The World Federation of Advertisers (WFA) has decided to discontinue the operations of its nonprofit division, the Global Alliance for Responsible Media (GARM), in light of a legal complaint filed by Elon Musk's social media platform, X.

This decision follows allegations of anticompetitive conduct against GARM, involving major companies and another social media platform, Rumble, and it marks a win for Musk and his allies, as Fox Business reports.

The legal action, spearheaded by X, formerly known as Twitter, accuses GARM and its associated members, including CVS Health, Mars, Orsted, and Unilever, of engaging in unlawful coordination to prevent certain firms and platforms from securing advertising deals.

Rumble has joined X in this lawsuit, intensifying the legal challenge faced by GARM and WFA. The complaint suggests that the misuse of brand safety standards by GARM was intended to boycott specific platforms and undermine their advertising capabilities.

WFA's Decision Amid Legal Battle

On Thursday, Stephan Loerke, CEO of WFA, communicated to its members the decision to cease GARM's operations. He cited the organization's limited resources as a significant factor influencing this decision.

Despite the shutdown, Loerke emphasized WFA and GARM's commitment to defending themselves in court against the lawsuit, expressing confidence in their adherence to competition regulations.

Concurrent with the lawsuit by X, a U.S. House Judiciary Committee investigation had been conducted into GARM's alleged activities. Findings from the investigation hinted that GARM had actively organized boycotts, specifically targeting particular platforms and content creators.

Judiciary Committee's Findings Support Claims

Among the accusations, the House Judiciary Committee found evidence implying that GARM's endeavors aimed to demonetize and restrict certain options for consumers. This supports X's assertion that GARM's activities had financial repercussions for the platform.

Linda Yaccarino, CEO of X, shared her perspective on the matter, pointing out the severe financial impact of GARM’s tactics on X. Yaccarino claimed that these activities have cost the platform billions of dollars.

Yaccarino also sees this development as an opportunity for industry-wide changes. "No small group should be able to monopolize what gets monetized. This is an important acknowledgment and a necessary step in the right direction," she remarked. "I am hopeful that it means ecosystem-wide reform is coming."

Differing Views on GARM's Alleged Conduct

GARM, established as a voluntary and apolitical initiative, claims to assist its members in avoiding harmful content. Nonetheless, its critics argue that the organization has shown particular biases.

Allegations have been made suggesting that GARM aimed to suppress conservative voices and collaborated with large corporations to limit certain types of speech. Accusations include targeting high-profile figures and platforms such as Elon Musk, Joe Rogan, Spotify, Fox News, The Daily Wire, and Breitbart News.

Will Gilroy, WFA spokesperson, defended GARM, rejecting the antitrust accusations. He described the claims put forth by the U.S. House Judiciary Committee as baseless.

Future of Responsible Marketing Practices

Gilroy further highlighted the continued significance and impact of GARM's efforts in the evolving landscape of digital media. He asserted that GARM's role in promoting responsible marketing practices remains crucial.

"GARM will continue to live up to its commitment to help allow its members to drive more responsible marketing practices," Gilroy stated.

As developments progress, all parties involved prepare for legal proceedings to address the contested actions of GARM and the WFA's stance.

Looking ahead, stakeholders in the industry, ranging from social media companies to marketing agencies, anticipate potential shifts in advertising norms, driven by the outcomes of this high-profile lawsuit.

Conclusion

The WFA has discontinued the operations of its nonprofit arm, GARM, following a lawsuit from Elon Musk's social media platform, X. The lawsuit, also supported by Rumble, accuses GARM of anticompetitive practices aimed at boycotting specific companies and platforms.

Despite ceasing GARM's activities, the WFA plans to challenge the lawsuit in court, asserting the organization’s compliance with competition regulations.

This case, involving testimony from a U.S. House Judiciary Committee investigation and accusations against notable corporations and media figures, portends significant implications for the future landscape of digital media advertising.