Ad Industry Group GARM Suspends Operations After Lawsuit Filed by X

The World Federation of Advertisers (WFA) announced today that it is suspending the operations of its Global Alliance for Responsible Media (GARM) program. This decision comes just days after the social media platform X, formerly known as Twitter, filed a lawsuit against GARM and the WFA alleging the industry group illegally coordinated an advertiser boycott of X.

According to Stephan Loerke, CEO of the WFA, the choice to pause GARM was a difficult one. As a not-for-profit organization with limited resources, continuing operations in the face of X's legal action presented challenges. However, Loerke stated that the WFA and GARM plan to vigorously contest X's allegations in court. They remain confident that the outcome will demonstrate GARM's full compliance with competition regulations.

X's lawsuit claims that GARM has caused the platform to lose billions in ad revenue by advising marketers to avoid X, especially following Elon Musk's acquisition of the company last year. The basis for these claims comes from a report submitted to the House Judiciary Committee suggesting GARM steered advertisers away from conservative-leaning outlets in order to choke off their income, potentially violating the Sherman Antitrust Act.

While most legal experts believe X's case against GARM has little merit, the act of initiating costly litigation against a relatively small non-profit could achieve X's aims even without a favorable verdict. X has previously taken similar legal action against other research groups critical of the platform's handling of hate speech and offensive content under Musk's leadership. Some, like the Stanford Internet Observatory, have had to shutter due to mounting legal expenses from conservative organizations.

The Center for Countering Digital Hate (CCDH) released a report this week detailing 50 instances so far this year where Musk himself amplified misinformation or misleading content to his over 150 million followers. None of these posts received a "Community Note" to provide context or corrections, raising doubts about the efficacy of X's user-driven fact-checking system.

Musk has openly stated his views will take precedence over X's profitability, even if it means losing advertisers. He's gone as far as telling concerned advertisers to "go f*** themselves" if they disagree with his approach. This stance, combined with an increasing association with conspiracy theories and extremism, has driven many major brands away from the platform.

Some speculate X's lawsuit against GARM, regardless of its legal foundations, could intimidate other watchdog groups and researchers into silence to avoid expensive legal battles. With critics sidelined, X may have an easier time winning back skittish advertisers unaware of the ongoing risks.

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