Elon Musk's social media platform, X, has taken legal action against a global advertising alliance and several major companies, including Mars and CVS Health.
The lawsuit, filed in federal court in Texas, accuses these entities of unlawfully conspiring to boycott the platform, resulting in significant revenue losses.
The controversy stems from concerns over ad placements next to harmful content, particularly under Musk's ownership. Since Musk acquired the company in 2022, ad revenue at X has slumped, with some advertisers wary of their brands appearing alongside potentially damaging content.
Linda Yaccarino, X’s chief executive, emphasized the impact of this boycott, stating, “People are hurt when the marketplace of ideas is constricted. No small group of people should monopolize what gets monetized.”
The advertising group in question had launched a responsible media initiative in 2019 aimed at addressing illegal or harmful digital content. Despite this, advertisers grew cautious about their brands' association with the platform. The lawsuit claims that the defendants collectively withheld billions of dollars in advertising revenue from X, which was previously known as Twitter.
X argues that it has applied brand-safety standards comparable to those of its competitors and that these measures meet or exceed those specified by the Global Alliance for Responsible Media. The platform is seeking unspecified damages and a court order to prevent any continued efforts to conspire to withhold ad dollars.
Christine Bartholomew, an antitrust expert and professor at the University at Buffalo's law school, noted the challenges X faces in proving its case.
"Proving this requirement is no small hurdle," she said, referring to the need to show an actual agreement to boycott joined by each advertiser. Even if the case succeeds, Bartholomew pointed out that X cannot force companies to spend ad revenue on the platform.
The case has been assigned to U.S. District Judge Reed O'Connor in the Northern District of Texas, a jurisdiction known for being a favored destination for conservatives suing to block policies of the Biden administration.
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