X Sues Advertisers Over Alleged Boycott
Less than a year after he told them to “go f**k yourself,” Elon Musk is big mad that advertisers still don’t want to spend money on X. He’s so furious that he’s doing what any self-respecting wealthiest man on earth would do: sue them.
Musk’s X Corp has filed a lawsuit against a group of major advertisers, accusing them of violating antitrust laws through a coordinated boycott. The legal action, initiated in a Texas federal court, targets the Global Alliance for Responsible Media (GARM) and several of its members.
The suit alleges that GARM orchestrated a conspiracy resulting in the withholding of billions in advertising revenue from X following Elon Musk’s acquisition and rebranding of the platform in 2022.
In an open letter to advertisers, X CEO Linda Yaccarino quoted a report from the Republican-controlled House Judiciary Committee:
“Evidence obtained by the Committee shows that GARM and its members directly organized boycotts and used other indirect tactics to target disfavored platforms, content creators, and news organizations in an effort to demonetize and, in effect, limit certain choices for consumers.”
She criticized this behavior and claimed it was detrimental to the industry and users alike.
“The consequence – perhaps the intent – of this boycott was to seek to deprive X’s users, be they sports fans, gamers, journalists, activists, parents or political and corporate leaders, of the Global Town Square,” Yaccarino wrote.
“This behavior is a stain on a great industry, and cannot be allowed to continue,” she claimed.
GARM, established by the World Federation of Advertisers, includes prominent companies such as Dell (NYSE: DELL), Microsoft (Nasdaq: MSFT), and PepsiCo (Nasdaq: PEP). However, only four members — CVS Health (NYSE: CVS), Unilever (LON: ULVR), Orsted (CPH: ORSTED), and Mars — are specifically named as defendants. These companies significantly reduced or halted their advertising on the platform shortly after Musk’s takeover.
The lawsuit contends that numerous GARM members and non-members paused their advertising in late 2022, citing concerns over increased hate speech and misinformation following changes implemented by Musk. These changes included the dismantling of Twitter’s trust and safety council and the reduction of content moderation staff.
X is seeking damages and a permanent injunction against the World Federation of Advertisers, invoking antitrust laws. Musk has publicly encouraged other companies affected by advertiser boycotts to take legal action, suggesting potential criminal liability under racketeering laws.
The lawsuit follows a recent order by the House Judiciary Committee for 40 GARM-affiliated companies to provide documents related to their involvement in what the committee terms “corporate collusion.”
In a parallel move, Rumble, a right-wing video-sharing platform, has joined X in the lawsuit, labeling GARM and the World Federation of Advertisers as an “advertising cartel.”
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