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Elon Lawsuit Shuts down Media Watchdog · Elon Musk Podcast

• 0:01
  Hey everybody. Welcome back to the Elon Musk.
• 0:04
  Podcast this. Is a show where we discuss.
• 0:07
  The Critical. Crossroads that shape SpaceX
• 0:09
  Tesla X. The Boring Company and
• 0:12
  Neurolink. I'm your host, Will.
• 0:15
  Walden. The Global Alliance for
• 0:17
  Responsible Media or GARM, which is an influential group within
• 0:21
  the advertising sector, has reportedly suspended its
• 0:24
  operations now. This happened in the wake of an
• 0:28
  antitrust lawsuit filed by Elon Musk's social media company X,
• 0:32
  formerly known as Twitter, and the decision to halt Garms
• 0:36
  activities was communicated to members by the World Federation
• 0:40
  of Advertisers on Thursday, which is the WFA.
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  An internal e-mail reported by Business Insider reveals that
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  the WFACEO emphasized the difficulty of the decision,
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  sending Garms status as a not-for-profit organization with
• 0:55
  very limited resources in his communication.
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  They expressed that the WFA and Garm's intent to challenge the
• 1:02
  allegations made by X in court, asserting confidence that the
• 1:05
  legal process would confirm their adherence to competition
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  rules. However, despite this
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  confidence, the resource constrains faced by GARM have
• 1:13
  necessitated the suspension of its operations for now, and the
• 1:18
  lawsuit in question was filed by X in the US District Court for
• 1:22
  the Northern District of Texas, accusing GARM of conspiring to
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  withhold advertising revenue from the platform.
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  Rumble Inc, a video sharing platform similar to YouTube,
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  also joined X in the legal action, alleging that a
• 1:36
  coalition of advertisers and agencies orchestrated by GARM
• 1:39
  had conspired to block ad revenue from flowing to certain
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  platforms, including X. Now.
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  The lawsuit specifically targets the WFA, advertising giant WPP
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  and its subsidiary Group M Worldwide, among others.
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  Now, Rumble's official account on X shared a post stating
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  Rumble has joined X to sue a cartel of advertisers and AD
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  agencies who conspire to block ad revenue from going to certain
• 2:06
  platforms and content creators. Now, this legal action has
• 2:09
  escalated tensions within the advertising industry,
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  particularly regarding how ad revenues are distributed and who
• 2:15
  controls their decisions. Now, Garms suspension marks a
• 2:19
  temporary victory for Musk and X, even though no court filing
• 2:23
  has been made yet. Now the CEO of X, Linda
• 2:27
  Yacarino, expressed on X that the suspension of Garms
• 2:31
  activities is a crucial step towards what she hopes will be a
• 2:34
  broader reform across the advertising ecosystem.
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  She said no small group should be able to monopolize what gets
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  monetized. This is an important
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  acknowledgement and necessary step in the right direction.
• 2:48
  But despite this, the lawsuit may have unintended consequences
• 2:52
  for X's advertising business. The founders of a watchdog group
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  called Check My Ads Institute, or CMAI, warned in an op-ed that
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  the lawsuit could further alienate advertisers from X.
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  They argued that everyone can see that advertising on X is a
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  treacherous business relationship for advertisers.
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  Now, this could cause some unease.
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  And the core of X's complaint lies in the allegation that GARM
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  organized a collective effort to withhold billions of dollars in
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  advertising from Twitter, particularly after Musk's
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  acquisition in late 2022. This action, according to X, was
• 3:31
  motivated by concerns within GARM that the platform had
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  strayed from established brand safety standards under Musk's
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  leadership. Now, GARM, which was established
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  in 2019, was originally created in response to incidents like
• 3:45
  the Christchurch mosque shootings in New Zealand, where
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  the perpetrator live streamed the attack on Facebook.
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  The group was designed to help advertisers avoid having their
• 3:54
  content up here alongside illegal and harmful material,
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  and over the years, GARM claimed to successfully reduce the
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  prevalence of such problematic ads from six point 1% to just
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  one point .7% between 2020 and 2023.
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  Now, concerns about brand safety resurfaced when Musk took over
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  Twitter, as his more relaxed approach to content moderation
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  led to fears among advertisers that their ads could be placed
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  next to misinformation. Hate.
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  Speech and other objectable content.
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  These concerns have led to a significant drop in advertising
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  revenue for the platform, which remains heavily reliant on ads
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  as its primary source of income. Now, Musk's approach to handling
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  advertisers has been contentious, to say the least.
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  He has openly clashed with brands that have pulled their
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  spending from X, sometimes using aggressive rhetoric.
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  For instance, last year he responded to advertisers leaving
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  the platform with a very blunt message.
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  He said go F yourselves. Now.
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  This confidential stance has not only strained relationships with
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  advertisers, but also further stabilized X's ad revenue
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  stream. Now, despite occasional claims
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  from X's leadership that the platform's ad business is
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  improving, the lawsuit against GARM suggests ongoing
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  difficulties. Linda Yacarino from X
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  acknowledged in a video release Monday that the alleged
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  conspiracy to boycott X posed a severe threat to the company's
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  future, saying that the loss of advertising dollars has placed
• 5:29
  the platform quote at long term risk.
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  Now, the shutdown of Garam may have broader implications for
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  the advertising industry, though, particularly for other
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  watchdog groups. Now, the case echoes previous
• 5:43
  legal actions taken by X under Musk's leadership, where the
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  company has targeted organizations that it perceives
• 5:49
  as adversarial to its business interests.
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  Now X has also filed lawsuits against the Center for
• 5:57
  Countering Digital Hate, or CCDH, and Media Matters for
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  America, both of which have raised concerns about the
• 6:03
  content on the platform and its impact on advertisers.
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  The CCDH lawsuit was dismissed by a federal judge who
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  criticized the suit as an attempt to penalize the
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  nonprofit for exercising its right to free speech.
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  However, the ongoing legal battles, including the one with
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  Media Matters which highlighted the presence of anti-Semitic and
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  pro Nazi content on X, have already caused significant
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  damage to X's relationships with major advertisers, some of whom
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  pulled their ads following those reports but garms closure.
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  While a short term victory for Musk NX raises questions about
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  the future of advertising self regulation.
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  This coalition, which was formed with the intent to create and
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  enforce standards around brand safety, has not been sidelined,
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  has now been sidelined by the very forces it sought to
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  regulate. And as a result, there may be a
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  chilling effect on similar initiatives within the industry,
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  as other organizations may fear similar legal reprisals.
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  Now, the broader impact on X's business remains uncertain.
• 7:06
  It hasn't been that long, and the platform's advertising
• 7:09
  revenue has already suffered a nearly 50% decline since Elon
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  Musk acquired it. That's a downturn that's driven
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  in a large part by concerns over content safety and the
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  suitability of the platform for major brands.
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  Musk's direct involvement in promoting content that many
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  advertisers find objectable has only exacerbated those concerns,
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  leading to further erosion of trust between X and its
• 7:34
  advertisers. Hey, thank you so much for
• 7:43
  listening today. I really do appreciate your
• 7:46
  support. If you could take a second and
• 7:47
  hit this subscribe or the follow button on whatever podcast
• 7:50
  platform that you're listening on.
• 7:52
  Right now I greatly appreciate. It it helps out the show
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  tremendously and you'll. Never.
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  Miss an episode and each episode is about 10 minutes or less.
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  To get you caught up quickly. And please, if you want to
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  support the show even more. Go to Patreon dot.
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  Com slash. Stage 0.
• 8:10
  And please take care of yourselves and each other, and
• 8:12
  I'll see you tomorrow.