X and GARM fallout—inside advertising’s growing antitrust worries

The X antitrust lawsuit that led the World Federation of Advertisers to shut down the Global Alliance for Responsible Media earlier this month may just be the beginning of antitrust battles facing other ad industry and trade organizations. There are other contentious, standard-setting issues that have been dealt with through collective action in recent years, including the Association of National Advertisers’ Cross-Media Measurement initiative, efforts by multiple trade groups to rein in spending on so-called “made for advertising” websites, and ongoing vetting of measurement companies by the Media Rating Council that may not enjoy ironclad exemption from antitrust litigation. At this point, there’s no indication that anyone is contemplating litigation against any of these trade groups or member marketers, but the GARM and X experience shows that it only takes one or two outliers to launch lawsuits that can bring down an industry organization or initiative. The WFA earlier this month shut down GARM and removed its website and all vestiges of its brand safety standards from the internet. Check out the latest Ad Age events and award programs More potential antitrust issues Beyond GARM, the ad world is full of organizations setting standards, evaluating companies and taking other collective action in ways that not everyone is happy about. That’s all taking place in an environment where antitrust scrutiny was rising even before the House Judiciary Committee and X got involved. Google is the target of two active Justice Department antitrust lawsuits, one of which the feds recently won and another of which goes to trial next month. The ongoing Justice Department action against the tech giant over search and its role in ad tech may be the bigger concern, said one ad tech executive and lawyer who said he’s been in touch with Justice Department attorneys and knows areas they’re looking at. Among potential areas of inquiry, the executive said, are the competitive effect of exclusive deals Google has with agency holding companies and Google’s influence on measurement standards. Also read: How Musk took down GARM Two people familiar with the matter confirmed that Justice Department lawyers have been showing interest in media measurement issues involving Google. It’s not clear whether that’s limited to discovery in the existing ad tech case or a possible third inquiry, or for use as leverage in settlement negotiations. The Justice Department declined to comment. Google did not respond to a request for comment by deadline. Also read: A guide to Google’s ad tech trial Industry groups, marketers and agencies also face an industry that’s just become increasingly litigious, with some companies clearly willing to go to court as a cudgel to try to improve their revenues. Besides, X, Matt Prohaska, principal of Prohaska Consulting, pointed to Byron Allen’s lawsuits against McDonald’s alleging racial discrimination and the media mogul’s threats to sue more advertisers. (A judge dismissed one of those lawsuits in February while another is ongoing as part of a years-long battle.) Historically, brand safety controls and verification have been driven some by fear of reputational risk, Prohaska said. “Now there’s another fear-mongering that is planted in the back of minds of too many advertisers and trade bodies,” he said, “that if you try to draw a line in the sand of what’s right and appropriate and best practices and the right way to conduct business, and people fall under that, they're going to feel that they’ve been wronged and left out of the club.” GARM’s ripple effects Besides GARM, the X lawsuit targeted advertisers Unilever, Mars, CVS Health and Orsted. A simultaneous lawsuit filed in the same North Texas federal court by creator platform Rumble targets the WFA and WPP’s Group M. Both suits were fueled by a trove of evidence, particularly emails, unearthed by House Judiciary Committee’s subpoenas and a report by the committee alleging GARM, advertisers and agencies engaged in collusion that amounted to antitrust violations. News Corp. CEO Robert Thomson said during an earnings call on Aug. 8 that his company is also “considering its legal options” in litigating over GARM’s effect on spending on Fox properties. Though much of the testimony before the committee disputed the antitrust theory, the X lawsuit is backed by a deep-pocketed, historically litigious plaintiff in Elon Musk and a House Judiciary Committee Chairman in Jim Jordan, who’s a lawyer and whose views may reflect those of many Republican judges. The near-in ripple effects of GARM getting thrown overboard by the WFA include a void in how brand safety is defined and monitored in the industry. At least four measurement firms—DoubleVerify, GumGum, Integral Ad Science and Zefr—have ad products built around applying various levels of GARM brand safety controls. While some (GumGum and Zefr) have issued statements lamenting the shutdown of GARM and reiterating their commitment to brand safety products, none has yet commented on how the shutdown will affect those products. How the industry will officially define brand safety risks now remains to be seen. GARM has provided a standard industry reference on brand safety since 2019. “That’s gone,” said MRC CEO George Ivie. “GARM is disbanded.” Ivie said he’s corresponded with the 4A’s about what standards should apply going forward, but it’s not settled yet. Advertisers, of course, can still apply their own brand safety standards to their media buys, and verification vendors have products aimed at customized controls. Indeed, GARM standards were set to allow low, medium and high risk depending on user input. Beyond that, Ivie noted the House Judiciary Committee hearings on GARM, and the substantial email record accumulated through the committee’s subpoena, with those emails selectively disclosed through a House report and the hearings. In the aftermath, Ivie said, he told MRC staff in a daily virtual meeting, “We need to be careful what gets documented in email coming out of that hearing. We have to be vigilant. Did that take legal counsel? Not really. We know what’s right and wrong, but you tend to get very casual sometimes in email.” While other industry organizations declined to get into how the raised temperature on antitrust has affected them, it’s almost surely going to lead to more caution across the board, and less marketer and agency participation, said Lou Paskalis, chief strategy officer of news industry advocacy group Ad Fontes Media and a longtime participant with industry organizations. “What was believed to be collaboration is now being labeled collusion,” Paskalis said, noting that it’s going to make it even harder to get cautious marketers involved in initiatives and harder still to get them to speak freely. Organization counsel generally attend group board meetings and tamp down discussions that could be deemed to have