X Corp has initiated a lawsuit against the World Federation of Advertisers and several global companies including Unilever, Mars, CVS Health, and Ørsted A/S. The complaint, filed in the Northern District of Texas, accuses them of forming an advertising cartel that allegedly colluded to withhold advertising dollars from X Corp’s social media platform to enforce compliance with certain brand safety standards.
We obtained a copy of the complaint for you here.
According to the legal documents, this group, under the umbrella of the Global Alliance for Responsible Media (GARM), orchestrated a boycott impacting the revenue streams of X significantly, following its acquisition of Twitter. The collective action allegedly aimed at maintaining stringent content moderation standards, a move X Corp argues went beyond competitive or consumer interest to serve the cartel’s shared economic goals.
“The boycott and its effects continue to this day,” states the complaint, detailing how these actions have allegedly stifled competition and innovation in social media advertising. The complaint highlights internal communications within GARM celebrating the economic damage inflicted on X, which they claim fell “80% below revenue forecasts” due to the boycott.
A focal point of the lawsuit is the alleged breach of the Sherman Act, asserting that the defendant’s actions constitute an unlawful restraint of trade. “In a competitive market, each social media platform would set its brand safety standards…but collective action among competing advertisers to dictate brand safety standards shortcuts the competitive process,” the lawsuit contends.
Further exacerbating the issue, the House Judiciary Committee has taken an interest, with their investigation suggesting that the conduct of WFA and GARM “threatens fundamental American freedoms” and could be “likely illegal under the antitrust laws.”
X Corp seeks not only compensatory damages but also injunctive relief to prevent future boycotts and ensure a fair competitive environment.
Rumble has also joined forces with X in filing a comprehensive antitrust lawsuit against the key players in the advertising industry.
We obtained a copy of the complaint for you here.
GARM, with its cartel-like behavior, Rumble asserts, has orchestrated a boycott against it and similar platforms, unfairly cutting them off from vital advertising revenue streams.
“The brand safety standards set by advertisers and their ad agencies should succeed or fail in the marketplace on their own merits and not through the coercive exercise of market power,” Rumble’s complaint reads. “All of this illegal conduct is done at the expense of platforms, content creators, and their users, as well as the agencies’ own advertiser clients who pay more for ads as a result of their collusion.”
The lawsuit elaborates on the detrimental impact of this alleged collusion, stressing that it not only harms digital platforms and content creators by strangling their primary revenue sources but also inflates advertising costs. Consequently, this leads to higher expenses for the agencies’ own clients, spiraling into a broader negative impact on the digital advertising ecosystem.
Adding a layer of gravity to their claims, both Rumble and X highlight ongoing investigations by the US House Judiciary Committee, which has expressed concerns that GARM’s actions might violate antitrust laws and impinge on fundamental American freedoms. With this legal action, Rumble seeks not only financial redress but also a judicial affirmation that the defendants’ actions are illegal, alongside a permanent injunction to halt these practices, signaling a critical juncture in the fight for fairness in digital advertising practices.
