Billionaire Elon Musk announced potential legal action on Thursday against a coalition that includes some of the world’s largest corporations, accusing them of engaging in an “advertising boycott racket” that has contributed to financial difficulties for his social media platform, X.
Musk, who acquired the platform formerly known as Twitter for $44 billion in 2022, made this statement in reaction to a video showing Daily Wire founder Ben Shapiro’s Congressional testimony about alleged advertiser collusion against right-leaning platforms.
“After reviewing the evidence revealed today by Congress, X has no option but to file a lawsuit against those responsible for and involved in the advertising boycott racket,” Musk wrote on X. “We hope some states will pursue criminal charges.” Shapiro testified on Wednesday before a House Judiciary panel during a hearing titled “Collusion in the Global Alliance for Responsible Media (GARM).”
GARM, an initiative created by the World Federation of Advertisers (WFA), includes major companies like Disney, Coca-Cola, Toyota, and Hershey among its members. According to its website, GARM aims to “tackle the issue of harmful content on digital media platforms and its monetization through advertising.”
WFA members represent about 90% of global advertising spending, totaling nearly $1 trillion annually. A House interim staff report prepared for the hearing highlighted questionable actions by GARM chief Robert Rakowitz, who denied orchestrating a boycott or advising GARM members to cease advertising on Twitter during an interview with investigators.
However, an internal email dated February 9, 2023, showed Rakowitz seemingly boasting that X was “80% below revenue forecasts” after GARM confronted Musk on brand safety concerns. Rakowitz later claimed the email was intended as a “self-effacing joke.” The House report also indicated a bias against conservative media outlets.
One section of the report detailed an October 2021 email conversation between Rakowitz and John Montgomery, executive vice president of global brand safety at GroupM, the world’s largest media buying agency.
The two executives discussed a strategy to block certain news outlets, including Fox News, The Daily Wire, and Breitbart News. “Although we disliked their ideology and rhetoric, we couldn’t justify blocking them for misguided opinions,” Montgomery said, referring to Breitbart. “We monitored them closely, and it wasn’t long before they crossed the line.”
Representatives for GARM, GroupM, and X did not immediately respond to requests for comments on Musk’s post. In his opening statement shared by Musk, Shapiro called on Congress to curb what he referred to as “censorship cartels like GARM and executive branch agencies” that oppose conservative viewpoints.
The subcommittee stated it is considering “whether current civil and criminal penalties and antitrust law enforcement efforts are adequate to prevent anticompetitive collusion in online advertising.”