Elon Musk’s X Sues Advertisers Accused of an ‘Illegal’ Boycott: ‘Now It Is War’ (2024)

Elon Musk once told advertisers — including Disney — who pulled their ad dollars from X, the social network formerly known as Twitter, to “Go fuck yourself.” Now Musk’s X has filed an antitrust lawsuit against a trade group and several advertisers, alleging they conspired to withhold “billions” of dollars in ad spending over concerns that X would “deviate from certain brand safety standards for advertising.”

X’s attorneys filed the lawsuit Tuesday in the U.S. District Court for the Northern District of Texas. A copy of the lawsuit is available at this link (via the New York Times).

“We tried peace for 2 years, now it is war,” Musk posted on X about the lawsuit.

Popular on Variety

Related Stories

Alexander Payne to Receive Honorary Heart of Sarajevo Award at 30th Sarajevo Film Festival

Musk quoted a post by X CEO Linda Yaccarino, titled “An open letter to advertisers,” which said in part, “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.”

What’s the point? The legal action certainly will do nothing to persuade advertisers who aren’t buying ads on X to suddenly decide to do so. X’s lawsuit seeks unspecified monetary damages and “injunctive relief under the antitrust laws of the United States.” According to the lawsuit, an initiative from industry trade group World Federation of Advertisers called the Global Alliance for Responsible Media (GARM) represented a conspiracy — joined by dozens of advertisers — to “collectively withhold billions of dollars in advertising revenue” from X. U.S. advertising revenue on X in 2023 plummeted 52%, to $1.13 billion, according to estimates from market researcher eMarketer, which forecast the company’s 2024 ad sales to decline slightly to $1.10 billion

The lawsuit comes a little over a month after X announced that the company had “reinstated our relationship with the @wfamarketers Global Alliance for Responsible Media. As of today, X is included as a member of #GARM… X is committed to the safety of our global town square and proud to be part of the GARM community!”

According to X’s suit, “As a condition of GARM membership, GARM’s members agree to adopt, implement and enforce GARM’s brand safety standards, including by withholding advertising from social media platforms deemed by GARM to be non-compliant with the brand safety standards.”

On its website, the World Federation of Advertisers says, “The GARM framework is broad and apolitical and allows individual members to determine which content is suitable for their own advertising support. GARM does not look at harmful content or content risk through a political lens, nor does it advocate doing so. Suggestions that GARM practices may impinge on free speech are a deliberate misrepresentation of GARM’s work. GARM is not a watchdog or lobby. GARM does not participate in or advocate for boycotts of any kind.” The trade group says it established GARM in 2019 “to help the industry address the challenge of illegal or harmful content on digital media platforms and its monetization via advertising.”

The lawsuit alleged that major brand advertisers — including Unilever, Mars Inc., CVS Health and renewable energy company Ørsted, which are named as defendants — agreed to abide by GARM’s standards to “abruptly and in lockstep, boycott Twitter by discontinuing entirely or substantially reducing their previously substantial advertising purchases from Twitter.”

A spokesman for the WFA declined to comment. Reps for Unilever, Mars Inc., CVS Health and Ørsted did not immediately respond to requests for comment.

X’s lawsuit alleged that the advertisers’ “boycott” violated Section 1 the U.S.’s Sherman Act antitrust law, which broadly prohibits agreements among distinct actors that unreasonably restrain trade, “by withholding purchases of digital advertising from Twitter.”

“The conduct of Defendants and their co-conspirators alleged herein is per se illegal, or, in the alternative, illegal under the Rule of Reason or ‘quick look’ analytical framework,” the X lawsuit said. “There are no procompetitive effects of the group boycott, which was not reasonably related to, or reasonably necessary for, any procompetitive objectives of the GARM Brand Safety Standards.”

The “unlawful conduct” alleged by X is the subject of “an active investigation” by the House of Representatives’ Committee on the Judiciary, the lawsuit said. The committee’s interim report issued on July 10 concluded that, “The extent to which GARM has organized its trade association and coordinates actions that rob consumers of choices is likely illegal under the antitrust laws and threatens fundamental American freedoms. The information uncovered to date of WFA and GARM’s collusive conduct to demonetize disfavored content is alarming.”

