X Sues Advertisers Over Alleged Boycott, Claiming Billions in Losses

Elon Musk's social media platform X has initiated legal action against a group of advertisers, alleging a coordinated boycott that resulted in substantial financial losses. The lawsuit, filed on August 6, 2024, in a Texas federal court, targets the World Federation of Advertisers and several major companies, including Unilever, Mars, CVS Health, and Orsted.

The legal complaint asserts that the Global Alliance for Responsible Media, an initiative of the World Federation of Advertisers, orchestrated a pause in advertising following Musk's $44 billion acquisition of Twitter in October 2022. This action, according to X, violated antitrust laws and deprived the company of billions in revenue.

Linda Yaccarino, CEO of X, cited evidence from a recent U.S. House Judiciary Committee hearing as partial basis for the lawsuit. The committee, established in 1813, convened last month to examine the adequacy of current laws in deterring anticompetitive collusion in online advertising.

The lawsuit primarily focuses on events immediately following Musk's takeover, rather than more recent disputes. In November 2023, approximately a year after the acquisition, X faced another wave of advertiser departures due to concerns about content moderation and Musk's public statements.

"Now it is war"

This legal action marks a significant escalation in the ongoing tension between X and its advertisers. The platform, which boasts approximately 396.5 million global active users as of 2024, has faced numerous challenges since its rebranding from Twitter in July 2023.

The defendants in the lawsuit represent a diverse group of multinational corporations. Unilever, a British consumer goods company founded in 1929, and Mars, an American confectionery and pet food manufacturer established in 1911, are among the sued entities. Also named are CVS Health, an American healthcare company founded in 1963, and Orsted, a Danish power company formed in 2006.

This case highlights the complex relationship between social media platforms and advertisers in the digital age. With global social media advertising revenue projected to reach $268 billion in 2024, the outcome of this lawsuit could have far-reaching implications for the industry.

As the legal proceedings unfold, the social media landscape continues to evolve, with X at the center of a debate about free speech, content moderation, and the power dynamics between platforms and advertisers.