On Tuesday, Elon Musk’s social media platform X sued a worldwide advertising alliance and numerous big corporations, including Mars and CVS Health, accusing them of illegally conspiring to boycott the site and causing it to lose money.
X sued the World Federation of Advertisers, Unilever, the Danish renewable energy business Orsted, Mars, and CVS Health in federal court in Texas.
The lawsuit claims that advertisers, working through a World Federation of Advertisers program dubbed Global Alliance for Responsible Media, withheld “billions of dollars in advertising revenue” from X, formerly known as Twitter.
It claimed they worked against their own economic interests in a conspiracy against the platform that violates US antitrust law.
The World Federation of Advertisers, Unilever, Mars, CVS Health, and Orsted did not immediately respond to requests for comment.
In a statement on the lawsuit issued on Tuesday, X’s CEO Linda Yaccarino stated that “people are hurt when the marketplace of ideas is constricted.” “No small group of people should control what is monetized.”
Ad revenue atX fell for months after Musk purchased the firm in 2022. Some marketers were leery about ad spending under Musk, fearing that their logos would show alongside damaging content that had previously been banned.
A US judge concluded on Monday that Google broke antitrust laws by investing billions of dollars to establish an illegal monopoly and become the world’s default search engine.
In 2019, the advertising organization announced the Responsible Media Initiative to “help the industry address the challenge of illegal or harmful content on digital media platforms and its monetization via advertising.”
Christine Bartholomew, an antitrust expert and law professor at the University of Buffalo, told Reuters that lawsuits alleging illegal boycotts can be difficult to win.
According to Bartholomew, X must demonstrate that each advertiser signed a boycott pact. “Proving this requirement is no small hurdle” in circumstances when an agreement may be implied, she stated.
Even if the case is successful, Bartholomew believes X cannot compel corporations to spend ad revenue on the platform.
The case was brought in the Northern District of Texas and assigned to United States District Judge Reed O’Connor. The district has been a popular location for conservatives seeking to overturn Biden administration policy.
In its complaint, X stated that it had implemented brand-safety standards that are equivalent to those of its competitors and “meet or exceed” requirements defined by the Global Alliance for Responsible Media.
The complaint claims that X has become a “less effective competitor” in the sale of digital advertising.
X is seeking monetary damages and a court order prohibiting any further attempts to cooperate to withhold ad dollars.
On Tuesday, video-sharing startup Rumble filed a separate antitrust action against the World Federation of Advertisers.
