X Files Antitrust Lawsuit Against Major Advertisers for 'Illegal Boycott'

X Sues Major Advertisers Over Alleged Illegal Boycott

In a significant turn of events, X, the platform formerly known as Twitter, has launched a lawsuit against a coalition of major advertisers claiming they orchestrated an "illegal boycott" against the platform. Filed recently, the lawsuit accuses brands like Unilever, Mars, CVS, and Ørsted of conspiring to collectively withhold billions in advertising revenue through their participation in the World Federation of Advertisers (WFA) initiative.

Understanding the GARM Initiative

The Global Alliance for Responsible Media (GARM), initiated by the WFA, mandates its participants to refrain from advertising on social media platforms that do not comply with specific safety standards established by the organization. X contends that GARM effectively organized an advertising boycott to pressure it into adhering to these guidelines. This lawsuit comes unexpectedly, especially after X’s announcement last month expressing enthusiasm about rejoining the GARM.

Statements from X's Leadership

X CEO Linda Yaccarino reinforced the company's stance in a video shared on the platform, stating, "The evidence and facts are on our side. They conspired to boycott X, which threatens our ability to thrive in the future. That puts your global Town Square — the one place that you can express yourself freely and openly — at long-term risk." Yaccarino’s statement highlights the significant impact this alleged boycott may have on the platform's future.

Elon Musk's Encouragement for Other Companies

In a notable social media post, Elon Musk, the owner of X, encouraged companies that have faced similar systematic boycotts by advertisers to consider legal action. He indicated that there could also be "criminal liability" under the Racketeer Influenced and Corrupt Organizations (RICO) Act, which targets organized crime.

House Judiciary Committee's Report

The lawsuit is supported by a recent report from the House Judiciary Committee issued on July 10, which criticized the WFA and GARM for their “collusive conduct to demonetize disfavored content.” This statement underscores the considerable political scrutiny the initiative is under, especially with House Judiciary Chairman Jim Jordan (R-OH) probing 40 companies involved with GARM concerning their boycott decisions targeting right-wing media figures and platforms, including The Joe Rogan Experience and Breitbart News.

Legal Hurdles Ahead for X

While X seeks to declare the advertisers' actions illegal and aims to recover damages to be determined at trial, the case’s success in court is uncertain. Experts note that the First Amendment protects advertisers' rights to choose where to allocate their resources, which could impede X's claims. Furthermore, watchdog group Check My Ads echoes this sentiment, affirming that advertisers hold the right to withhold funds from platforms perceived to promote hate or conspiratorial content.

Conclusion

This lawsuit adds to a recent string of legal battles faced by Musk, who previously withdrew a lawsuit against OpenAI and its co-founders. As X navigates these challenges, the outcome of this potentially precedent-setting lawsuit could reshape its relationship with advertisers and influence the ongoing discourse about content moderation in social media.

For a deeper insight into the implications of this lawsuit and the ongoing developments in media advertising, stay tuned.