X eyes legal action over Ad spend withholding

X owner Elon Musk is planning to pursue legal action to combat what he perceives as an effort to restrict free speech on the platform. 

Musk's tweet read, '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. Hopefully, some states will consider criminal prosecution.'

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.

Hopefully, some states will consider criminal prosecution. https://t.co/5W4yf1wxVO

— Elon Musk (@elonmusk) July 11, 2024

The particular system Musk is referencing to is the Global Alliance for Responsible Media (GARM), which, according to its online overview, is a 'cross-industry initiative established by the World Federation of Advertisers to address the challenge of harmful content on digital media platforms and its monetization via advertising.'

Launched in 2019, GARM seeks to create 'an industry-wide common framework of definitions to promote transparency, consistency, and control in online ad placement.' The project's main goal is to develop a unified system that ensures ads 'are not placed next to, or inadvertently funding, content that could be harmful to individuals or society.'

Platforms and advertisers, including X, participate in forming the GARM guidelines, which help advertisers feel secure about placing their ads within each app.

According to online commentator Ben Shapiro, who testified before Congress recently, the GARM member group collaborates to censor certain speech by imposing restrictions on content disliked by its members, rather than solely managing risk. 

According to Shapiro, “GARM acts as a cartel. Its members account for 90% of ad spending in the United States, almost a trillion dollars. In other words, if you’re not getting ad dollars from GARM members, it’s nearly impossible to run an ad-based business. And if you’re not following their preferred political narratives, you will not be deemed brand safe.”

Additionally, he claims, “GARM doesn’t draw the line at what is criminal, abusive, or dangerous. Their standards also include restrictions on hate speech, harassment, misinformation, or, my personal favorite, insensitive, irresponsible, and harmful treatment of debated, sensitive social issues. Those criteria are highly subjective in theory, and they are purely partisan in practice.”

Therefore, the broader concept at play involves the GARM group influencing ad spending by discouraging advertisers from running campaigns on what it considers 'unsafe' platforms, based on its criteria. Critics like Ben Shapiro argue that this practice is biased in implementation. In response, Elon Musk is preparing legal action to address these concerns.

While proving these claims in practice will likely be challenging, it's important to note that Musk's legal strategy does not target individual brands that have chosen not to advertise on X, nor does he seek to compel brands to advertise on the platform. Instead, Musk aims to establish a legal framework to challenge perceived efforts to censor speech.