X lawsuit? Elon Musk’s social media platform X has launched a legal battle against some major advertisers, accusing them of illegally boycotting the site and causing loss of revenue.
The X lawsuit, filed in federal court in Texas, names the World Federation of Advertisers (WFA), Unilever, Mars, CVS Health and Orsted as defendants. The central allegation is that these organizations, acting through the Global Alliance for Responsible Media (GARM), conspired to cut billions of dollars in advertising revenue from X.
A Message to X Users pic.twitter.com/6bZOYPhWVa
— Linda Yaccarino (@lindayaX) August 6, 2024
X lawsuit, GARM, WFA, Linda Yaccarino, and some injustices
The X lawsuit, filed in federal court in Texas, targets big names like Mars, CVS Health, Unilever, and Danish renewable energy company Orsted. X alleges that these advertisers, acting through the World Federation of Advertisers‘ Global Alliance for Responsible Media initiative, collectively withheld billions of dollars in advertising revenue from the platform.
According to the X lawsuit, this action violates U.S. antitrust law. The platform claims these advertisers acted against their economic interests in a conspiracy against X. Linda Yaccarino, X’s chief executive, stated that “people are hurt when the marketplace of ideas is constricted.”
Ad revenue rollercoaster the X factor
The X lawsuit follows months of ad revenue decline after Musk bought the company in 2022. Many advertisers have expressed concern about their brands appearing alongside potentially harmful content on the platform under new ownership. Advertisers simply stated that they did not want to see NSFW content under their posts. After Elon Musk turned Twitter into X, he changed things quite a bit in terms of content.
X claims in the lawsuit that it has implemented brand safety standards comparable to its competitors and that these measures “meet or exceed” those outlined by the Global Alliance for Responsible Media. But the platform says it has become a “less effective competitor” in digital ad sales.
Legal eagles weigh in on the X lawsuit
Antitrust experts warn that the X case faces important challenges. Christine Bartholomew, a professor at the University at Buffalo Law School, points out that X must prove that each advertiser entered into an actual agreement to boycott. This requirement can be difficult to prove, especially where an agreement may be implicit.
Bartholomew notes that even if the X lawsuit is successful, X cannot force companies to spend their ad revenue on the platform. The case was assigned to US District Judge Reed O’Connor in the Northern District of Texas, which has become the court of choice for conservatives suing to block the Biden administration’s policies.
X marks the spot for controversy
The X case is not an isolated incident in the platform’s recent history. Since Musk’s acquisition, X has been embroiled in various controversies related to content moderation and free speech issues. These disputes have contributed to the advertiser exit that the X lawsuit now seeks to address.
X’s lawsuit is also at the center of broader debates about the role of social media platforms in shaping public discourse and their responsibility for content moderation. By bringing these issues to the forefront, the X case challenges the balance between free speech and brand safety.
Advertising alliance under fire
The Global Alliance for Responsible Media, launched in 2019, aims to help the industry address challenges related to illegal or harmful content on digital media platforms and its monetization through advertising. The X lawsuit directly challenges this initiative, potentially setting a precedent for how such alliances operate in the future.
X seeks unspecified damages and a court order against any continued efforts to conspire to withhold ad dollars. This X lawsuit could have far-reaching implications for the relationship between social media platforms and advertisers, potentially reshaping the digital advertising landscape.
As the X lawsuit unfolds, it will undoubtedly attract attention from industry observers, legal experts, and social media users alike. The outcome could influence how social media platforms interact with advertisers and handle content moderation in the future.
Whether the X lawsuit will successfully rekindle its advertising relationships remains to be seen. One thing’s for sure: this legal battle will be closely watched by all players in the social media and advertising industries.
Featured and all image credit: Furkan Demirkaya / Bing AI
