The World Federation of Advertisers (WFA) will discontinue its Global Alliance for Responsible Media (GARM) initiative after X owner Elon Musk and CEO Linda Yaccarino announced an antitrust lawsuit against the non-profit coalition and its members.

In a statement released today (9 August), GARM confirmed the decision to suspend its activities, explaining the non-profit did not have the financial resources to fight the case in court.

“GARM is a small, not-for-profit initiative, and recent allegations that unfortunately misconstrue its purpose and activities have caused a distraction and significantly drained its resources and finances. GARM therefore is making the difficult decision to discontinue its activities,” the WFA statement read.

The decision follows accusations from X that GARM and its members had violated US competition law by creating an “illegal boycott” via coordinating with brands to “withhold billions of dollars” in ad revenue on the social media platform.

Brands being sued by X include Unilever, Mars and CVS Health.

‘This lawsuit seems misguided’: Has Musk made a mistake suing over alleged ‘boycott’?

In a post on X following the announcement, Yaccarino celebrated the news of its closure: “No small group should be able to monopolise what gets monetised. This is an important acknowledgement and a necessary step in the right direction. I am hopeful that it means ecosystem-wide reform is coming.”

However, people across the industry have shared disappointment about the decision. IPA director general Paul Bainsfair says GARM served an “important role” in “tackling illegal or harmful content online, raising standards across the board in the process.”

“Illegal and harmful content on digital media platforms remains a significant challenge for our industry, and one that will require cross-industry collaboration to solve,” he adds.

In light of the news, ISBA’s director general Phil Smith reaffirmed the industry body’s commitment to “user and brand safety online”, while emphasising its position that advertisers should make their own decisions regarding advertising investments.

“We have been consistent in our strong support for platform safety and for a brand-safe environment, where our members’ advertising does not appear next to unacceptable or harmful content,” he said.

“ISBA has also been consistently clear that every advertiser must make their own individual decisions on advertising investment – and every advertiser has the right to spend where it sees fit.”

What does this mean for brands? The closing of GARM is not likely to make relations between the billionaire and the industry any better.

In a LinkedIn post, Marc Zander, chief client officer at Teads, expressed his gratitude for GARM in light of the “sad” news.

“Surely Musk’s latest action will do more to make advertisers cut investment in X than anything GARM might have done. What goes around…comes around,” he wrote.

Claire Atkins, CEO of Check My Ads, echoed this sentiment in a LinkedIn post: “Advertisers know a bad ad placement when they see one. The reality is today’s decision means even more advertisers will flee X and quickly so they’re not targeted in the future,” she wrote.

GARM history

Despite the recent antitrust case, Musk’s relationship with GARM began with positive dialogue. In 2022, WFA and GARM met with Musk and his new leadership team to discuss brand safety.

WFA reported the discussion centred on “common definitions, common measures, common tools and independent verification”.

GARM was created as a voluntary cross-industry initiative in 2019 in response to the Christchurch New Zealand Mosque shootings, where the attacker live-streamed the event on Facebook.

The body had the goal of effectively eliminating harmful content in ad supported digital media and had grown to more than 100 member companies, including agencies, platforms and major brands. Diageo, Mars, Mondelez, PepsiCo, P&G and Unilever were counted among GARM’s members.

Diageo’s global media director: Marketers must keep ‘laser focus’ on digital brand safety

In 2021, GARM launched its first report tracking the brand safety performance of digital platforms and setting a benchmark for progress. The alliance’s toolset had included Brand Safety Floor and the Adjacency Standards Framework, aimed at helping advertisers avoid inadvertently supporting harmful and illegal content. GARM estimates the use of these tools has reduced such ads from 6.1% in 2020 to 1.7% in 2023.

On its website, GARM is clear to stress it does not interfere with a member’s decision to invest advertising resources on a particular website or channel, remaining “apolitical” and “assiduous in its adherence to competition rules”.

Speaking to Marketing Week on Wednesday (7 August), head of advertising law at law firm Lewis Silkin, Brinsley Dresden, believed GARM’s counterargument would be that it provides tools to help members, rather than any form of enforcement.

“Crucially, [GARM’s] point will be, members are free to ignore these recommendations and these policies if they want to,” he says. “[It will say], we’re not actually requiring anybody to either place or desist from placing advertising, or imposing spending limits on anybody.”

What was the lawsuit about?

The basis of the lawsuit is a report from the US House of Representatives Judiciary Committee, published in July, which claimed GARM told its members to boycott advertising on Twitter following Musk’s purchase of the platform on 28 October 2022.

The report found “the extent to which GARM has organised its trade association and coordinates actions that rob consumers of choices is likely illegal under the antitrust laws”.

Last year, the X owner confirmed the platform’s ad revenue had fallen 50% since he acquired the business.

“We tried peace for two years. Now it is war,” Musk wrote on X on 6 August.

He also encouraged “any company who has been systematically boycotted by advertisers to file a lawsuit”.

Illegal and harmful content on digital media platforms remains a significant challenge for our industry, and one that will require cross-industry collaboration to solve.

Paul Bainsfair, IPA

However, speaking to the advertising industry in June at the Cannes Lions Festival, Musk insisted he respected the ability of individual brands to make choices over where their ads appear.

“Of course, advertisers have a right to appear next to content that they find compatible with their brands, that’s totally fine. That’s again a choice of an advertiser to appear next to content that they think fits with their brands, that’s totally cool,” he said. “But what is not cool is insisting there can be no content that they disagree with on the platform.”

His comments at Cannes follow an interview at the New York Times’ DealBook Summit in November last year, where he told advertisers to “go fuck yourself”.

“I hope they stop. Don’t advertise,” Musk told interviewer Andrew Ross Sorkin. “If the company [X] fails because of a boycott, it will be because of an advertising boycott and that will be what bankrupts the company.”