WICHITA FALLS, Tex. — Elon Musk’s social media platform X has sued a group of advertisers, alleging that a “massive advertiser boycott” deprived the company of billions of dollars in revenue and violated antitrust laws.
The company formerly known as Twitter filed the lawsuit Tuesday in a federal court in Texas against the World Federation of Advertisers and member companies Unilever, Mars, CVS Health and Orsted.
It accused the advertising group’s initiative, called the Global Alliance for Responsible Media, of helping to coordinate a pause in advertising after Musk bought Twitter for $44 billion in late 2022 and overhauled its staff and policies.
Musk posted about the lawsuit on X on Tuesday, saying “now it is war” after two years of being nice and “getting nothing but empty words.”
X CEO Linda Yaccarino said in a video announcement that the lawsuit stemmed in part from evidence uncovered by the U.S. House Judiciary Committee which she said showed a “group of companies organized a systematic illegal boycott” against X.
The Republican-led committee had a hearing last month looking at whether current laws are “sufficient to deter anticompetitive collusion in online advertising.”
The lawsuit’s allegations center on the early days of Musk’s Twitter takeover and not a more recent dispute with advertisers that came a year later.
In November 2023, about a year after Musk bought the company, a number of advertisers began fleeing X over concerns about their ads showing up next to pro-Nazi content and hate speech on the site in general, with Musk inflaming tensions with his own posts endorsing an antisemitic conspiracy theory.
Musk later said those fleeing advertisers were engaging in “blackmail” and, using a profanity, essentially told them to go away.
Elon Musk’s X, the company founded by billionaire entrepreneur Elon Musk, has recently filed a lawsuit against advertisers for an alleged ‘massive advertiser boycott’ following the acquisition of Twitter. The lawsuit, which was filed in a California court, accuses the advertisers of engaging in anticompetitive behavior and attempting to stifle competition in the digital advertising market.
The controversy began when Elon Musk’s X acquired Twitter, one of the largest social media platforms in the world, in a blockbuster deal worth billions of dollars. Following the acquisition, several major advertisers reportedly pulled their ads from Twitter, citing concerns about the platform’s new ownership and potential changes to its policies.
In response, Elon Musk’s X filed a lawsuit against the advertisers, alleging that they had conspired to boycott the platform in an attempt to harm its business and drive down its value. The lawsuit claims that the advertisers’ actions constitute a violation of antitrust laws and are intended to restrict competition in the digital advertising market.
The lawsuit also alleges that the advertisers’ boycott has had a significant impact on Twitter’s revenue and user base, causing irreparable harm to the platform and its users. Elon Musk’s X is seeking damages for lost revenue and reputational harm, as well as injunctive relief to prevent further anticompetitive behavior by the advertisers.
The case has sparked debate among legal experts and industry analysts, with some arguing that the advertisers’ actions may indeed constitute anticompetitive behavior, while others suggest that they are simply exercising their right to choose where to advertise. The outcome of the lawsuit could have far-reaching implications for the digital advertising industry and the power dynamics between advertisers and platform owners.
In the meantime, Twitter continues to operate under its new ownership, with Elon Musk’s X implementing changes to the platform’s policies and features. The lawsuit serves as a reminder of the complex legal and ethical issues that can arise in the fast-paced world of technology and advertising, and underscores the importance of fair competition and transparency in the digital marketplace.
