Shadowy ad cartel that targeted news outlets faces legal firestorm after bombshell House report
At least two Republican state attorneys general are weighing possible legal action against members of a shadowy cabal that reportedly controls 90% of global marketing spending following allegations that they colluded to withhold ad dollars from conservative outlets, The Post has learned.
The Global Alliance for Responsible Media was accused of leading a coordinated effort to squelch online free speech and restricts ads to a slew of news outlets — including The Post — in likely violation of federal antitrust laws, the Republican-led House Judiciary Committee said in its alarming report this week.
Representatives for the Republican state attorneys general of Montana and Missouri confirmed that they are examining the evidence uncovered by the House panel.
“We’re looking into what actions the attorney general may be able to take, as it appears there may be anti-trust violations,” a spokesperson for Montana Attorney General Austin Knudsen told The Post.
A spokesperson for Missouri Attorney General Andrew Bailey said his office is aware of the report and “looking into the matter.”
GARM, an initiative of the World Federation of Advertisers, represents dozens of the largest companies and ad organizations, including Disney, Coca-Cola, Toyota and Walmart. Its members spend nearly $1 trillion per year on ads.
The House Judiciary Committee’s ongoing probe will include demands to specific companies who are members of GARM to turn over relevant information in the near future, House GOP sources told The Post.
The committee will release more reports and potentially hold more hearings detailing its findings as the investigation proceeds, the sources added.
“Just because they haven’t been targeted yet doesn’t mean they shouldn’t expect something,” one House GOP source who requested anonymity told The Post. “It’s definitely not over.”
The report could open the door for major lawsuits from additional states and the likes of billionaire Elon Musk. The panel’s references to potential antitrust violations also could open a path to action by the Justice Department – especially if former President Donald Trump wins the upcoming election.
The probe is focused on whether GARM and its members violated Section 1 of the Sherman Antitrust Act, which governs illegal restraint of trade. Depending on the severity of the alleged wrongdoing, that could mean either civil or criminal charges.
The panel is considering whether to make an official referral to the Justice Department for action against the advertising cabal, sources said.
The House Judiciary’s report is “a solid first effort in untangling this Gordian knot” and could compel more state attorneys general to get involved, according to Joel Thayer, a tech policy lawyer and president of the Digital Progress Institute.
Potential involvement the DOJ is a long shot and would likely require one or states to craft a compelling argument, he added.
“We need to clarify a few things in the report, but I think it gives a good framework by which state AGs can enact subpoenas against GARM and potentially these other companies to get a better sense of how GARM works, how GARM makes decisions,” Thayer said. “Then, they can construct a case around anticompetitive effects.”
The report compiled emails and testimony by far-left 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.”
Emails also showed that Rakowitz encouraged GARM members to adopt the recommendations put forth by “independent fact checkers” such as the Global Disinformation Index and NewsGuard.
GDI, a UK-based organization, has received funding from the US State Department as well as groups linked to George Soros.
NewsGuard, which scans web sites and news sources and rates them for reliability, is the subject of an investigation by the House Oversight Committee, which said it was concerned about “censorship campaigns” and “projected First Amendment speech.”
John Gable, CEO of anti-bias group AllSides, said that Rakowitz’s reliance on GDI and NewsGuard is akin to a “Ministry of Truth approach” whereby the public is exposed to just one political agenda.
Gable told The Post that the House Judiciary Committee obtained emails which showed that Rakowitz was in direct contact with GroupM, the number one ad buyer in the world which is also part of the WPP conglomerate.
“Thanks to this congressional report, we see there was direct correspondence with GroupM talking about excluding conservative outlets,” Gable said.
Particularly problematic was Rakowitz’s directive to rely on GDI.
“GDI may be self righteously fighting a good fight like the progressive wing of the Democratic Party, but they’re overly biased with a partisan agenda and they were not trustworthy,” Gable said.
According to Gable, GDI uses “exclusion lists and blacklists that are shared privately” and “which are indirectly and directly shaping the flow of potentially billions of dollars in advertising expenditures.”
“When these lists are applied in biased manners, the repercussions are obvious when it comes to the national discourse,” he said.
Gable also hit out at NewsGuard, which in his words are “not transparent in their ratings.”
NewsGuard “goes to great lengths to prevent people from seeing their ratings,” he said.
Gable added that it was reasonable to assume that “each major advertiser is maintaining its own exclusion and inclusion lists” of which outlets to do business with.
In Oct. 2021, Rakowitz and John Montgomery, a former executive vice president of global brand safety at world’s largest media buying agency GroupM, “discussed a strategy of blocking certain news outlets like Fox News, The Daily Wire, and Breitbart News,” the report states.
Elsewhere, GARM allegedly collaborated with London-based nonprofit called the Global Disinformation Index that labeled The Post and nine other outlets, including Reason magazine and RealClearPolitics, as having the “greatest level of disinformation risk.”
One GARM employee questioned the initiative’s reliance on the GDI rankings, calling it “bewildering” that the group “somehow placed the NYPost as ‘at most risk’ paper in the USA for disinformation.”
“The extent to which GARM has organized its trade association and coordinates actions that rob consumers of choices is likely illegal under the antitrust laws and threatens fundamental American freedoms,” the report said.
The WFA defended its practices in a lengthy statement and said it has been cooperative with the House Judiciary’s probe.
“The report released on July 10 does not include the 168-page transcribed interview which effectively clarifies questions on GARM’s adherence to competition law policy and practices, that GARM is a voluntary organization, and that guidance from GARM is non-binding,” the WFA said in a statement. “This transcript also clarifies the context of documents selected by the Committee and details of technical aspects of GARM’s work.”
Rakowitz did not return The Post’s request for comment.
Other outlets targeted by GARM and its members included podcaster Joe Rogan and Musk’s social media site X. After the report surfaced, Musk tweeted that X “has no choice but to file suit against the perpetrators and collaborators in the advertising boycott racket.”
Rep. Matt Gaetz, a member of the House Judiciary Committee, pushed for a crackdown on GARM in a statement to The Post.
“Time and again, we’ve seen major corporations colluding with government to censor speech,” Gaetz said. “They hide the ball with a thicket of shell companies and pretend it’s not collusive, but when Congress shines the light on the system, these shell companies like the Stanford Internet Observatory are forced to shut down.”
“The Orwellian-named Global Alliance for Responsible Media is one such entity, and it deserves further scrutiny by state and federal regulators and law enforcement,” Gaetz added.
