In a bold move, Elon Musk's social media platform X has taken legal action against a coalition of advertisers, alleging that a coordinated boycott has cost the company billions in revenue and breached antitrust laws. The lawsuit, filed on Tuesday in a Texas federal court, targets the World Federation of Advertisers (WFA) and major brands like Unilever, Mars, CVS Health, and Orsted.
The core of the lawsuit centers on the Global Alliance for Responsible Media (GARM), an initiative under the WFA. Musk's X claims that GARM orchestrated a significant pause in advertising after Musk acquired Twitter for $44 billion in late 2022 and implemented extensive changes to its policies and staff.
Musk, who has been vocal about his frustrations, declared "now it is war" on X, asserting that the company’s leniency over the past two years has been met with "nothing but empty words." This sentiment was echoed by X CEO Linda Yaccarino, who, in a video statement, pointed to evidence from the U.S. House Judiciary Committee indicating that a group of companies had engaged in an illegal boycott against X.
The Republican-led committee recently examined whether existing laws effectively deter anticompetitive collusion in online advertising. The findings support X's claims that the advertisers' actions were systematic and deliberate, significantly impacting the platform’s revenue during Musk's early days as owner.
This lawsuit comes amid ongoing tensions between X and its advertisers. A year after Musk's acquisition, many advertisers abandoned the platform over concerns that their ads were appearing alongside pro-Nazi content and hate speech. Musk’s own controversial posts, including those endorsing antisemitic conspiracy theories, further fueled the exodus. In response, Musk accused the departing advertisers of "blackmail" and made it clear they were no longer welcome.
X's legal action against these advertisers marks a significant escalation in the ongoing conflict, highlighting the turbulent relationship between the platform and its commercial partners since Musk's takeover. This case could set a precedent for how social media companies and advertisers navigate their complex and often contentious relationships in the future.
