A lawsuit against a group of advertisers who colluded to hide money on social media: Check My Ads vs. Rumble

A group of advertisers have been accused of holding an “illegal boycott” against the platform. The lawsuit states that dozens of brands colluded to hide billions of dollars in advertising revenue from the World Federation of Advertisers.

A separate post from Elon Musk said he “strongly encourage[s] any company who has been systematically boycotted by advertisers to file a lawsuit,” as there could also be “criminal liability” under the Racketeer Influenced and Corrupt Organizations (RICO) Act — a law that aims to crack down on organized crimes.

It’s not clear how well X’s lawsuit will fare in court because, as pointed out by Techdirt, the ability to choose where to advertise is protected under the First Amendment. The ad tech watchdog group Check My Ads similarly states that advertisers have the right “to not send money to a platform that promotes hate and conspiracies.”

Rumble, a right-wing video site founded more than 10 years ago has filed a similar lawsuit, it announced on Tuesday. The company posted thatGARM was part of a conspiracy to create an advertiser boycott of Rumble and others.

X’s lawsuit contends that advertisers in the past had to individually strike deals with social media companies to set boundaries around what types of content they would sponsor. Advertisers have been able to establish industry standards for content moderation thanks to GARM. GARM is too much of a control over the content social media platforms allow, according to X.

Each social media platform has set brand safety standards that are optimum for that platform and for its users, and advertisers can choose the platforms that they advertise on. Collective action among competing advertisers to dictate brand standards to be applied by the social media platforms allows the group of advertisers with market power to ignore the interests of consumers.