House grills Unilever and GroupM execs, alleging collusion against X, right-wing sites

The House Judiciary Committee grilled executives of Unilever and WPP’s GroupM on Wednesday over charges that the Global Alliance for Responsible Media they’re part of is violating antitrust law. The session gave GARM, which has toiled in relative obscurity over the past five years, a day in the spotlight, albeit an unwelcome one. And it put Unilever U.S. President Herrish Patel and GroupM Global CEO Christian Juhl, whose company is also participating in the marketer’s global media agency review, in the awkward position of publicly defending their ad buying practices before Congress. In some cases that meant trying to explain emails by executives who have left each company. Check out the latest Ad Age events and award programs The hearing was a soap opera, literally, with a Republican legislator at one point noting that he uses Irish Spring instead of Unilever’s Dove because the latter doesn’t advertise on conservative sites, and a Democratic legislator pointing out that Colgate-Palmolive Co., maker of Irish Spring, is also a GARM member. The committee, chaired by Rep. Jim Jordan (R-Ohio), issued a detailed report accusing GARM, with a membership that includes major advertisers, agencies and media platforms, of violating the Sherman Antitrust Act. Jordan alleges the alliance, which controls 90% of global ad spending, colluded to silence conservative speech and platforms. The appendix of the report included numerous emails with discussions that touched on demonetizing sites such as Breitbart, Ben Shapiro’s Daily Wire and X (formerly Twitter). The committee obtained the emails and a variety of GARM documents via subpoenas issued last year. It’s unlikely the Biden administration would take antitrust action against GARM or its members based on the report from the Republican lawmakers. Democrats on the committee called Spencer Waller, director of the Institute of Consumer Antitrust Studies at Loyola University of Chicago and a recent advisor to the Federal Trade Commission, who testified that the evidence presented did not amount to collusion or any other elements of the Sherman Antitrust Act. In a post to X, Elon Musk termed the report “Extremely concerning,” though X rejoined GARM earlier this month after leaving the group last year. Extremely concerning! https://t.co/EF5shOhMf5— Elon Musk (@elonmusk) July 10, 2024 The report pointed to email exchanges, some referencing concerns by GARM’s Steer Committee, which includes major advertisers, about the impact of Musk’s 2022 takeover of Twitter as collusion toward a boycott. Musk, who has described himself as an independent in the past, has espoused right-leaning views since taking over Twitter. Unilever avoids all kinds of news Patel attempted to throw cold water on the boycott theory by testifying that Unilever has returned to spending on X after pausing on it and other social platforms in 2020 over concerns that the divisive election year would make them bad environments for ads. While the report and Republican committee members said evidence pointed to Unilever, GroupM and other GARM members steering money away from conservative news sites, Patel and Juhl said advertiser money is largely flowing away from news sites regardless of politics. “Currently about 80% of our U.S. advertising spend is directed in some form of digital media,” said Patel, who later pegged Unilever’s U.S. spending at $850 million, in his opening statement. “We spend the most on digital commerce platforms like Amazon, Walmart, Target and Walgreens, because that’s where consumers are making their buying decisions. Only 20% of Unilever’s advertising spending goes to social media platforms and less than 1% goes to digital news. We want to reach all our consumers who use our brands on platforms that support and align with our brands. Conversely, being associated with content, or a platform, that detracts from our brands, harms our brands, or is inconsistent with our brands is decidedly not in our economic interest.” Patel said the rise of user-generated content had meant brands such as Dove at times see their ads next to content “glorifying domestic violence and rape.” He added: “Unilever and Unilever alone controls our advertising spending. No platform has the right to our advertising dollars.” Juhl notes giving Musk forum GroupM uses GARM’s definition to provide clients “a consistent, reliable framework,” Juhl said in his statement, but “is not the arbiter of how to categorize websites, nor do we want to be, because we have no control over publishers and no role in moderating content.” In subsequent questioning, Juhl alluded to WPP CEO Mark Read having shared the stage with Musk (which happened at last year’s WPP Stream event and last month’s Cannes Lions) as an example of the company’s support for advertising on the platform. Also read: Inside Musk’s private Cannes meeting with advertisers Of sites on GroupM’s exclusion list, where it will only place ads