Media Matters

X, the social media platform owned by Elon Musk, has initiated legal proceedings against several advertisers for boycotting its platform. X Corp’s CEO, Linda Yaccarino, announced the lawsuit in an open letter published on social media.

Yaccarino disclosed that X has filed an antitrust lawsuit against the Global Alliance for Responsible Media (GARM), the World Federation of Advertisers (WFA), and members of GARM, including CVS Health, Mars, Ørsted, and Unilever.

“This decision was not taken lightly, but it is a direct consequence of their actions. The unlawful conduct of these organisations and their leaders has cost X billions of US dollars,” Yaccarino wrote.

The move to seek legal redress follows a recent report from the US House of Representatives Judiciary Committee. According to Yaccarino, the report revealed evidence of an “illegal boycott” by multiple companies.

“The evidence obtained by the Committee indicates that GARM and its members directly orchestrated boycotts and used other indirect tactics aimed at undesirable platforms, content creators, and news organisations to demonetise and effectively limit certain choices for consumers,” she noted, referencing the report.

Yaccarino claims that the “consequence, and perhaps the objective of this boycott,” was to deprive X users of access to a “global town square.”

Elon Musk also commented on the situation, declaring a state of war with the advertisers boycotting X.

“For two years, we tried to make peace, but now it’s war,” he stated on social media.

The boycott by these companies began en masse following a scandal last year. Media Matters, an organisation monitoring media content, released a report alleging that brand advertisements on X were appearing alongside pro-Nazi content.

In response, X filed a lawsuit against Media Matters, accusing the organisation of defamation. However, the situation escalated when Musk later publicly criticised advertisers who ceased cooperation with X.

The tensions have significantly impacted X’s revenue streams, as major corporations withdrew their advertising spending from the platform, leading to financial losses. The allegations brought forth by Media Matters severely tarnished the platform’s reputation, contributing to the exodus of advertisers.

This legal action by X highlights the broader challenges tech companies face in balancing content moderation with revenue generation. The accusations against GARM and its members suggest a concerted effort to control the digital advertising landscape, potentially stifling competition and limiting consumer choices.

The outcome of this lawsuit could have far-reaching implications for the digital advertising industry and the operational strategies of social media platforms.

If X succeeds, it may set a precedent for how companies can respond to organised boycotts and the roles industry watchdogs play in shaping advertising practices.

Conversely, a ruling in favour of GARM and its affiliates could reinforce the power of collective action among advertisers and advocacy groups in influencing platform policies and content standards.

Main Image: X Corp, via Wikipedia.