Social media platform X is accusing major advertisers of an “illegal boycott” in an anti-trust lawsuit filed overnight on Tuesday.
The controversial social network company is pointing the finger at Unilever (LON:ULVR), Mars, CVS Health (NYSE:CVS) and renewable energy company Orsted, claiming they unlawfully conspired to boycott the site through an initiative called Global Alliance for Responsible Media (GARM).
Advertisers abandoned X in droves after the platform’s censorship and content guidelines changed under Musk’s leadership, leading to an uptick in pro-racial supremacist content and hate speech on the site.
The issue was further compounded by Musk’s own tweets, which appeared to endorse antisemitic conspiracy theories and support known neo-Nazi agitators.
We tried peace for 2 years, now it is war https://t.co/elgT62uDtF— Elon Musk (@elonmusk) August 6, 2024
As of October 2023, ad revenue for X had fallen at least 55% year-on-year and dropped 78% in December 2022 compared to the same month the previous year, according to a report by Reuters.
Congressional hearing sparks lawsuit
The lawsuit comes after a Republican party-led committee released an interim staff report examining the Global Alliance for Responsible Media (GARM).
The report pointed to the GARM’s market power, accounting collectively for 90% of global advertising spending, and its strong influence over major brands and advertising agencies.
The report suggests GARM's actions may violate Section 1 of the Sherman Act, highlighting instances where GARM members colluded to cut advertising revenue on platforms like Twitter and targeted specific content creators and news outlets.
University of Buffalo antitrust expert and law professor Christine Bartholomew told Reuters that proving the case would be difficult.
X must show that there was an actual agreement to boycott joined by each advertiser, Bartholomew said.
"Proving this requirement is no small hurdle" in cases where an agreement might be implicit, she told the masthead, explaining that even if the case succeeds, X cannot force companies to spend advertising revenue on the platform.
The company is seeking unspecified damages and a court order against any ongoing conspiracy against the platform.