Musk’s X sues advertisers over alleged ‘illegal boycott’

Remember when Elon Musk told advertisers fleeing Twitter to "go f*** yourself"? Now, his rebranded platform, X, has filed an antitrust lawsuit alleging a conspiracy among major advertisers and a global advertising alliance to cripple the company through an "illegal boycott". 

The lawsuit, filed in a Texas federal court, specifically names the World Federation of Advertisers (WFA), Unilever, Mars Inc, CVS Health, and Orsted, and alleges that the trade group and several advertisers conspired to withhold “billions of dollars" in ad spend over concerns that X would “deviate from certain brand safety standards for advertising". 

X claims these entities acted in concert through the WFA's Global Alliance for Responsible Media (GARM) and cost the platform billions in lost ad revenue by collectively withholding their spending.

Musk tweeted: "We tried being nice for 2 years and got nothing but empty words. Now, it is war."

He 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 organisations and their executives cost X billions of dollars. No small group of people should monopolise what gets monetised."

In November 2023, concerns about ads appearing next to pro-Nazi content and hate speech led to a wave of advertisers—includng Disney, Apple and IBM—abandoning X.  

At the time, X said it does not intentionally place brands next to "this kind of content". However,  Musk's controversial endorsement of an antisemitic conspiracy theory further fuelled the issue.

X's legal action comes after a prolonged period of tension with the advertising industry. Ad revenue plummeted following Musk's takeover, fuelled by advertiser anxieties over the platform's content moderation policies.

The current lawsuit (a copy is availabe at this link) points to a July 2023 report by the House Judiciary Committee, which investigated GARM's practices and concluded that their actions "rob consumers of choices" and potentially violate antitrust laws. X now seeks unspecified monetary damages and injunctive relief. 

In addition, video-sharing company Rumble, often favoured by right-wing influencers, has made similar claims in a separate lawsuit against WFA on Tuesday.