Expanding Lawsuit Against Advertisers
The social media platform X Sues Major Companies as it escalates its legal battle against major corporations, alleging they conspired to boycott the platform through an industry group. An amended complaint filed on Saturday adds more companies to a 2024 lawsuit accusing the Global Alliance for Responsible Media (GARM) and its members of violating antitrust laws by collectively withdrawing advertising from X.
Initially, the lawsuit named companies like CVS, Mars, Ørsted, and Twitch, alleging they colluded to withhold billions in advertising revenue after Musk acquired Twitter in 2022. The updated complaint expands the list, now including Nestlé, Abbott Laboratories, Colgate-Palmolive, Lego, Pinterest, Tyson Foods, and Shell International. The lawsuit claims these companies coordinated to enforce certain brand safety standards, influencing advertising decisions across the industry.
Allegations of Anti-Competitive Conduct
X Sues Major Companies arguing that their collective actions hinder fair competition in the advertising space. According to the complaint, GARM and its members celebrated when X failed to meet its revenue targets, and the boycott continues to negatively impact the platform despite its efforts to align with or exceed GARM’s safety standards.
Musk’s lawyers contend that social media companies should have the autonomy to set their own brand safety standards based on their unique platforms and user bases. They claim that advertisers should make individual decisions rather than collectively imposing standards that limit market competition. The lawsuit argues that such coordinated efforts unfairly concentrate power among a select group of advertisers, overriding consumer interests.
Several of the newly named companies, including Nestlé and Lego, have yet to respond to requests for comment regarding their inclusion in the lawsuit.
X’s Struggles with Advertisers Post-Rebrand
Since Musk’s acquisition and rebranding of Twitter to X, the platform has undergone significant changes, including staff layoffs, reduced content moderation, and the reinstatement of previously banned accounts, including that of the former U.S. president. These moves have intensified tensions between X and advertisers, leading to a strained relationship with major brands.
In 2023, X CEO Linda Yaccarino attempted to repair ties by publishing an open letter to advertisers, outlining how the fractured relationship had impacted the platform. However, the lawsuit suggests that X continues to struggle with securing advertising revenue due to what it describes as an orchestrated boycott by major corporations.
As X Sues Major Companies, the case could have far-reaching implications for how advertising industry groups influence digital platforms and the extent to which collective advertiser actions impact competition in the market.
