Elon Musk's social media platform, X, has filed a lawsuit against a group of advertisers, accusing them of violating antitrust laws by orchestrating an advertising boycott against the company. The lawsuit, filed in Texas, targets the Global Alliance for Responsible Media (GARM), the World Federation of Advertisers, and specific GARM members including CVS Health, Mars, Orsted, and Unilever.
The legal action comes after Musk took over the platform in 2022 and faced a significant drop in advertising revenue due to the alleged boycott. X CEO Linda Yaccarino publicly announced the lawsuit through a video and an open letter posted on the platform, claiming that the advertisers colluded to withhold billions of dollars in advertising revenue from X.
In her letter, Yaccarino expressed concerns about the impact of the boycott on X's diverse user base, which includes sports fans, gamers, journalists, activists, parents, and political and corporate leaders. She emphasized the importance of maintaining a fair marketplace of ideas and criticized the advertisers for attempting to stifle certain viewpoints through an illegal boycott.
Since Musk's takeover of the platform, formerly known as Twitter, and his emphasis on free speech, X has experienced a significant exodus of advertisers. The departure of advertisers followed criticism of antisemitic and hateful content on the platform, leading to a sharp decline in advertising revenue.
Despite efforts to attract advertisers back to the platform, including Musk's direct appeals, the future of X's advertising revenue remains uncertain. Musk has been vocal about his support for companies facing similar boycotts, encouraging them to consider legal action and suggesting potential criminal liability under the RICO Act.
The lawsuit marks a significant development in the ongoing challenges faced by X in the wake of Musk's leadership changes and the subsequent advertiser boycott. The outcome of the legal action could have far-reaching implications for the platform's future and the broader landscape of online advertising.
