Elon Musk’s X Sues Global Advertisers For Alleged Revenue Boycott

Elon Musk’s social media platform X has initiated legal action against the World Federation of Advertisers (WFA) and several high-profile companies, including Mars and CVS Health, accusing them of conspiring to boycott the platform and causing substantial revenue losses. 

The lawsuit has been filed in federal court in Texas, names Unilever and Danish renewable energy company Orsted among the defendants. X claims these advertisers, through the WFA’s Global Alliance for Responsible Media (GARM) initiative, unlawfully withheld billions of dollars in advertising revenue from the platform.

The lawsuit alleges that the advertisers acted against their economic self-interests in a manner that violates US antitrust laws. Linda Yaccarino, CEO of X, said that limiting the marketplace of ideas is detrimental to the public and argued that no small group should control monetization decisions. 

The decline in X’s ad revenue has been noticeable since Musk’s acquisition of the company in 2022, as advertisers expressed concerns about their brands potentially appearing alongside harmful content that might have been removed under previous ownership.

GARM, launched by the WFA in 2019, aims to tackle the issue of illegal or harmful content on digital platforms and its monetisation through advertising. X contends that it has implemented brand-safety standards that match or surpass those of its competitors and the criteria set by GARM. The lawsuit asserts that the alleged conspiracy has rendered X a less effective player in the digital advertising market.

In its filing, X is seeking unspecified damages and a court order to prevent ongoing efforts to withhold advertising dollars. In a related move, video-sharing platform Rumble has also filed a separate antitrust lawsuit against the WFA, further highlighting the tensions between digital platforms and global advertisers.

(Inputs from Reuters)