Texas Attorney General Ken Paxton has initiated an investigation into the World Federation of Advertisers (WFA) to determine whether its members engaged in coordinated efforts to boycott certain social media platforms, particularly X (formerly Twitter). The investigation follows X’s antitrust lawsuit filed against the WFA in August, which claimed that several advertisers and trade organizations orchestrated a “systematic illegal boycott” of the platform, significantly impacting its advertising revenue.
In a press release, Paxton stated that trade organizations and companies should not be allowed to collude to block revenue from entities they disagree with. He emphasized that this investigation is part of an effort to hold the WFA and its members accountable if they are found to have conspired to harm certain organizations.
Many prominent companies, including IBM, Coca-Cola, and CVS Health, reduced or stopped their advertising on X after Elon Musk’s acquisition of the platform in 2022. The exodus of advertisers escalated in November 2023, after reports from the Center for Countering Digital Hate and Media Matters raised concerns about X’s failure to moderate harmful content, further fueling criticism of Musk’s management. This resulted in significant reductions in advertising budgets from major brands, including Apple and Disney.
X has been targeting these advertisers and ad groups, alleging that the reduction in ad spending was not due to individual decisions, but rather a collective effort to harm the platform financially. Now, Texas AG Paxton is exploring whether the WFA’s previous group, the Global Alliance for Responsible Media (GARM), encouraged brands to avoid platforms like X by setting brand safety standards that led to these boycotts.
GARM, which was dissolved in August, had been a voluntary organization focused on defining hate speech and misinformation for advertisers. A report from the U.S. House of Representatives Judiciary Committee earlier this year suggested that GARM and its members participated in coordinated actions to limit revenue for platforms, including podcasts and news outlets deemed problematic.
While some major advertisers have resumed their spending on X, they are reportedly doing so at lower levels than before. X recently announced a deal with Unilever to restore ad spending, while dropping its lawsuit against the company. The investigation from Texas adds another layer of scrutiny to the ongoing legal and regulatory challenges facing both X and the advertising industry.