at a client’s request, 94% are there “because they infringe on IP rights,” Juhl said. “We appreciate the importance of funding news organizations through advertising, which is why we have taken steps to make advertising on news, including local news, more appealing to advertisers,” Juhl said. “However, trust in news sites is at a low point and brands generally disfavor advertising next to news. For example, only 1.28% of brand spend is allocated to online news at this point. This is because brands prefer to avoid advertising alongside common news content—war, scandal, political division— and also because they do not need to advertise there to reach their target audience. Alternatives such as sports and entertainment provide a better way to reach the same consumers. This is not a left right or group and preference. It’s apolitical. It's an industry-wide preference.” Agency Review Tracker Stay up to date with the latest account reviews Click here GARM emails cited as collusion The House Judiciary report pointed to numerous emails from Rob Rakowitz, who heads GARM under the World Federation of Advertisers, as evidence he fomented collusion among advertisers to pull money from such platforms as X and Spotify, which came under hot water in 2022 when its “The Joe Rogan Experience” podcast was accused of spreading misinformation about the pandemic. In one email, Rakowitz noted a 2022 meeting of GARM’s Steer Team about Musk’s leadership of Twitter and noted Unilever has “issues with overtly partisan takes (e.g. Hunter Biden laptop expose.)” Unilever’s comments to Rakowitz “demonstrate the partisan nature of GARM and how far GARM has drifted from brand safety and content monetization,” according to the report. The report also referenced an email from Rakowitz which it characterized as him taking credit for Twitter’s revenue decline, which it cited as a reason for Unilever to “back channel” its issues with Musk through the GARM Steer Team to leverage the collective power of its advertiser members. “The threat Mr. Rakowitz can pose to an entire platform is enormous, evidenced by his taking credit for Twitter’s revenue decline,” the report said. The report also cited 2022 email exchanges involving Spotify’s continued support of “The Joe Rogan Experience” involving Joe Barone, managing director for brand safety in the Americas of GroupM. “We routinely conduct brand and safety reviews to ensure these partners of our are living up to our standards,” Juhl said. “And in the case of Spotify, we didn’t boycott anything. We didn’t pull our spending. They continue to be a major media partner for us. We wanted to understand what Joe Rogan was talking about during a health crisis in America and did it comply with Spotify’s standards of service.” Juhl also noted in questioning that Barone is no longer with GroupM. Barone did not respond to an email request for comment. Unilever’s Facebook ad issue Patel was called upon to explain an email exchange involving Rob Master, former VP of media and digital engagement, who left Unilever in 2022, Unlilever’s Executive VP of Global Media Luis DiComo and Facebook’s ad policy team, which ultimately made its way into GARM’s servers when forwarded to Rakowitz. It started with Master inquiring whether a Donald Trump campaign ad in October 2020, which alleged that Joe Biden refused a drug test and earpiece inspection prior to a debate, violated Facebook rules regarding misinformation. A follow-up email from Rakowitz to the Unilever executives deemed Facebook’s response for why it allowed the ad to run “honestly reprehensible.” Grilled by Rep. Matt Gaetz (R-Florida) about what Master and DiComo meant from their emails, Patel said: “I’m not sure what the intention of the communication was” but pointed out that the “honestly reprehensible” comment came from Rakowitz, not Master. In transcribed testimony cited by the report, Rakowitz described the comment as referring to seeming inconsistency in applying Facebook factchecking policies to political ads compared to other posts. GARM statement In a statement, GARM noted that the House Judiciary report and appendix did not include the full 168-page transcribed interview with Rakowitz “which effectively clarifies questions on GARM’s adherence to competition law policy and practices, that GARM is a voluntary organization, and that guidance from GARM is non-binding.” In producing documentation dating back five years and attending a full-day transcribed interview “GARM has continually demonstrated that it will cooperate with the House Judiciary Committee in good faith,” according to the statement. “GARM creates voluntary industry standards on brand safety and suitability which media sellers and ad tech companies can voluntarily adopt, adapt or reject.” Ad Age Leading Women Luncheon Join us Aug. 7 in New York as we recognize this year’s honorees Buy your ticket today

House grills Unilever and GroupM execs, alleging collusion against X, right-wing sites

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