X, Owned by Elon Musk, Brings Antitrust Suit Accusing Advertisers of a Boycott
The New York Times
The company claimed that members of the Global Alliance for Responsible Media coordinated to dissuade brands from advertising on X.
X filed a lawsuit on Tuesday against the Global Alliance for Responsible Media, a coalition of major advertisers, claiming that it had violated antitrust laws by coordinating with brands to dissuade them from spending money on the social media platform.
The suit, filed in federal court in Texas, claims that the coalition, known as GARM, “conspired” with leading brands, including CVS, Unilever, Mars and the Danish energy company Orsted, to “collectively withhold billions of dollars in advertising revenue” that were owed to X, then known as Twitter, in the wake of Elon Musk’s takeover of the social media company in 2022.
“The illegal behavior of these organizations and their executives cost X billions of dollars,” wrote Linda Yaccarino, X’s chief executive, in an open letter to advertisers. “People are hurt when the marketplace of ideas is undermined and some viewpoints are not funded over others as part of an illegal boycott.”
With the lawsuit, X effectively declared war on advertisers, which provide the bulk of the social media company’s revenue. Since Mr. Musk acquired the company and promised to usher in a new era of unfettered free speech, many advertisers have limited their spending on X, concerned by reports of rising hate speech and misinformation there. By pursuing legal action against GARM, Mr. Musk continued to break with the leaders of other social media companies, who have forged close relationships with advertisers and been responsive to their concerns about offensive online content.
“We tried being nice for 2 years and got nothing but empty words,” Mr. Musk wrote Tuesday in a post on X. “Now, it is war.” He added in a separate post that he encouraged any company that faced a boycott to file a lawsuit.
“To the extent that Elon hadn’t already burned all bridges and ties with the entire advertising community, I don’t see how this will get any advertisers to come back to X,” said Ruben Schreurs, the chief strategy officer at Ebiquity, a marketing and media consulting firm. “It’s a last-ditch effort to force brands who don’t want to be in the cross hairs of this kind of legal action to return to the platform.”
