Elon Musk’s social media platform, X (formerly Twitter), has filed a lawsuit against several major advertisers, accusing them of conspiring to boycott advertising after Musk’s takeover. Companies such as Nestlé, Abbott Laboratories, Colgate, Lego, Pinterest, Tyson Foods, Shell, CVS Health, Mars, Ørsted, and Twitch are named in the suit.
Accusations of Collusion
The lawsuit, filed in Texas, claims that the Global Alliance for Responsible Media (GARM) played a key role in orchestrating this boycott. According to the complaint, GARM and its members withheld billions of dollars in ad revenue from X in an illegal effort to damage the platform’s financial standing.
GARM and WFA’s Role
Originally established in 2019, GARM set guidelines for identifying harmful content like hate speech and misinformation. X was once a member of the initiative but left after GARM faced difficulties, including a lawsuit filed by X. GARM ultimately dissolved due to a lack of resources.
Impact on X’s Revenue
The lawsuit argues that, between November and December 2022, at least 18 GARM members stopped advertising on Twitter. This boycott occurred shortly after Musk’s $44 billion acquisition of the platform. As a result, X’s ability to compete in digital advertising and user engagement was severely impacted.
X Seeks Damages
In response, X is seeking “trebled compensatory damages” and injunctive relief, alleging violations of US antitrust laws. The platform’s ad revenue dropped significantly after Musk’s acquisition, driven by layoffs and the return of controversial accounts.