X, formerly Twitter, has taken a number of companies to court accusing them of leading a “massive advertiser boycott” on the platform.
X, which is owned by Tesla CEO Elon Musk, has witnessed dramatic falls in advertising revenue following the billionaire’s acquisition.
The lawsuit was filed on Tuesday in a federal court in Texas against various firms, including Unilever, Mars, CVS Health, and Orsted. The targeted companies are members of the World Federation of Advertisers, which is an initiative of the Global Alliance for Responsible Media (GARM).
According to the complaint, it is an “an antitrust action relating to a group boycott by competing advertisers of one of the most popular social media platforms in the United States”. The lawsuit accuses GARM of carrying out a coordinated conspiracy to withdraw advertisements from X and cause monetary losses to the company.
Musk, in a post on X, said, “We tried peace for two years, not it’s war.” This indicates that the billionaire is determined to follow through with his legal plans against advertisers for allegedly withdrawing “billions of dollars in advertising revenue” from X.
X’s CEO Linda Yaccarino, on the other hand, said, “People are hurt when the marketplace of ideas is constricted. No small group of people should monopolize what gets monetized.” She added that the purpose of the boycott is “to deprive X’s users, be they sports fans, gamers, journalists, activists, parents or political and corporate leaders, of the Global Town Square”.
Advertising revenue on X has dropped drastically after Musk acquired the platform for $44 billion in October 2022. The reasons for brands withdrawing advertising from X have largely been ascribed to the radical changes incorporated by Musk in X’s technical and organisational infrastructure. Some of the reasons include reinstatement of previously suspended accounts, the rise in hate speech, termination of the human rights team, and increasing issues related to content moderation.
