X, the platform formerly known as Twitter, has expanded its antitrust lawsuit, now targeting more advertisers and industry groups. CEO Linda Yaccarino has described this as part of a “systematic illegal boycott” aimed at undermining the company’s advertising revenue. This legal action, initially filed in 2024, now includes an even broader list of companies accused of conspiring to harm X financially.
Background of the Lawsuit
The legal battle began in August 2024 when X filed a lawsuit against the World Federation of Advertisers (WFA) and the Global Alliance for Responsible Media (GARM). X claims that GARM, an industry group focused on brand safety, helped organize a boycott among major advertisers to withhold billions of dollars in advertising revenue.
The lawsuit named several prominent companies, including CVS, Mars, Ørsted, and Twitch, accusing them of trying to force X into adhering to GARM’s advertising standards. These standards are designed to ensure that ads are placed in safe and appropriate environments for brands.
GARM Disbanded Amid Legal Pressure
Shortly after the lawsuit was filed, the WFA decided to shut down GARM. The organization argued that the allegations misunderstood its role and activities. Despite the closure, the WFA announced its intention to fight the lawsuit and maintain its compliance with competition laws.
X responded by adding new defendants to the suit, including Twitch, and has now extended the complaint further. The updated lawsuit, reported by Business Insider, now includes major corporations like Nestlé, Abbott Laboratories, Colgate, Lego, Pinterest, Tyson Foods, and Shell.
Claims of Boycott and Financial Harm
X’s lawsuit accuses the WFA and its affiliates of orchestrating a coordinated effort to boycott the platform and pressure it to adopt GARM’s brand safety standards. The company claims that this boycott significantly impacted its advertising revenue, with at least 18 GARM-affiliated advertisers halting their ad purchases between November and December 2022. Others reduced their ad spending during the same period.
“The majority of X’s advertising revenue now comes from small- and medium-sized businesses, not from GARM members or their advertising agencies,” the lawsuit states. It argues that the boycott diminished demand for ads on X, causing a decline in ad prices compared to competitors.
Furthermore, the lawsuit suggests that advertisers who participated in the boycott missed out on cost-effective opportunities to advertise on X, a platform that claims its brand safety measures are in line with, or better than, industry standards.
Impact on X’s Business Performance
The financial fallout from the boycott has been severe. X’s owner, Elon Musk, reportedly admitted to employees in January that the platform’s growth is stagnant, its revenue remains underwhelming, and it is struggling to break even.
In its legal filing, X argues that the collective actions of these advertisers disrupted the market and created an unfair competitive environment. Musk’s legal team asserts that social media platforms should have the freedom to set their own brand safety standards, which would better serve their platforms and users.
“Collective actions among competing advertisers to impose brand safety standards undermine the competitive process and allow advertisers to prioritize their interests over those of consumers,” the complaint claims.
Changes to X Under Musk’s Ownership
Since Musk took control of Twitter in 2022 and rebranded it as X, the platform has undergone drastic changes. Musk made significant staff cuts, including those responsible for content moderation, and allowed the reinstatement of controversial accounts, such as that of former President Donald Trump.
These changes have strained X’s relationships with advertisers, many of whom have expressed concerns over the platform’s new content moderation policies and brand safety practices. In response, Yaccarino addressed advertisers in an open letter, acknowledging their concerns and the challenges X has faced in trying to restore trust.
Ongoing Challenges and Legal Implications
The lawsuit further alleges that WFA members celebrated when X failed to meet its expected revenue targets. Despite implementing brand safety standards that reportedly align with GARM’s, X claims that the boycott continues to hurt its revenue.
X’s legal team has emphasized that social media platforms should be allowed to set their own rules without interference from advertiser-led actions. They argue that such practices distort market competition and harm both platforms and users.
What’s Next for X?
The outcome of this lawsuit could have significant consequences for the advertising industry, particularly in how social media platforms and advertisers interact. If X prevails, it could challenge the role of industry groups like GARM in setting advertising standards.
Meanwhile, X is still struggling with its ad revenue and adjusting to a changing business landscape. The platform’s ability to regain advertiser trust and compete with its rivals remains uncertain under Musk’s leadership.