Musk’s X accuses advertisers of boycotting platform in new lawsuit

Aug 6 – Elon Musk’s social media platform X on Tuesday sued a global advertising alliance and several major companies, including Mars and CVS Health, accusing them of unlawfully colluding to boycott the site and cause it to lose revenue.

X filed the lawsuit in federal court in Texas against the World Federation of Advertisers, Unilever and Danish renewable energy company Orsted, as well as Mars and CVS Health.

The lawsuit claims that advertisers, acting through an initiative of the World Federation of Advertisers called the Global Alliance for Responsible Media, have collectively withheld “billions of dollars in advertising revenue” from X, formerly known as Twitter.

It claims they acted against their own economic interests by conspiring against the platform, in violation of U.S. antitrust law.

The World Federation of Advertisers, Unilever, Mars, CVS Health and Ørsted did not immediately respond to requests for comment.

In a statement Tuesday about the lawsuit, X Chief Executive Linda Yaccarino said, “People get hurt when the marketplace of ideas is limited. No small group of people should monopolize what gets monetized.”

Ad revenue at X has been declining for months after Musk bought the company in 2022. Some advertisers have been wary of spending ads under Musk amid questions and concerns about their brands appearing next to harmful content that may have been removed under previous owners.

The advertising group launched its Responsible Media Initiative in 2019 to “help the industry address the challenge of illegal or harmful content on digital media platforms and its monetization through advertising.”

Christine Bartholomew, an antitrust expert and professor at the University at Buffalo Law School, told Reuters that lawsuits alleging unlawful boycotts can carry significant challenges.

X must show that there was an actual agreement to boycott by each advertiser, Bartholomew said. “Proving that requirement is no small feat” in cases where an agreement can be implied, she said.

Even if the case is successful, X cannot force companies to spend advertising money on the platform, Bartholomew said.

The case was filed in the Northern District of Texas and assigned to U.S. District Judge Reed O’Connor. The district has become a favorite venue for conservatives who sue to block Biden administration policies.

In its lawsuit, Company X said it has applied brand safety standards that are comparable to those used by its competitors and that “meet or exceed” measures set forth by the Global Alliance for Responsible Media.

The lawsuit says X has become a “less effective competitor” in digital advertising sales.

X is seeking unspecified damages and an injunction prohibiting any further attempts to collude to withhold advertising funds.

Video-sharing company Rumble filed a separate antitrust lawsuit Tuesday against the World Federation of Advertisers.

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