Elon Musk’s social media platform X (formerly known as Twitter) has filed a lawsuit against a global advertising initiative and several major companies, including Mars and CVS Health. The lawsuit alleges an illegal conspiracy to boycott the platform, which has resulted in significant revenue losses.
The case was filed on Tuesday in a federal court in Texas against entities including the World Federation of Advertisers, Unilever, the Danish renewable energy company Ørsted, as well as Mars and CVS Health. According to the lawsuit, advertisers, through an initiative from the World Federation of Advertisers called the Global Alliance for Responsible Media, have collectively withheld “billions of dollars in advertising revenue” from X.
The lawsuit claims that these companies acted against their own financial interests in a conspiracy against the platform, violating U.S. antitrust laws. The World Federation of Advertisers, Unilever, Mars, CVS Health, and Ørsted have not immediately responded to requests for comments.
Linda Yaccarino, CEO of X, stated on Tuesday regarding the lawsuit: “People suffer when the market for ideas is restricted. No small group should monopolize what gets monetized.” In a tweet, Musk declared “war” on advertisers, saying, “We tried to be nice for two years and got only empty words. Now it’s war.”
Advertising revenues on X have been declining for several months following Musk’s acquisition of the company in 2022. Many brands have been hesitant due to the rapid changes implemented under Musk’s ownership. Several advertisers have pulled their advertising budgets for fear that their brands would be placed next to harmful content that previous owners might have removed.
The advertising initiative, launched in 2019, aims to “help the industry address the challenges of illegal or harmful content on digital media platforms and its monetization through advertising.” Christine Bartholomew, an antitrust expert and professor at the University at Buffalo School of Law, points out that cases of illegal boycotts can be difficult to prove. Musk’s X must demonstrate that there has been an actual agreement among each advertiser to boycott the platform, which could present a significant challenge.
Even if the lawsuit were to succeed, X cannot compel companies to use advertising revenues on the platform, Bartholomew emphasizes. In the lawsuit, X claims that it has employed brand safety standards comparable to those of its competitors that “meet or exceed” the requirements set by the Global Alliance for Responsible Media. X also asserts that it has become a “less effective competitor” in digital advertising sales.
X is seeking unspecified damages as well as a court injunction against any ongoing efforts to conspire to withhold advertising funds.