Texas Attorney General Ken Paxton has decided to investigate the World Federation of Advertisers (WFA) to see if its members worked together to boycott certain social media platforms. Although the press release did not mention any specific platforms, it is likely that one of them is Elon Musk’s X, which sued the WFA for antitrust violations in August. The lawsuit claimed that advertisers were illegally boycotting the platform.
Paxton stated that trade organizations and companies cannot collaborate to block advertising revenue from entities they want to undermine. This investigation aims to hold the WFA and its members accountable for any attempts to harm organizations they disagree with.
Many of the WFA’s members, including well-known brands like IBM, The Coca-Cola Company, and CVS Health, have decreased or completely stopped advertising on X since Elon Musk took over the company. In November 2023, there was a significant decrease in advertisers, including Apple and Disney, following reports from the Center for Countering Digital Hate and Media Matters regarding X’s failure to moderate its platform and remove illegal or hateful content. A White House spokesperson even criticized Elon Musk for posting content that was deemed antisemitic and racist.
Elon Musk responded to Paxton’s investigation by stating that it is still a major problem. The investigation focuses on GARM, a now-defunct not-for-profit organization within the WFA that provided guidelines for understanding hate speech, brand safety, and misinformation.
X’s CEO, Linda Yaccarino, mentioned a report from the U.S. House of Representatives Judiciary Committee that highlighted how GARM and its members participated in boycotts to demonetize certain platforms and content. The investigation seeks documents and information from GARM to determine if they instructed brands to boycott social media platforms that did not meet their brand safety standards.
Despite the ongoing investigation, some advertisers have started to resume ad spending on X, although at lower rates than before. Companies like Comcast, IBM, and Disney have returned to the platform this year. Additionally, X reached an agreement with Unilever to resume ad spending and dropped its claims against the company, which was previously accused of participating in the alleged boycott.
Both X and the World Federation of Advertisers have not responded to requests for comment from TechCrunch. The investigation will shed more light on the alleged boycott and collusion among advertisers and ad groups, potentially impacting the advertising industry’s future practices.
