GARM (The Global Alliance for Responsible Media) will dissolve after Mr. Musk accused the group of orchestrating a boycott.

After being sued this week by Elon Musk’s social media company X, a prominent advertising industry group announced that it would shut down, according to an email dispatched to its members. GARM, a nonprofit coalition of top advertisers led by the World Federation of Advertisers, told its members two days after Mr. Elon Musk accused the group of orchestrating a boycott against X that it would stop operations. The lawsuit stated that the advertising group, known as GARM, had broken antitrust laws by coordinating with brands to deter them from spending money on X.

While the World Federation of Advertisers promptly denied that GARM’s work in any way was in contravention of the law, it said that the nonprofit lacked the financial resources to continue operating while it fights X in court. Stephan Loerke (CEO of the World Federation of Advertisers) told members via an email that, while he was “confident that the outcome will demonstrate our full adherence to competition rules in all our activities,” GARM would stop its operations with immediate effect. The World Federation of Advertisers, which is also named in the suit, will stay operational. “This decision was not made lightly, but GARM is a not-for-profit organization, and its resources are limited,” Mr. Loerke stated.

At X, the news that GARM would close down was celebrated. “No small group should be able to monopolize what gets monetized,” Linda Yaccarino, X’s CEO, said in a post. “This is an important acknowledgment and a necessary step in the right direction. I am hopeful that it means ecosystem-wide reform is coming.”

GARM’s decision to down shutters was also praised by the House Judiciary Committee, headed by Representative Jim Jordan, Republican of Ohio. In July, the committee published a report that said GARM had attempted to influence online discourse by “starving disfavored content, or even entire platforms, of advertising dollars needed to survive.” “This is a big win for the First Amendment, and a big win for Chairman Jordan’s oversight work,” said Russell Dye (a spokesman for the committee).

The dispute stemmed from Mr. Musk’s $44 billion aggressive acquisition of X (then known as Twitter) in 2022. Mr. Musk promised a new age of unrestricted speech and withdrew many of the platform’s rules against misinformation and hateful content. In reaction, many brands pulled their ads from X, worrying that they would damage their brands by appearing together with unsavory posts.