Elon Musk’s rebranded Twitter has accused an anti-hate speech group of costing the social media app “tens of millions of dollars” in revenues after advertisers paused spending on the platform, according to a lawsuit.
A legal filing by the owner of X, the new name for Twitter as of last month, accuses the Center for Countering Digital Hate (CCDH) of hurting the business financially through its research of content on the social media service.
The lawsuit filed in a US district court claimed that 16 unnamed advertisers had stopped spending on the platform, paused advertising plans or decided not to reactivate campaigns, after reading CCDH work.
It said at least eight organisations and companies, including multinational corporations that have advertised on X historically, had paused spending on the platform in June and July after reading CCDH reports. The lawsuit added that a further five separate companies, including large multinationals, had paused advertising spending plans around November last year – shortly after Musk’s purchase of the company – after reading CCDH research. Three more companies were not reactivating ad campaigns due to CCDH, the lawsuit said.
The filing said the cost of the advertising postponements ran into tens of millions of dollars.
“Based on the historical spend of the companies and organisations that have paused paid advertising and/or paused plans for future paid advertising, X Corp estimates that it has lost at least tens of millions of dollars in lost revenues as of the date of this complaint, with those amounts subject to increasing as time goes on,” the lawsuit said.
Advertising accounted for 90% of revenues in the last published annual results by Twitter, which covered 2021. Since then, ad revenue has plummeted with Musk tweeting recently that it had halved.
CCDH, a US-UK group, has regularly published research into X’s content since it was bought by Musk for $44bn (£34.4m) in October last year. Advertisers who have paused spending on the platform include carmaker Audi and Pfizer, the pharmaceuticals company.
The lawsuit filed on Monday in the US district court for the northern district of California is seeking unspecified damages for breach of contract, violation of the computer fraud and abuse act, intentional interference with contractual relations and inducing breach of contract.
Among other allegations, the lawsuit accuses CCDH of “unlawfully” scraping data from Twitter for its “flawed” research. CCDH research includes a recent study claiming that 99% of hate speech posted by a sample of subscribers to Twitter Blue – X’s premium service – was not acted on by the platform. The lawsuit also accuses CCDH of obtaining unauthorised access to data from Brandwatch, a consumer research company.
On Monday, CCDH published a letter from Musk’s legal representative, Alex Spiro of US law firm Quinn Emanuel, threatening legal action under the Lanham Act, a piece of US legislation that covers trademark law. However, the California lawsuit uses a different law firm, White & Case, and leans on a different piece of legislation.
CCDH’s chief executive, Imran Ahmed, said Musk was attempting to “bully us into silence”. In a statement he said: “Elon Musk’s latest legal threat is straight out of the authoritarian playbook – he is now showing he will stop at nothing to silence anyone who criticises him for his own decisions and actions.”
Ahmed added: “Musk is trying to ‘shoot the messenger’ who highlights the toxic content on his platform rather than deal with the toxic environment he’s created.”
