Texas Attorney General Launches Investigation into Advertiser Boycott of Social Media Platforms

Elliot Kim

Elliot Kim

November 26, 2024 · 5 min read
Texas Attorney General Launches Investigation into Advertiser Boycott of Social Media Platforms

Texas Attorney General Ken Paxton has announced an investigation into the World Federation of Advertisers (WFA) to determine whether its members conspired to boycott "certain social media platforms." Although the press release doesn't explicitly name the platforms, it's likely that Elon Musk's X is one of them, given the company's recent antitrust lawsuit against the WFA.In August, X filed a lawsuit against the WFA, alleging that advertisers orchestrated a "systematic illegal boycott" of the platform. The lawsuit came after several major brands, including IBM, The Coca-Cola Company, and CVS Health, significantly reduced or stopped advertising on X following Elon Musk's takeover. The exodus was particularly pronounced in November 2023, when Apple and Disney joined the list of departing advertisers, citing concerns over X's ability to moderate its platform and remove illegal or hateful content.The WFA's members, which include global brands like IBM, Coca-Cola, and CVS Health, have been accused of collectively conspiring to withhold billions of dollars in revenue from X. Paxton's investigation aims to uncover evidence of this alleged conspiracy, with a focus on the now-defunct Global Alliance for Responsible Media (GARM), a US-based organization founded in 2019 that created frameworks and definitions for companies to understand hate speech, brand safety, and misinformation.GARM, which closed its doors in August, was accused of telling brands to boycott certain social media platforms that violated its brand safety standards. A July report from the U.S. House of Representatives Judiciary Committee found that GARM participated in boycotts and coordinated action to demonetize platforms, podcasts, news outlets, and other content deemed disfavored by GARM and its members.In response to Paxton's announcement, Elon Musk tweeted that the issue remains a "major problem." The investigation is seen as a significant development in the ongoing saga between X and its advertisers, with potential implications for the social media landscape as a whole.In recent months, some advertisers have resumed ad spending on X, albeit at lower rates than before. Notable examples include Comcast, IBM, Disney, and Unilever, which reached an agreement with X in October to resume its ad spending in exchange for dropping its claims against the company.The investigation by the Texas Attorney General's office is expected to shed more light on the alleged conspiracy and its impact on the social media industry. As the probe unfolds, it will be crucial to monitor its developments and implications for the ongoing debate around platform moderation, free speech, and the role of advertisers in shaping the online landscape.X and the World Federation of Advertisers did not immediately respond to requests for comment on the investigation.

In August, X filed a lawsuit against the WFA, alleging that advertisers orchestrated a "systematic illegal boycott" of the platform. The lawsuit came after several major brands, including IBM, The Coca-Cola Company, and CVS Health, significantly reduced or stopped advertising on X following Elon Musk's takeover. The exodus was particularly pronounced in November 2023, when Apple and Disney joined the list of departing advertisers, citing concerns over X's ability to moderate its platform and remove illegal or hateful content.

The WFA's members, which include global brands like IBM, Coca-Cola, and CVS Health, have been accused of collectively conspiring to withhold billions of dollars in revenue from X. Paxton's investigation aims to uncover evidence of this alleged conspiracy, with a focus on the now-defunct Global Alliance for Responsible Media (GARM), a US-based organization founded in 2019 that created frameworks and definitions for companies to understand hate speech, brand safety, and misinformation.

GARM, which closed its doors in August, was accused of telling brands to boycott certain social media platforms that violated its brand safety standards. A July report from the U.S. House of Representatives Judiciary Committee found that GARM participated in boycotts and coordinated action to demonetize platforms, podcasts, news outlets, and other content deemed disfavored by GARM and its members.

In response to Paxton's announcement, Elon Musk tweeted that the issue remains a "major problem." The investigation is seen as a significant development in the ongoing saga between X and its advertisers, with potential implications for the social media landscape as a whole.

In recent months, some advertisers have resumed ad spending on X, albeit at lower rates than before. Notable examples include Comcast, IBM, Disney, and Unilever, which reached an agreement with X in October to resume its ad spending in exchange for dropping its claims against the company.

The investigation by the Texas Attorney General's office is expected to shed more light on the alleged conspiracy and its impact on the social media industry. As the probe unfolds, it will be crucial to monitor its developments and implications for the ongoing debate around platform moderation, free speech, and the role of advertisers in shaping the online landscape.

X and the World Federation of Advertisers did not immediately respond to requests for comment on the investigation.

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