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Home News Elon Musk’s X Sues Major Brands For Alleged Advertising Boycott

Elon Musk’s X Sues Major Brands For Alleged Advertising Boycott

by Celia

Elon Musk‘s social media platform, X, has expanded its lawsuit to include several major brands, accusing them of illegally boycotting the platform in 2022 following Musk’s acquisition. The suit, filed last year in a federal court in Texas, initially targeted the World Federation of Advertisers and companies such as CVS and the video-streaming platform Twitch.

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On Saturday, Musk’s legal team filed an amended complaint, adding new defendants, including Lego, Nestlé, Tyson Foods, Abbott Laboratories, Colgate-Palmolive, Pinterest, and Shell International.

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The complaint alleges that the World Federation of Advertisers was concerned that X, formerly known as Twitter, would deviate from its brand safety initiative, the Global Alliance for Responsible Media (GARM). As a result, the group allegedly orchestrated a large-scale pause in advertising on the platform.

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According to the suit, at least 18 advertisers that were part of GARM stopped buying ads on Twitter either in the U.S. or globally in the weeks after Musk’s acquisition in November 2022. Other GARM members “substantially reduced” their ad spending on the platform.

X claims that the boycott deprived it of billions of dollars in advertising revenue, with the effects still being felt years later. Lawyers for X argued that in a competitive market, social media platforms should have the option to set their own brand safety standards that are “optimal for that platform.”

“Collective action among competing advertisers to dictate brand safety standards to social media platforms undermines the competitive process and allows a group of advertisers with market power to override consumer interests,” the complaint stated.

The companies added to the lawsuit on Saturday did not immediately respond to requests for comment from NPR.

Since Musk took over, Twitter has reportedly lost 50 of its top 100 advertisers. Musk has significantly changed the platform’s policies, including reinstating accounts previously banned for violating rules and removing contract content moderators, the company’s human rights team, and investigators tasked with curbing political manipulation and child sexual abuse material.

Last year, following the lawsuit, the World Federation of Advertisers discontinued GARM operations, citing “recent allegations that unfortunately misconstrue its purpose and activities” and explaining that these allegations had caused a distraction and significantly drained its resources and finances.

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