Elon Musk has launched a significant offensive against advertisers, urging other companies to file lawsuits against those who have "systematically boycotted" them by withholding advertising dollars.
Musk made this announcement on X, following a lawsuit the social media company filed in a Texas federal court. The lawsuit accuses advertisers of violating antitrust laws by collectively boycotting X after Musk acquired it in 2022.
The complaint specifically mentions the World Federation of Advertisers and major companies like Unilever, Mars, CVS Health, and the Danish clean energy firm Orsted. X alleges these entities coordinated to withhold billions in advertising dollars, pressuring X to comply with certain content safety standards.
The federation and the named companies did not respond to requests for comments from Barron’s. The lawsuit claims they were involved in the Global Alliance for Responsible Media (GARM), an initiative aiming to remove harmful speech from social media platforms to ensure ads do not appear alongside such content. Since Musk's acquisition, advertisers have significantly reduced their spending on X.
Musk expressed his frustration over the loss of advertisers, stating on Tuesday, "We tried peace for 2 years, now it is war."
Linda Yaccarino, CEO of X, remarked that the boycott's purpose was to suppress X, arguing that an illegal boycott hurts people when certain viewpoints are unfunded over others.
According to the lawsuit, at least 18 GARM members stopped buying ads from November to December 2022. Yaccarino mentioned this action cost X billions of dollars, compelling the company to seek legal redress.
Musk is encouraging others to join this fight, suggesting there could be criminal implications under racketeering statutes.
On Tuesday, the alternative video-sharing platform Rumble announced its support for X, stating it would join the lawsuit against a cartel of advertisers and ad agencies accused of conspiring to block ad revenue from specific platforms and content creators.
Conservative voices have long claimed suppression on social media, leading to an investigation by the Republican-led House Judiciary Committee. Yaccarino’s statement referenced a July report by the committee, alleging GARM organized boycotts to target and "demonetize" disfavored platforms, limiting consumer choices.
Antitrust experts believe X faces an uphill battle. Christine Bartholomew, a law professor at the University at Buffalo Law School, told Barron’s that even if a boycott agreement is proven, calculating monetary damages is complex. Companies cannot be forced to buy ads on X, and suing them may not alter their future advertising decisions.
Sarah Kay Wiley, policy director at Check My Ads, a digital advertising watchdog, noted that Musk’s free speech argument regarding X as a global town square welcoming all viewpoints has a counterpoint.
“While platforms, including X, can choose which speech they want to host and amplify on their platform, advertisers also have their own First Amendment and free speech rights to not support it,” Wiley told Barron’s.
