Attorney General Ken Paxton has announced an investigation into a potential anticompetitive scheme involving advertising companies coordinating to withhold ad revenue from certain social media platforms.
The investigation into the World Federation of Advertisers (WFA) aims to explore whether there has been a conspiracy to suppress advertising on platforms deemed undesirable by specific interest groups.
The investigation centers on whether the WFA and its sub-organization, the Global Alliance for Responsible Media (GARM), played a role in pressuring advertisers to refrain from purchasing advertising space on certain social media platforms. According to TechCrunch, GARM closed its doors earlier this year after being named in a lawsuit by social media platform X.
This antitrust lawsuit, while not explicitly named as an impetus for Paxton’s investigation, was filed by X against the WFA in August. It alleges that a boycott occurred following Elon Musk’s purchase of the platform.
Paxton’s office expressed concerns that member companies at WFA may have colluded to initiate a boycott against social media platforms that are seen as violating certain “Brand Safety Standards.” These standards, set by the WFA and GARM, are intended to ensure that advertisements do not appear alongside content deemed inappropriate or harmful.
However, according to Paxton, this coordinated effort could harm market competition and violate the Texas Free Enterprise and Antitrust Act of 1983, prohibiting anticompetitive practices. Paxton suggests that this push to adhere to such standards may be part of a broader agenda to selectively undermine certain platforms by pressuring advertisers to withhold ad spending, potentially causing economic harm to the targeted platforms.
While companies have the right to choose where and when they place ads, Paxton argues that a collective effort to block advertising from particular platforms could distort competition, limit opportunities for advertisers, and restrict free enterprise.
“Trade organizations and companies cannot collude to block advertising revenue from entities they wish to undermine,” stated Paxton. “Today’s document request is part of an ongoing investigation to hold WFA and its members accountable for any attempt to rig the system to harm organizations they might disagree with.”
Paxton also took aim at the Biden administration’s Department of Justice. “It is completely unacceptable and un-American that the Department of Justice under the Biden Administration failed to enforce antitrust laws against its perceived political allies.”
Musk responded to Paxton’s announcement of the investigation, stating “It’s still a major problem.”
WFA did not respond to Texas Scorecard’s request for comment before publication.
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