Analyzing the Elon Musk lawsuit.

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X Corp has sued the World Federation of Advertisers in an antitrust action. It is my understanding that Rumble is joining this lawsuit—though the docket doesn’t reflect that yet.

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The suit alleges that WFA and GARM conspired with dozens of advertisers and others, to collectively withhold billions of dollars in advertising revenue from X. The suit argues that’s that the boycott enacted was an attempt to force Twitter to adhere to certain brand safety guidelines they wanted.

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In order to be a member of GARM, you must agree to adopt, influence, and enforce their “brand safety standards.” One condition of this is withholding your ad dollars from platforms GARM and WFA deem to be “non-compliant” with THEIR “brand safety standards.” They say the word, and advertisers boycott to keep their membership.

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There was a mass boycott after Twitter’s ownership changed hands. As per the complaint, even some advertisers wanted to begin advertising on Twitter again and went to GARM for “permission.” These actions were counterintuitive to their own self-interest as brands.

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GARM celebrated an 80% reduction in ad revenue for Twitter. The actions they (and the advertisers) took are counter to a free marketplace. Here is where the anti-trust comes in—these advertisers took action COUNTER to their economic interests BECAUSE of their membership in this parent organization. If there was a competitive market, each platform would set the standards best for that platform, and the sheer efficiency of those standards would dictate the success (or failure) of advertisers.

MORE:

www.uncoverdc.com/2024/08/07/analysis-x-corp-and-rumble-sue-garm-in-antitrust-suit


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