Last November,X and Musk sued Media Matters, alleging the liberal watchdog group “knowingly and maliciously manufactured” research depicting neo-Nazi and white-nationalist posts on X next to ads for Apple, Bravo, IBM, Oracle and Comcast’s Xfinity. Following the Media Matters report and Musk’s endorsement of an anti-Semitic conspiracy theory, severallarge advertisers said they were halting their spending on X— either because of the Media Matters reports, Musk’s post or a combination of both.

Elon Musk’s X Sues Advertisers Accused of an ‘Illegal’ Boycott: ‘Now It Is War’ (2024)

FAQs

Elon Musk’s X Sues Advertisers Accused of an ‘Illegal’ Boycott: ‘Now It Is War’? ›

Musk's X accuses advertisers of boycotting platform in new lawsuit. Aug 6 (Reuters) - 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 conspiring to boycott the site and causing it to lose revenue.

Why are advertisers boycotting X? ›

Advertisers initially started boycotting X due to concerns about brand safety and offensive content. Then, Musk's free speech agenda clashed with brands' desire to distance themselves from problematic content.

Who is suing X? ›

Twitter's former chairman, Omid Kordestani, has sued the social media company — now called X — claiming that CEO Elon Musk is refusing to cash out his more than $20m in shares. Kordestani worked in the position of executive chairman between 2015 and 2020.

Why did Disney boycott X? ›

Iger said that Musk's stance in agreeing with an anti-Semitic post meant that Disney's association with X wasn't a positive one for the company.

What is X going to be? ›

Musk has said he wants "X" to become a super-app along the lines of China's WeChat. The Chinese app is much bigger than X and weaves together messaging, voice and video calling, social media, mobile payment, games, news, online booking and other services.

Who owns X Com now? ›

Domain name

In July 2017, PayPal sold the domain x.com back to Elon Musk. Starting in 2023, x.com began being used by Twitter which was acquired by Musk in 2022 and subsequently rebranded to X.

What is Elon Musk X? ›

In 2022, he acquired Twitter for $44 billion, merged the company into newly created X Corp. and rebranded the service as X the following year. In March 2023, Musk founded xAI, an artificial intelligence company.

Who is the X Factor judges? ›

Airing in December 2019, the show was a replacement for the preciously announced The X Factor: All Stars, and featured solo artists auditioning for a place in a boy band and a girl band. Dermot O'Leary once again hosted the show, with Leona Lewis joining both Simon Cowell and Nicole Scherzinger on the judging panel.

Why is X being boycotted? ›

Supposedly, companies are boycotting X out of concern that their brands could be tarnished by association with antisemitic content that some users have posted on that application.

Who's boycotting X? ›

Elon Musk owned X, formerly known as Twitter, has filed a lawsuit against a global advertising alliance and several major companies, including Mars and CVS Health. The microblogging platform accuses them of unlawfully conspiring to boycott the site and causing it to lose revenue.

Why don t Millennials respond to ads? ›

But millennials don't want to be talked at. They are used to having control over the information at their fingertips in their day to day lives, and their interactions with brands online is no different. They want to control their messaging. They also are easily incentivized.

What is X ads? ›

What are X Ads? You may see different kinds of ads on X, including Promoted Ads, Follower Ads, and Trend Takeover. We may show these ads to you when you are logged in or logged out of X. They are clearly marked with an “Ad” label. You can interact with most promoted content in much the same way as organic content.

References

Top Articles
Latest Posts
Recommended Articles
Article information

Author: Fredrick Kertzmann

Last Updated:

Views: 6477

Rating: 4.6 / 5 (66 voted)

Reviews: 81% of readers found this page helpful

Author information

Name: Fredrick Kertzmann

Birthday: 2000-04-29

Address: Apt. 203 613 Huels Gateway, Ralphtown, LA 40204

Phone: +2135150832870

Job: Regional Design Producer

Hobby: Nordic skating, Lacemaking, Mountain biking, Rowing, Gardening, Water sports, role-playing games

Introduction: My name is Fredrick Kertzmann, I am a gleaming, encouraging, inexpensive, thankful, tender, quaint, precious person who loves writing and wants to share my knowledge and understanding with you.