Elon Musk’s X Initiates Lawsuit Against Major Advertisers for Alleged Boycott

X is suing major companies for allegedly boycotting ads post-acquisition. The lawsuit claims companies conspired via the Global Alliance for Responsible Media (GARM) to withhold billions in revenue. X seeks treble damages citing U.S. antitrust violations due to the decrease in ad revenue following Musk’s takeover.

Elon Musk’s social media platform X, formerly Twitter, has initiated legal action against several major companies, alleging they engaged in a coordinated advertising boycott after Musk’s acquisition. According to reports, the companies targeted include Nestlé, Abbott Laboratories, Colgate, Lego, Pinterest, Tyson Foods, Shell, WFA, CVS Health, Mars, Ørsted, and Twitch.

Allegations of Conspiracy
The complaint was filed in a Texas court, accusing members of the Global Alliance for Responsible Media (GARM) of conspiring to withhold billions of dollars in advertising revenue from X. Reports indicate that the WFA, which managed GARM before its disbandment due to limited resources, plans to contest the lawsuit, claiming adherence to competition laws.

The Background of GARM
GARM was established in 2019 as a U.S.-based initiative intended to create uniform guidelines for identifying harmful content online. X was a member until GARM ceased operations, citing its inability to defend against previous lawsuits. The current lawsuit asserts that the WFA orchestrated an advertiser boycott through GARM to enforce compliance with its brand safety standards.

Impact of the Boycott
Reports suggest that at least 18 businesses ceased advertising on X during the final months of 2022, diminishing the platform’s competitiveness in digital advertising. According to the lawsuit, this boycott impaired X’s ability to compete for user engagement and advertising revenue.

Seeking Damages
The lawsuit follows a significant decline in X’s advertising revenue post-acquisition, driven by the departure of numerous advertisers. In light of these events, X is pursuing treble damages and injunctive relief, asserting violations of U.S. antitrust laws.

Elon Musk’s X is suing multiple advertisers over allegations of a coordinated boycott following his takeover. The lawsuit claims that major companies conspired to withhold advertising revenue through the now-defunct GARM, which aimed to enhance brand safety standards. The outcome of this lawsuit may have significant implications for the future of advertising on social media platforms.

Original Source: www.hindustantimes.com