Musk declares ‘war’ on advertisers as X sues ad alliance, companies | Social Media News

Brands had been wary of rapid changes initiated on X under Elon Musk’s ownership.

Elon Musk’s social media platform X has sued a global advertising alliance and several major companies, including Mars and CVS Health, accusing them of unlawfully conspiring to boycott the site and causing it to lose revenue.

X filed the lawsuit on Tuesday in federal court in Texas against the World Federation of Advertisers, Unilever and Danish renewable energy company Orsted, in addition to Mars and CVS Health.

The lawsuit said (PDF) advertisers, acting through a World Federation of Advertisers initiative called Global Alliance for Responsible Media, collectively withheld “billions of dollars in advertising revenue” from X, previously known as Twitter.

It said they acted against their economic self-interest in a conspiracy against the platform that violated United States antitrust law.

The World Advertising Federation, Unilever, Mars, CVS Health and Orsted did not immediately respond to requests for comment.

In a statement on Tuesday about the lawsuit, X’s chief executive Linda Yaccarino said, “People are hurt when the marketplace of ideas is constricted. No small group of people should monopolise what gets monetised.”

In a tweet on X, Musk declared “war” on the advertisers and said, “We tried being nice for 2 years and got nothing but empty words. Now it is war.”

Advertisement revenue at X slumped for months after Musk bought the company in 2022. Brands had been wary of rapid changes initiated under Musk’s ownership. Some advertisers had pulled back ad spending amid questions and fears that their brands would appear next to harmful content that under prior owners might have been removed.

The advertising group launched the responsible media initiative in 2019 to “help the industry address the challenge of illegal or harmful content on digital media platforms and its monetization via advertising.”

Christine Bartholomew, an antitrust expert and professor at University at Buffalo’s law school told Reuters that lawsuits alleging unlawful boycotts can face a high bar.

X must show that there was an actual agreement to boycott joined by each advertiser, Bartholomew said. “Proving this requirement is no small hurdle” in cases where an agreement might be implicit, she said.

Even if the case succeeds, X cannot force companies to spend ad revenue on the platform, Bartholomew said.

X said in its lawsuit that it has applied brand-safety standards that are comparable to those of its competitors and that “meet or exceed” measures specified by the Global Alliance for Responsible Media.

The lawsuit said X has become a “less effective competitor” in the sale of digital advertising.

X is seeking unspecified damages and a court order against any continued efforts to conspire to withhold advertisement dollars.