Elon Musk’s social media platform X recently filed a lawsuit against a global advertising alliance and several major companies for allegedly conspiring to boycott the site, causing it to lose revenue. The lawsuit, filed in federal court in Texas, named the World Federation of Advertisers, Unilever, Danish renewable energy company Orsted, Mars, and CVS Health as defendants. The lawsuit claims that advertisers collectively withheld “billions of dollars in advertising revenue” from X, previously known as Twitter, which violated US antitrust law.
The World Federation of Advertisers, Unilever, Mars, and CVS Health have not immediately responded to the lawsuit. Orsted declined to comment. The lawsuit has accused the advertisers of acting against their economic self-interests in a conspiracy against the platform.
After Elon Musk acquired X in 2022, the platform experienced a slump in ad revenue for several months. Advertisers were hesitant to spend on X under Musk’s ownership due to concerns about their brands appearing alongside harmful content that may not have been removed under prior ownership.
According to antitrust expert Christine Bartholomew, proving an unlawful boycott conspiracy can be challenging. X will have to demonstrate an actual agreement to boycott joined by each advertiser, which can be difficult if the agreement was implicit. Even if X’s case succeeds, the platform cannot force companies to spend ad revenue on the site.
X stated in the lawsuit that it applies brand-safety standards comparable to its competitors and exceeds measures outlined by the Global Alliance for Responsible Media. However, the platform claims to have become a “less effective competitor” in the digital advertising market, seeking unspecified damages and a court order against any ongoing efforts to conspire against its ad revenue.
In addition to X’s lawsuit, video-sharing company Rumble also filed a separate antitrust lawsuit against the World Federation of Advertisers. The legal actions highlight the growing tensions between tech companies and advertisers over content moderation and brand safety standards.
Elon Musk’s X is taking legal action against major advertisers and an advertising alliance for allegedly conspiring to boycott the platform, resulting in a loss of revenue. The lawsuit underscores the challenges faced by tech companies in balancing free speech with brand safety concerns. The outcome of the legal battle will likely have far-reaching implications for the digital advertising industry and the regulation of online platforms.
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