Elon Musk told advertisers to “go f–k yourself” last fall at the conference above, and today he’s suing them for allegedly colluding to boycott his social media platform X.
The lawsuit brought by X in federal court in Texas names the World Federation of Advertisers as well as individual companies Mars, CVS, Unilever and Orsted, a Danish clean energy firm. Many corporations bailed when racist and antisemitic content seemed to explode on Twitter after Musk acquired it in the fall of 2022. They‘ve remained wary, and Musk himself has amplified controversial posts. The suit doesn’t claim advertisers can’t boycott, but that they can’t decide together to do it.
“Defendants conspired, along with dozens of non-defendant co-conspirators, to collectively withhold billions of dollars in advertising revenue from Twitter [now X] … Concerned that Twitter might deviate from certain brand safety standards for advertising on social media platforms set through GARM, the conspirators collectively acted to enforce Twitter’s adherence to those standards through the boycott.”
GARM is the Global Alliance for Responsible Media.
“This is an antitrust action relating to a group boycott by competing advertisers of one of the most popular social media platforms in the United States,” X’s suit said. “GARM’s members “did, abruptly and in lockstep, boycott Twitter by discontinuing entirely or substantially reducing their previously substantial advertising purchases,” calling it a conspiracy and collusion.
The company is asking for a jury trial with “trebeled” compensatory damages as well as injunctive relief, saying there is still boycotting.
X said its brand safety standards are comparable to those of its competitors, and meet of exceed GARMs parameters, but also that each social media platform should be free to set its own brand safety standards. It believes that the “free market would see platforms with inefficient standards lag behind.”
Whether or not you buy that, the issue in the suit is “collective action among competing advertisers to dictate brand safety standards to be applied by social media platforms.”
“The brand safety standards set by GARM should succeed or fail in the marketplace on their own merits and not through the coercive exercise of market power by advertisers acting collectively to promote their own economic interests through commercial restraints at the expense of social media platforms and their users.”
The issue is the subject of an active investigation by the Republican-led House Judiciary Committee, which emboldened the suit by an interim report finding that “The extent to which GARM has organized its trade association and coordinates actions that rob consumers of choices is likely illegal under the antitrust laws and threatens fundamental American freedoms.”
X described a major economic hit from the boycotts. “X became a less effective competitor to other social media platforms in the sale of digital advertising and in competing for user engagement on its platform. By sharply curtailing its revenues, the boycott has reduced X’s ability to invest in new or improved functionality, thus harming the consumers who use X’s platform.”
X CEO Linda Yaccarino, in a video and a letter to advertisers posted on X, explained why the platform is suing them — because they are disrupting “the marketplace of ideas” as well as costing X billions of dollars.
“To those who broke the law, we say enough is enough. We are compelled to seek justice for the harm that has been done by these and potentially additional defendants, depending what the legal process reveals.”