Remember when Elon Musk told advertisers fleeing Twitter to “go f*** yourself”? Now, his rebranded platform, X, has filed an antitrust lawsuit alleging a conspiracy among major advertisers and a global advertising alliance to cripple the company through an “illegal boycott.”.
A Texas federal court lawsuit was filed naming the World Federation of Advertisers (WFA), Unilever, Mars Inc., CVS Health, and Orsted, alleging that the trade group and some advertisers conspired to withhold “billions of dollars” in ad spend over concerns that X would “deviate from certain brand safety standards for advertising.”.
X says these entities plotted through the WFA’s Global Alliance for Responsible Media and collectively withheld their spending at a cost of billions lost in ad revenue. Musk tweeted, “We tried being nice for 2 years. Now, it is war.” He quoted a post by X CEO Linda Yaccarino, in which she titled ‘An open letter to advertisers.’ “To put it simply, people are hurt when the marketplace of ideas is undermined, and some viewpoints are not funded over others as part of an illegal boycott… The illegal behavior of these organizations and their executives cost X billions of dollars.”.
No small group of people should monopolize what gets monetized. In November 2023, the prospect of ads appearing alongside pro-Nazi content and hate speech drove a wave of advertisers–Disney, Apple, and IBM among them–away from X. Then X said it does not knowingly place brands next to “this kind of content.” The controversy over Musk’s endorsement of an antisemitic conspiracy theory only fueled it. The legal action comes after protracted tension with the advertising industry, which saw ad revenue plummet following Musk’s takeover and fueled by advertiser anxieties about the content moderation policies of the platform.
The suit refers to a July 2023 report by the House Judiciary Committee, which investigated GARM’s activities and found that its moves “strip consumers of choice” and may run afoul of antitrust regulations. X seeks unspecified damages and equitable relief. The same-day separate suit against WFA also mirrors X’s, making a similar case. The right-wing influencer-friendly video-sharing service Rumble complained Tuesday in its own action against WFA.
Tuesday: Elon Musk’s X said Tuesday that it is suing an advertising group and a number of leading companies, charging them with billions of dollars in damages for “illegally” boycotting the social media company.
“We tried peace for 2 years; now it is war,” the billionaire founder of Tesla and SpaceX said in a post on X, which he acquired late in 2022.
The antitrust suit filed specifically against the World Federation of Advertisers (WFA) and Unilever, Mars, CVS Health, and Orsted—a Danish energy company—before a federal court in Texas points to an alleged conspiracy. WFA, through a program called the Global Alliance for Responsible Media, or GARM, is accused alongside these companies and several others of “collectively withholding billions of dollars in advertising revenue” from X, formerly Twitter.
Several advertisers pulled out of Twitter after the takeover by Musk amid fears about the level of content moderation under the new ownership and his own controversial musings on the site.
X CEO Linda Yaccarino, on the platform on Tuesday, said: “X was the victim of a systematic illegal boycott. They conspired to boycott X, which threatens our ability to thrive in the future, Yaccarino added. “No small group of people should be able to monopolize what gets monetized.”
X sued for a jury trial with undisclosed damages.
According to The New York Times, citing internal company documents, X earned $114 million in revenue in the United States in the second quarter of this year, down 25 percent from the first quarter and down 53 percent from the same period last year.
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