X, Elon Musk’s social-media platform formerly known as Twitter, has filed a high-profile lawsuit against Twitch and several other major companies over what the website says was an organized advertiser boycott that left it in financial havoc as the battle for advertising revenue escalated. First lodged last August 2024, the lawsuit accused these defendants of conspiring to withhold billions in advertising money in violation of antitrust laws for unfair “restraint of trade.”.
Defendants include big-name brands like Twitch, Unilever, Mars, CVS Health and Orsted among others in the US District Court for the District of Northern Texas. X claims that these companies, along with others, colluded to withhold advertising from the platform starting last October in response to concerns over the type of content on the site. X alleges that this group action deprived the platform of an enormous amount of revenue that led to a serious dent in its financial stability.
Elon Musk’s acquisition of Twitter in 2022 brought a complete turnaround for the social networking giant. Within a few weeks into taking ownership, Musk had rechristened Twitter as X, aimed at renovating the image of the network and its reach.
The X platform, however, has struggled with major issuers after the acquisition, including a sharp slide in ad revenue. Moderation policies for content on the platform became strikingly lax under Musk’s new stewardship, but these are now another reason for advertisers to be concerned, along with lining up next to toxic content.
These moves elicited widespread public outcry, and many major advertisers withdrew their campaigns amidst concerns that their brands could be associated with hate speech or other far-extreme content. The boycott continued as a coalition of companies, including those listed in the lawsuit, began to cut or entirely hold their ad spending, with references to adherence to Global Alliance for Responsible Media standards-known as GARM-that aim at brand safety and content moderation.
In the suit, X contends that the boycott was not a result of brand safety concerns but actually a coordinated effort to flex market power and financially harm X. In the lawsuit, it is contended that these companies engaged in what X describes as a “coercive exercise of market power,” using their combined weight to hold back billions of dollars in advertising revenue in a fashion that ran contrary to anti-trust laws.
The lawsuit goes on to mention that these corporations came together and advanced their economic interests through the conduct at issue here, even if it involved a sacrifice for both the social media platform and its users. X says such firms are not only blowing a hole in the financial health of the platform but also bridling intellectual diversity by suppressing some points of view- an action which might have wider implications in the society.
Elon Musk publicly criticized the boycott, going as far as to say that he wasn’t interested in further negotiations. On X, he said, “We tried peace for two years, now it is war.” Musk’s fiery rhetoric puts into perspective just how deep the conflict runs as he vows to make the companies answer for what he describes as their leading role in the boycott.
— Linda Yaccarino (@lindayaX) August 6, 2024
Linda Yaccarino, X chief executive officer, also commented on the issue and in an open letter accused the boycott of undermining the marketplace of ideas. Government financial damage from the boycott is severe, she added, “People are hurt when the marketplace of ideas is undermined.” The WFA, along with its platform GARM, has responded by stating that it will contest the claims in court. According to WFA Chief Executive Stephan Loerke, the organization believes it has acted within the relevant rules on competition and will now strongly defend its actions in court.
This is not the first lawsuit filed against X since Musk’s acquisition. In 2023, X filed a lawsuit against the Center for Countering Digital Hate and Media Matters over reports related to hate speech and misinformation on the platform, claiming defamation and business injury. One lawsuit, filed against the Center for Countering Digital Hate, was dismissed; another, filed against Media Matters, is still pending and to be tried in 2025.
