Elon Musk’s social media platform X has recently filed a lawsuit against a global advertising alliance and several major companies, including Mars and CVS Health. This lawsuit alleges that these entities unlawfully conspired to boycott the platform, resulting in a significant loss of revenue for X.
X lodged the lawsuit in federal court in Texas against the World Federation of Advertisers, Unilever, Orsted, Mars, and CVS Health. It claims that advertisers, under the World Federation of Advertisers’ Global Alliance for Responsible Media initiative, deliberately withheld advertising revenue from X, which was previously known as Twitter. The lawsuit asserts that these actions were in violation of US antitrust laws and against the economic self-interest of the advertisers involved.
The World Federation of Advertisers, Unilever, Mars, and CVS Health have not yet provided a response to the allegations. Orsted declined to comment on the matter. X’s CEO, Linda Yaccarino, expressed concerns about the restriction of the marketplace of ideas due to the alleged conspiracy. She emphasized the importance of not allowing a small group of individuals to control what content gets monetized.
X witnessed a decline in ad revenue following Musk’s acquisition of the platform in 2022. Advertisers were reportedly hesitant to spend on ads under Musk’s ownership due to concerns about their brands being associated with harmful content that may not have been removed under previous ownership. The responsible media initiative launched by the advertising group aimed to address the issue of illegal or harmful content on digital platforms.
Antitrust expert Christine Bartholomew from the University at Buffalo’s law school highlighted the challenges that lawsuits alleging unlawful boycotts face. She mentioned the difficulty of proving an actual agreement to boycott among advertisers. Even if X’s case is successful, it may not compel companies to spend ad revenue on the platform. The lawsuit was filed in the Northern District of Texas, known for being a preferred venue for conservatives litigating against policies of the Biden administration.
X’s lawsuit seeks unspecified damages and a court order to prevent any future conspiracies to withhold ad dollars. The platform claims to have implemented brand-safety standards comparable to its competitors and those specified by the Global Alliance for Responsible Media. X alleges that the actions of the accused entities have made it a less effective competitor in the digital advertising market. Furthermore, video-sharing company Rumble also filed an antitrust lawsuit against the World Federation of Advertisers, indicating potential industry-wide concerns.
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