Business

Elon Musk sues advertising association and major advertisers over "illegal boycott

Elon Musk and his social media company X have filed a lawsuit against the Global Alliance for Responsible Media (GARM) and major advertisers such as Unilever and Mars.

Eulerpool News Aug 7, 2024, 9:12 AM

Elon Musk's social media platform X sues the advertising association Global Alliance for Responsible Media (GARM) as well as major advertisers such as Unilever and Mars. The allegation: An illegal boycott of the platform that violates antitrust laws. This lawsuit escalates the conflict between the billionaire and some of the most important revenue sources of the social media app.

On Tuesday, Linda Yaccarino, the CEO of X, announced in a post that the company had filed a lawsuit against GARM, a coalition of brands and advertising agencies, as well as against its members. The accused companies include, among others, the consumer goods giants Unilever and Mars, as well as the U.S. pharmacy chain CVS Health. "We tried peaceful methods for two years, now it's war," Musk wrote in a post on X.

GARM and the affected companies initially did not respond to requests for comment. The lawsuit follows a report from the Republican-led House Judiciary Committee last month, accusing GARM and its members of "collusion" to boycott Twitter after Musk's takeover. This is said to have limited consumer choice and violated antitrust laws.

Here is the translated heading to English:

"The accusations were dismissed by Rob Rakowitz, co-founder of GARM. Others argued that brands have the right to decide where they spend their advertising dollars. 'The consequence — perhaps the intention — of this boycott was to exclude users of X, whether they are sports fans, gamers, journalists, activists, parents, or political and corporate leaders, from the Global Town Square,' Yaccarino said on Tuesday. 'Simply put, people are harmed when the marketplace of ideas is undermined and some views over others are not funded as part of an illegal boycott,' she added.

GARM is an industry-wide initiative that was founded in 2019 by the World Federation of Advertisers to "help the industry address the challenge of illegal or harmful content on digital media platforms and its monetization through advertising." Membership is voluntary.

The lawsuit deepens the rift between Musk and advertisers, who are concerned about the spread of hate and toxic content on the platform, as well as Musk's tendency to publicly go against them. Just before Musk completed the $44 billion acquisition of the platform in October 2022, GARM warned the Tesla CEO that keeping the platform free of inappropriate material was "non-negotiable.

After the acquisition, dozens of major advertisers cut their spending to X, leading to a 50% drop in advertising revenue after Musk relaxed moderation guidelines and reduced security personnel. Many of these customers have not returned to the platform to this day.

Musk, a self-proclaimed "Free Speech Absolutist," lashed out at those who had stopped their spending at the end of last year, including Apple, Walt Disney, IBM, Comcast, and Warner Bros. This also marks a turnaround for Yaccarino, a Madison Avenue veteran previously known for her close relationships with brands. According to the Financial Times, there have been tensions between Musk and Yaccarino, as the latter has struggled to stabilize the financial health of the platform.

This week, Musk came under criticism after saying on his platform that "a civil war is inevitable" following unrest across the country. These comments could deter further brands and angered British Prime Minister Sir Keir Starmer, whose spokesperson said on Monday: "There is no justification for such comments.

In response to a post by Starmer promising to protect Muslim communities after attacks by far-right demonstrators, Musk replied: "Shouldn't you be concerned about attacks on all communities?" On Tuesday, Musk continued to criticize the Prime Minister's crisis management in several posts to his 193 million followers.

In November of last year, X restored the account of British far-right activist and co-founder of the English Defence League, Stephen Yaxley-Lennon, known as Tommy Robinson, who continuously posted comments and videos about the unrest on the platform. Before Musk's takeover, Robinson had been banned from the platform, then known as Twitter, in 2018 for violating the hateful conduct policies.

Own the gold standard ✨ in financial data & analytics
fair value · 20 million securities worldwide · 50 year history · 10 year estimates · leading business news

Subscribe for $2

News