X Corp., formerly known as Twitter, has escalated its battle with the advertising industry,
filing a federal antitrust lawsuitagainst a coalition of major advertisers and their trade group. The lawsuit alleges that these companies conspired to boycott the platform, resulting in billions of dollars in lost advertising revenue.
“We tried peace for 2 years, now it is war,” Musk
posted on X about the lawsuit.
At the heart of the lawsuit is the
Global Alliance for Responsible Media (GARM), a group formed by the
World Federation of Advertisers (WFA) to set standards for brand safety in digital advertising. According to the complaint filed Tuesday in Texas’ northern district, X claims that GARM and its members, including giants like CVS Health, Mars and Unilever, colluded to pressure advertisers to pull their spending from the platform following Elon Musk’s acquisition in 2022. The social platform argues that this coordinated action was an illegal boycott designed to harm the company.
At least 18 brands associated with the group stopped advertising on Twitter from November 2022 through December 2022. Dozens more of the group’s members cut back spending on ads through 2023, according to the lawsuit.
A wider battle
The company has been embroiled in legal disputes with various entities, including media watchdog groups and former employees. The platform has faced significant challenges in retaining advertisers since Musk’s takeover, with many companies expressing concerns about brand safety and content moderation.
Industry response
The advertising industry has yet to issue a unified response to the lawsuit. GARM, which is seen by many as a valuable tool for ensuring brand safety, is likely to defend its actions. The outcome of the case could have far-reaching implications for the relationship between social media platforms and advertisers.
