Elon Musk’s X, formerly known as Twitter, has initiated legal action against several companies after they ceased advertising on the social network. The tech giant alleges that these firms unlawfully conspired to boycott the platform, causing it to lose “billions of dollars” in revenue.
The lawsuit, filed in Texas, names the World Federation of Advertisers (WFA) and its member companies: British multinational Unilever, food giant Mars, CVS Health, and Danish renewable energy company Orsted. Musk declared on X, “We tried peace for two years, now it is war.”
This legal move follows a significant decline in advertising revenue at X since Musk acquired and rebranded the social network for $44 billion (£35 billion) in 2022. Shortly after taking over, Musk made substantial layoffs, including many moderation staff responsible for removing harmful content.
Concerns about brand safety escalated in November 2023 when companies halted advertising on the platform due to their content appearing next to pro-Nazi posts. Additionally, Musk was accused of spreading hate speech. Although Musk later apologized for endorsing an antisemitic conspiracy theory, he also controversially told advertisers to “go f*** yourself.”
Musk’s management of the platform has faced increasing scrutiny, especially over its handling of misinformation during the recent riots in England.
The lawsuit claims that the advertisers, through the WFA’s Global Alliance for Responsible Media (GARM) initiative, colluded in a manner that violated US anti-trust laws. GARM, launched in 2019, aims to address the challenge of illegal or harmful content on digital media platforms and its monetization via advertising.
X seeks unspecified damages and a court order to prevent further efforts to withhold advertising spending. The company asserts that it has implemented brand-safety standards comparable to its competitors and that meet or exceed GARM’s specifications.
Linda Yaccarino, X’s chief executive, stated, “People are hurt when the marketplace of ideas is constricted. No small group of people should monopolize what gets monetized.”
Professor Christine Bartholomew, an anti-trust expert from Buffalo University, noted that X would need to prove that each advertiser agreed to the boycott, a significant challenge. She added that even if the case succeeds, Musk cannot legally force companies to advertise on X.
The companies accused by X have yet to comment on the lawsuit. However, Unilever, which owns brands such as Dove, Persil, and Wall’s, recently told Congress that it only advertises on platforms that do not harm its brand. Unilever’s president, Herrish Patel, emphasized, “Unilever, and Unilever alone, controls our advertising spending. No platform has a right to our advertising dollar.”
As the legal battle unfolds, the outcome could have far-reaching implications for advertising practices and the dynamics between tech platforms and their advertisers.
