You may have seen a recent post on X from Elon Musk in which he declared war after trying peace for two years. But what exactly is he talking about? And who is Musk going to war against? And before you ask, no, it’s not the president of Venezuela.
The lawsuit explained
Lawyers for X filed an antitrust lawsuit, which can be read here, seeking “compensatory damages and injunctive relief” against a plethora of advertisers and demanding a trial by jury. It accuses competing advertisers of acting with and through an initiative from the World Federation of Advertisers (WFA), known as GARM (Global Alliance for Responsible Media). According to X’s attorneys, these advertisers conspired to withhold billions of dollars in advertising revenue.
The WFA website explains the GARM initiative in more detail. The GARM framework allows advertisers to make more informed decisions about where to advertise and protects them from having their content appear next to content that does not meet the standards listed by the WFA. Essentially, any content that is illegal or harmful and could affect a company’s branding will likely see fewer or no advertisements whatsoever.
The open letter to advertisers explained
The GARM initiative is all pretty fair and reasonable, however, it seems that it has had a noticeable and negative effect on revenue for X. According to an article from Variety, advertising revenue for the social media site saw a massive drop off of 52% in 2023 to $1.13 billion. An open letter was penned and posted by X CEO Linda Yaccarino, wherein she explained that a report on GARM from the U.S. House of Representatives Judiciary Committee had found “evidence of an illegal boycott against many companies, including X.”
Yaccarino went on to outline that the GARM and its members “directly organized boycotts and other indirect tactics to target disfavoured platforms” which has negatively impacted the site and its users. Some were skeptical about the lawsuit with one user responding, “You can’t force advertisers to advertise on Twitter. Sorry.”
This whole thing isn’t as cut and dry as it seems, however — if X failed to meet the standards set by GARM then companies are well within their rights to pull their ads. However, the report cited by Yaccarino claims that these companies made an organized effort to pull their ads all at once. If this really is the case it would be in violation of section 1 of the Sherman Act Antitrust law which prohibits agreements like this between distinct actors.
Musk shared Yaccarino’s open letter along with his own caption, claiming “now it is war.” But it will ultimately be up to a jury to decide whether any laws were really broken by the companies named in the lawsuit, or whether the blame lies on X and Musk for not adhering to GARM’s standards. Maybe if Musk would stop acting like a man-child advertisers would feel more comfortable appearing on his site.