Nandini Roy Choudhury, writer
Brief news
- X, a social media platform owned by Elon Musk, has filed a lawsuit against a group of advertisers, claiming a “massive advertiser boycott” has resulted in billions of dollars in revenue loss and antitrust law violations.
- The lawsuit was filed in a federal court in Texas against the World Federation of Advertisers and its member companies, specifically targeting Unilever.
- The lawsuit alleges that the advertising group’s initiative, the Global Alliance for Responsible Media, facilitated an advertising hiatus following Musk’s acquisition of Twitter, leading to the loss of advertisers on X.
Detailed news
Wichita Falls, Texas— X, a social media platform owned by Elon Musk, has filed a lawsuit against a group of advertisers. The lawsuit claims that a “massive advertiser boycott” has resulted in the company losing billions of dollars in revenue and contravening antitrust laws.
The lawsuit was filed on Tuesday in a federal court in Texas by the company that was previously known as Twitter against the World Federation of Advertisers and its member companies, Unilever.
The advertising group’s initiative, the Global Alliance for Responsible Media, was accused of facilitating a period of advertising hiatus following Musk’s acquisition of Twitter for $44 billion in late 2022 and the subsequent revision of its staff and policies.
On Tuesday, Musk discussed the litigation on X, concluding that “now it is war” after two years of being polite and receiving “nothing but empty words.”
According to X CEO Linda Yaccarino, the lawsuit was partially the result of evidence discovered by the U.S. House Judiciary Committee, which indicated that a “group of companies organized a systematic illegal boycott” against X. This information was conveyed in a video announcement.
The committee, which is led by Republicans, conducted a hearing last month to determine whether the current laws are “sufficient to deter anticompetitive collusion in online advertising.”
Rather than a more recent dispute with advertisers that occurred a year later, the lawsuit’s allegations pertain to the initial stages of Musk’s Twitter ascendancy.
Many advertisers began to abandon X in November 2023, approximately one year after Musk acquired the company, due to their apprehensions regarding the placement of their advertisements next to pro-Nazi content and hate speech on the site. Musk further exacerbated the situation by endorsing an antisemitic conspiracy theory in his own posts.
Subsequently, Musk declared that advertisers who were withdrawing were engaging in “blackmail” and, employing a slander, advised them to depart.
Source : marketwatch.com; CNBC News
