including CVS Health, Mars, Unilever, and Orsted as defendants. The lawsuit was preceded by an investigation conducted by the Republican-controlled Judiciary Committee of the U.S. House of Representatives. The investigation found that GARM had encouraged its members to withdraw their advertising budgets from the platform following Musk’s acquisition of X in 2022. A report from the committee revealed that over 80% of surveyed advertisers viewed Musk’s takeover of Twitter as problematic. According to the lawsuit, this led to significant advertising revenue losses for Twitter, as 18 GARM members withdrew their ads and dozens more reduced their spending. Elon Musk was defiant, writing on X that after two years of failed diplomacy, the battle had now been declared. The news of GARM’s shutdown was celebrated as a victory for free speech by Republicans and X CEO Linda Yaccarino. Yaccarino emphasized that no small committee should decide which content gets monetized: "This is an important step in the right direction." GARM, a small organization with only two full-time employees, is now unable to cope with the significant challenges triggered by the lawsuit. Despite the voluntary nature of GARM’s standards, the organization faced substantial internal pressures due to the Judiciary Committee’s investigation.