Friday, August 09, 2024

Why Elon Musk's case against advertising boycott could actually succeed

Now, I'm no legal eagle, but how on earth can Elon Musk be in a position to sue over the decision of a bunch of ex-Twitter advertisers to withhold their business from Musk's new (and very different) X?

He is alleging that a concerted "massive advertiser boycott" by the World Federation of Advertisers violates antitrust and competition laws and, more pertinently, deprives his company of billions of dollars in revenue. The boycott was organized by the advertising group's brand safety initiative, the so-called Global Alliance for Responsible Media (GARM), which was established to address the challenge of the monetizing of harmful content on social media through advertising. Reasonably enough, it has called out Musk's gutting of X's oversight system, and his reinstatement of the accounts of many openly racist, sexist, anti-democratic and generally inflammatory users. 

As, you would think, is their right. After all, companies can choose where to spend their own advertising dollars, can't they? But Musk's push-back against this boycott effectively asserts that companies CANNOT just stop advertising overnight, which is an outrageous contention when you stop and think about it. 

This is not to say that Musk will win the case, but the very fact that the case is seriously being heard is alarming enough. And legal experts seem to think that there is indeed a case to be made that the advertising association's actions may in fact constitute an illegal boycott. The issue is that GARM's very raison d'etre results in an illegal collaboration of its member companies, overruling any individual company decisions, and this is what Musk is targeting with this legal case. 

The legal bar to prove conspiracy is, however, notoriously high, so many legal commentators believe that the case will ultimately fail on proof of agreement. But that is by no means a sure bet, and the spectre of companies not being able to advertise according to their own consciences remains a distinct possibility. Ridiculous!

In the meantime, Musk just continues to make himself more and more unpopular. But then, when has he ever cared about that?

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