antitrust implications, Paskalis said. But much of the work gets done in more informal meetings outside business hours, he said, with no lawyers looking over anyone’s shoulders, not to mention in emails and other private communications. MRC’s antitrust standing Ivie’s concern about emails is one sign that the industry needs to think more about antitrust even when there’s no lawyer around. One widespread assumption in the media industry was that the MRC was created at the behest of Congress, and as a result, enjoys protection from antitrust laws. The reality is more complicated. There was a report issued by the Harris Committee of the House in 1966, in the wake of scandals about questionable broadcast audience measurement, recommending the formation of the MRC’s precursor the Broadcast Rating Council and the use of certified public accountants to audit ratings, as an alternative to federal regulation. That, however, stops short of a statute that overrides antitrust law. That was clear when the MRC sought a Justice Department opinion in 2006 regarding a change in its process for evaluating currency measurement. A Justice Department opinion in 2008 said the MRC was on solid footing, but limited its scope to the MRC’s process for encouraging, but not requiring, pre-commercialization audits of a new currency measurement. “The department reserves the right to bring an enforcement action in the future if the actual operation of the proposed conduct proves to be anticompetitive in purpose or effect,” the letter ended. At least some critics of the MRC privately see the group’s effect as anticompetitive. While MRC accreditation is not required for a measurement company to do business, it’s strongly encouraged by many marketers and agencies. And it’s seen by some critics as easier for bigger, more established companies to get accredited than smaller and newer ones. MRC audits can cost hundreds of thousands of dollars, or even millions over time, in outlays that are negligible to big players such as Nielsen or Google, said one industry executive. Another described the MRC process as an exercise in “exhaustion” for smaller applicants. Bigger companies have more staff to devote to answering questions and educating auditors who are CPAs, not ad tech engineers or media executives, these critics say. Media measurement blog Tracking TV, social and digital updates Click here Some point to the seemingly harder and longer time rivals such as Comscore, VideoAmp and iSpot.tv have had in starting or completing audits compared to Nielsen or Google. Ivie noted that the MRC suspended Nielsen’s national panel TV ratings for nearly two years and that most of its other accreditations have remained suspended. And he said some automated processes, such as Google’s, are easier to audit more quickly than others, such as those that involve use of consumer panels and more human intervention. “People can always sue you,” Ivie said. “But I think the process and the controls and our heritage leads us to be relatively safe. That’s what our legal counsel tells us.” ANA and antitrust Another area of conflict that could boil over into antitrust issues is the ANA’s Cross-Media Measurement initiative, moving forward as a company called Aquila. The Video Advertising Bureau, pulled out of the CMM initiative and talks to help fund it last year out of concern that digital platforms, which are currently the only media companies involved with Aquila, were exerting undue influence over its direction and creating a measurement system that ultimately will steer more money into their pockets and away from TV networks. VAB CEO Sean Cunningham and the ANA declined to comment. According to people familiar with the matter, the concerns of TV networks over about the virtual ID system and measurement framework being developed by the ANA date to the beginnings of the initiative more than three years ago. The CMM project was shaped at its inception by a team of 100 engineers from Google who worked on the project, these people say, with TV networks only approached to participate nearly a year after work began. Notably, an initiative labeled “Cross Media” has had no apparent involvement from radio, audio, out-of-home or print media executives. Executives involved in the effort have cited its potential for driving billions of dollars of wasted frequency out of the media market, leaving media company executives who are on the outside looking in fearing that they will be the target of the cuts. Perhaps ironically, one of the most outspoken people opposing Google’s formative role in the ANA measurement project, arguing with ANA CEO Bob Liodice that it constituted illegal collusion, was X CEO Linda Yaccarino, then chairman of global advertising at NBCUniversal, according to a person familiar with the matter. Another person familiar with the matter said Yaccarino has consistently been concerned about Google's influence on industry measurement issues. An X spokesman declined to comment. MFAs and antitrust TV networks aren’t the only media companies potentially aggrieved by what the ANA has been doing. Through its programmatic supply chain transparency report last year, the ANA cast a harsh light on so-called “made for advertising” websites. The ANA joined the 4A’s and IAB in helping define MFAs last year too, to help advertisers avoid them if they want, though there’s been debate on just in how successful that effort has been. Subsequently, advertisers appear to have cut back on their amount of spending on the sites, which feature high volumes of paid traffic, heavy ad loads and frequent ad refreshes, according to follow-up research released by the ANA presented at this year’s Cannes Lions International Festival of Creativity. A report in April by Jounce Media likewise indicated that spending on MFA sites appears to have declined since the ANA issued its report last summer. A concerted effort that could appear aimed at steering money away from a group of website operators has made at least some legal counsel to industry organizations uncomfortable, according to people familiar with the matter, though there’s no indication that any affected websites are contemplating antitrust action. The 4A’s and IAB didn’t respond to Ad Age requests for comment. In an e-mail, ANA Group Executive VP Bill Duggan said its 2023 report was primarily aimed at showing many advertisers had no idea of how much MFA activity was in their programmatic investments and encouraging them to get the information. “In no place in the report do we make the statement that advertisers should eliminate spending on MFA sites,” Duggan said. “That’s not our business.” What could become an increasingly important question for the ANA and other industry bodies is when, if ever, collective recommendations on best practices cross the line into collusion. Contributing: Garett Sloane

X and GARM fallout—inside advertising’s growing antitrust worries

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