In a significant move today, X Sues Advertisers for Alleged Boycott. X has filed a lawsuit against a group of major advertisers, accusing them of conspiring to withhold advertising dollars from the social media platform. This action follows Elon Musk’s takeover, after which X has been perceived as more open to hosting controversial content.
The Lawsuit Details
Filed in federal court in Texas, the lawsuit alleges that dozens of advertisers heeded the advice of the Global Alliance for Responsible Media (GARM) to boycott advertising on X following Musk’s acquisition. According to the suit, this boycott has cost the company billions of dollars in revenue. X is seeking unspecified damages for violation of US antitrust law.
Rumble’s Parallel Legal Action
In a related development, Rumble, a right-wing video site founded over a decade ago as an alternative to YouTube, also filed a similar lawsuit. Rumble accuses GARM of conspiring to perpetrate an advertiser boycott against it and other platforms. The company declared this move illegal in a post on its X account.
Political and Legal Context
The US House Judiciary Committee, controlled by Republicans and concerned about censorship of right-wing views on social media, has been investigating GARM. A preliminary report in July suggested that GARM’s coordination of advertiser actions might be illegal under antitrust laws and could threaten fundamental American freedoms. X’s lawsuit leverages internal GARM emails reviewed by the congressional panel.
Statements from X
In a video shared on X, CEO Linda Yaccarino expressed shock at the evidence uncovered by the House Judiciary Committee, claiming there was a systematic illegal boycott against X. Yaccarino emphasized the importance of free speech and accused advertisers of targeting both the company and its users, threatening the platform’s role as a global town square.
“People are hurt when the marketplace of ideas is constricted,” Yaccarino stated.
Response from Advertisers
The World Federation of Advertisers, overseeing GARM, has not yet responded to requests for comment. The lawsuit names Unilever, Mars, CVS, and a Danish energy company as defendants. Rumble’s suit also targets the ad agency WPP. These companies have yet to comment on the lawsuits.
The Broader Impact
X’s lawsuit argues that advertisers previously negotiated individual deals with social media platforms to set content sponsorship boundaries. GARM, however, has enabled advertisers to aggregate their power, establish industry standards for content moderation, and enforce them. X claims this collective action undermines the competitive process and overrides consumer interests.
The new lawsuit contends that GARM’s actions have prevented advertisers from taking advantage of low-priced advertising inventory on X, despite the platform’s brand safety standards meeting or exceeding industry norms.
Historical Context
X’s troubled relationship with advertisers dates back to Musk’s acquisition of the company formerly known as Twitter. The lawsuit claims that GARM’s public letter to Musk triggered an immediate boycott of Twitter ads post-purchase in October 2022, with many advertisers ceasing their ad spend. This culminated in a November 2023 report by Media Matters, which revealed pro-Nazi content on X appearing alongside reputable brand ads, prompting companies like IBM, Disney, and Apple to pull their ads.
Defense and Future Implications
Sarah Kay Wiley, director of policy at Check My Ads, argues that advertisers have a First Amendment right to choose their associations. She contends that requiring advertisers to support viewpoints they disagree with would be unconstitutional.
Similar antitrust accusations have been made by other social media companies. For instance, Rumble sued Google’s advertising business in May, alleging antitrust violations. Google recently filed a motion to dismiss the complaint, arguing that Rumble lacked standing to sue as it did not compete with Google’s offerings. A hearing is scheduled for January.
Conclusion
The outcome of X’s lawsuit against major advertisers and the parallel actions by Rumble could have far-reaching implications for the dynamics between social media platforms, advertisers, and regulatory bodies. The unfolding legal battles will be closely watched by the tech and advertising industries, as well as by advocates of free speech and fair market practices.
