NAIROBI, Kenya- Elon Musk’s social media platform, X (formerly known as Twitter), has launched a lawsuit against several major corporations.
The lawsuit claims that these companies unlawfully conspired to boycott the site, depriving it of billions in advertising revenue.
The lawsuit targets food giants Unilever and Mars, healthcare provider CVS Health, renewable energy firm Orsted, and the World Federation of Advertisers (WFA).
According to X, these entities colluded to withhold their advertising dollars, drastically impacting the platform’s revenue.
This legal battle stems from a period in 2022, shortly after Musk acquired the platform.
During this time, advertising revenue took a nosedive as companies grew wary of the new owner’s commitment to curbing harmful online content.
Linda Yaccarino, X’s CEO, emphasized the broader implications, stating, “People are hurt when the marketplace of ideas is constricted. No small group of people should monopolize what gets monetized.”
Musk himself tweeted, “We tried being nice for 2 years and got nothing but empty words. Now, it is war.”
Central to the lawsuit is X’s claim that the accused firms adhered to safety standards from the WFA’s Global Alliance for Responsible Media (Garm).
Garm aims to tackle illegal or harmful content on digital platforms and its monetization through advertising.
X argues that by following these standards, the companies acted against their own economic interests, violating U.S. antitrust laws.
Bill Baer, former assistant attorney general for the Department of Justice’s antitrust division, casts doubt on X’s chances of success.
He remarked, “As a general rule, a politically motivated boycott is not an antitrust violation. It is protected speech under our First Amendment.”
Similarly, Professor Rebecca Haw Allensworth from Vanderbilt University noted that the boycott was a statement on X’s policies and brand integrity, which is protected by the First Amendment.
Despite the skepticism, X is seeking unspecified damages and a court order to prevent further conspiracies to withhold advertising spending.
The platform insists it has applied brand-safety standards that meet or exceed those of its competitors and claims it has become a “less effective competitor” in digital advertising sales due to the boycott.
Interestingly, the video-sharing platform Rumble, popular among right-wing influencers, filed a similar lawsuit against the WFA recently. This parallel legal action underscores the growing tension between digital platforms and advertising standards.
While X faces an uphill battle in court, the outcome of this lawsuit could have significant implications for digital advertising and platform content standards. As this legal saga unfolds, the tech and advertising worlds will be watching closely.
