Tech giant X, formerly known as Twitter, has filed a lawsuit in Texas against the World Federation of Advertisers and several member companies for allegedly conspiring to boycott the social network. The lawsuit alleges that this boycott caused X to lose “billions of dollars” in revenue.
According to Musk, the CEO of X, the company had tried to maintain peace for two years, but now it is time for war. This legal action comes after X’s advertising revenue plummeted when Musk bought and renamed the platform for $44 billion in 2022. Shortly after taking over, Musk laid off thousands of employees, including many moderation staff responsible for removing harmful content.
In addition to the boycott, companies stopped advertising on X in November 2023 due to concerns that their ads were appearing next to pro-Nazi content. Musk himself has also faced criticism for spreading hate speech on the platform, including endorsing an antisemitic conspiracy theory. In response to the boycott, Musk told advertisers to “go f*** yourself.”
X’s handling of harmful content has been under scrutiny, most recently during the riots in England where misinformation was spread on the platform. The lawsuit alleges that the companies, through a World Federation of Advertisers initiative called Global Alliance for Responsible Media (GARM), colluded in a way that violated US anti-trust laws.
X is seeking unspecified damages and a court order to stop any further attempts to conspire and withhold advertising spending. The company claims to have implemented brand-safety standards that are on par with its competitors and meet or exceed those set by GARM.
Chief Executive of X, Linda Yaccarino, stated that when the marketplace of ideas is restricted, people are hurt. She added that no small group of people should have a monopoly on what is monetized.
However, according to Professor Christine Bartholomew from Buffalo University, an expert in anti-trust laws, X will have to prove that there was an agreement to boycott joined by each advertiser, which she describes as “no small hurdle.” She also notes that even if the lawsuit is successful, Musk cannot legally force companies to advertise on X.
The accused companies, including British multinational Unilever, food giant Mars, CVS Health, and Danish renewable energy company Orsted, have yet to comment on the lawsuit. However, at a hearing in Congress last month, Unilever’s president Herrish Patel stated that the company only advertises on platforms that do not harm their brand. He added, “Unilever, and Unilever alone, controls our advertising spending. No platform has a right to our advertising dollar.”
