A US Congressional hearing on the placement of digital ad dollars has seen the advertising industry at large branded as a “cartel” that is seeking to de-fund right-wing media outlets and silence conservative voices in a coordinated attack on free speech.
The session, Collusion in the Global Alliance for Responsible Media (GARM), saw conservative commentator and co-founder of right-wing news site The Daily Wire, Ben Shapiro lambast the advertising industry.
“When a conservative competitor to the legacy media arises, members of the legacy media and their political allies rush to paint such competitors as dangerous. The commentator Kara Swisher of The New York Times, for example, told the head of YouTube that my videos on Daily Wire were a ‘gateway drug’ that would lead children, including her teenage son, to watch neo-Nazi content (never mind the fact that I am an Orthodox Jew),” Shapiro told the Republican-dominated committee.
“Social media companies react to such threats. They have responded by adopting the standards of third-party Left-wing “informational safety” groups like GARM.”
GARM, of course, will be familiar to many in the ad industry with its brand safety floor and sustainability frameworks that create a common understanding of what harmful and sensitive content is and a common understanding of where ads should not appear. Essentially, it gives advertisers a set of guidelines about online content that tries to ensure that their ad dollars are spent with responsible media platforms and that media platforms ensure that ads do not appear next to content that could damage brands’ reputations.
That, of course, seems to be lost on the likes of Musk and Shapiro who believe that advertisers have a compulsion to give their preferred sites and platforms ad dollars.
“In reality, GARM acts as a cartel. Its members account for 90 per cent of ad spending in the United States–almost $US1 trillion ($AU1.41 trillion). In other words, if you’re not getting ad dollars from GARM members, it’s nearly impossible to run an ad-based business. And if you’re not following their preferred political narratives – the ones Kara Swisher and Dianne Feinstein would follow – you will not be deemed ‘brand safe,'” said Shapiro.
“Cartel” Member GroupM’s View
Christian Juhl, the global CEO of GroupM, however, told lawmakers that there are very good reasons why advertisers employ GARM’s frameworks.
“One of marketers’ biggest fears is that years, sometimes even generations, of reputation could evaporate overnight as a consequence of bad ad placement. Such scenarios can erase both brand and business value in hours. Companies spending many millions of dollars on their advertising do not want to risk their brand on a strategy that could backfire on their reputation and business value,” he said.
“In 2017, news outlets reported that some of the world’s biggest companies’ advertisements were unwittingly being placed next to content as extreme as propaganda for ISIS. Unsurprisingly, concern from consumers and clients was significant. Brands also had to contend with reports of Russian troll farms working to disrupt presidential elections. And, most recently, brands had to develop advertising strategies in the context of a pandemic that divided Americans. In response to these issues and broader consumer sentiment, advertisers have placed a growing emphasis on brand suitability and accountability. Brands consistently inform us that they do not want to advertise next to hot-button or divisive content. They want reliable environments.
He also made clear that “GroupM does not police content or have control over publishers.”
“Cartel” Member Unilever’s View
Herrish Patel, US president of Unilever and a current GroupM client with its global media account out for review, added that “the rise of user-generated social media content and other online content” had caused reputational damage to some of its brands. GroupM agency Mindshare has controlled the Unilever account in Australia and New Zealand since September last year.
“In one early example, ads for Dove soap—which has dedicated more than twenty years to its Campaign for Real Beauty—were appearing adjacent to content glorifying domestic violence and rape, significantly harming the brand and alienating consumers. Similarly, the Unilever brands that are trusted and appeal broadly to all Americans are not served by content that is divisive or politically polarising. For example, in 2020, we pulled back from social media advertising after we determined that the polarising content would not serve the brands or add value to the brands’ places in the market,” he said.
“As the Committee examines issues central to this hearing, I want to be very clear about one critically important fact: Unilever, and Unilever alone, controls our advertising spending. No platform has a right to our advertising dollars. When a platform offers advertising inventory for purchase, it is up to that platform to demonstrate to us that the content reaches the consumers we seek to target and in a manner that serves our brands’ business interests.”
A Competition & Antitrust Lawyer’s View
The Committee also called on Loyola University Chicago School of Law professor Spencer Weber Waller to give his expert view on whether the actions of the “GARM cartel” amounted to anticompetitive actions.
“I am concerned that the antitrust concerns expressed in the announcement of today’s hearing and the letters sent to companies here today do not correspond to the consensus understanding of the United States antitrust laws by most courts and commentators,” he said.
Waller went through the main principles of the Sherman Act (the core for US antitrust statutes) and believes that advertisers are not violating the law, because there is “no proof of agreement” that they will not place ad dollars on right-wing media sites or platforms.
“Even where firms act in a similar, or identical, fashion, more is needed to establish an agreement that violates Section One of the Sherman Act. The plaintiff must show that two or more economically independent actors have undertaken a conscious commitment to act together to achieve some unlawful objective,” he added.
“For example, two or more firms that separately choose to use the same widely available public information, and independently decide to pursue a similar course of conduct, do not necessarily violate Section One. Something more is needed.”
Correlation, then, does not equal causation.
He also added that “The activities of GARM do not appear to be a cartel.”
“Cartels are one of the most serious concerns of antitrust law. Cartels normally involve an agreement
between competitors (sometimes assisted by third parties) to fix prices, rig bids, limit production, divide
markets, diminish quality, or interfere with innovation. This does not appear to be the case with the activities of the GARM relevant to today’s hearings.”
Webber said that because the GARM definitions are public, there is no secret collusion between advertisers. He also said that “characterising GARM’s conduct as a boycott does not change the antitrust analysis.”
“Group boycotts today are only per se unlawful when they are used to implement an otherwise per se unlawful cartel type agreement, or when firms with market power collectively deny a competitor access to some key source of supply it needs to survive,” Webber told the Committee.
As Unilever, GroupM, et al. are not competitors with X or Shapiro’s Daily Wire, any boycott — which has not been proven — would not be illegal.
Closing his speech, Juhl said: “Adoption of GARM’s definitions is and always has been voluntary. Some companies may choose to adopt one or more of GARM’s brand safety definitions, as we have; others may choose not to adopt any. That is their right.”
