Billionaire Elon Musk threatened legal action Thursday against an alliance that includes some of the world’s biggest companies over an “advertising boycott racket” that has targeted contributed to a revenue crunch at his social media platform X.
Musk, who bought the company formerly known as Twitter for $44 billion in 2022, made the claim in response to a video of Daily Wire founder Ben Shapiro’s Congressional testimony this week on alleged advertiser collusion against right-leaning platforms.
“Having seen the evidence unearthed today by Congress, X has no choice but to file suit against the perpetrators and collaborators in the advertising boycott racket,” Musk wrote on X. “Hopefully, some states will consider criminal prosecution.”
Shapiro testified Wednesday before a House Judiciary panel in a hearing entitled “Collusion in the Global Alliance for Responsible Media (GARM).”
GARM is an initiative established by the World Federation of Advertisers — which includes Disney, Coca-Cola, Toyota and Hershey among its dozens of members — to “address the challenge of harmful content on digital media platforms and its monetization via advertising,” according to its website.
WFA’s members account for roughly 90% of all global advertising spending – totaling nearly $1 trillion per year.
A damning House interim staff report compiled ahead of the hearing focused on questionable conduct by GARM chief Robert Rakowitz, who “denied organizing a boycott or recommending that GARM members stop advertising on Twitter” in an interview with investigators.
However, in one internal email dated Feb. 9, 2023, Rakowitz appeared to brag that X was “80% below revenue forecasts” since GARM challenged Musk on brand safety issues. Rakowitz testified that the email was meant as a “self-effacing joke.”
The House report also found a bias against conservative media outlets.
One section detailed an email conversation in Oct. 2021 between Rakowitz and John Montgomery, an executive vice president of global brand safety at GroupM – the world’s largest media buying agency.
The two executives “discussed a strategy of blocking certain news outlets like Fox News, The Daily Wire, and Breitbart News,” the report states.
“As much as we hated their ideology and bulls—t, we couldn’t really justify blocking them for misguided opinion,” Montgomery said, referring to Breitbart. “We watched them very carefully and it didn’t take long for them to cross the line.”
Representatives for GARM, GroupM and X did not immediately return a request for comment on Musk’s post.
In the opening statement shared by Musk, Shapiro urged Congress to rein in what he described as “censorship cartels like GARM and executive branch agencies” that disagree with conservative viewpoints.
The subcommittee said it was weighing “whether existing civil and criminal penalties and current antitrust law enforcement efforts are sufficient to deter anticompetitive collusion in online advertising.”
