Elon Musk’s X sues ad industry group over alleged advertising ‘boycott’

New York (CNN) — Elon Musk’s X has accused a group of major advertisers of antitrust violations in a new lawsuit claiming the group conspired to “boycott” advertising on the platform.

The lawsuit claims an influential ad industry group organized “to collectively withhold billions of dollars in advertising from Twitter” because the group was concerned that the platform had deviated from brand safety standards after Musk’s acquisition in late 2022.

The group is the Global Alliance for Responsible Media, also known as GARM, a voluntary ad-industry initiative run by the World Federation of Advertisers that aims to help brands avoid having their advertisements appear alongside illegal or harmful content.

GARM counts more than 100 prominent companies as members. Four of those companies — CVS, Unilever, Mars and the Danish energy company Ørsted — were also named as defendants in the lawsuit, which was filed in federal court in Texas Tuesday.

The lawsuit is the latest effort by X to revive its core ad business, which has tanked since Musk’s takeover. Many brands have pulled their spending over concerns that their ads might run alongside misinformation or hate speech, which Musk himself has occasionally promoted. The suit also continues Musk’s habit of feuding with the advertisers whose money he relies on; last year, he told brands who had left the platform to “go f**k yourself.”

X leaders have alternately portrayed the platform’s ad business as recovering, then struggling, then recovering again. But X CEO Linda Yaccarino painted a dire picture in a video posted to the platform Monday. “They conspired to boycott X, which threatens our ability to thrive in the future,” she said of the GARM members, adding that the loss in advertising dollars placed the company “at long-term risk.”

GARM did not immediately respond to a request for comment on the suit.

GARM members “agree to adopt, implement, and enforce GARM’s brand safety standards, including by withholding advertising from social media platforms deemed by GARM to be non-compliant with the brand safety standards,” the lawsuit states. After GARM publicly called on X, then known as Twitter, to comply with its brand safety standards after Musk’s takeover, many GARM-affiliated companies “abruptly discontinued or sharply curtailed their purchases of advertising,” the suit alleges.

However, GARM notes on its website that it “does not interfere with a member’s decision as to whether or not to invest advertising resources on a particular website or channel.”

The lawsuit seeks to prevent GARM from continuing to make recommendations regarding advertising on X, as well as unspecified monetary damages.

It’s not the first time X has filed a lawsuit related to its declining ad business. Last year, it sued the Center for Countering Digital Hate, alleging the nonprofit group violated its terms of service when it studied, and then wrote about, hate speech on the platform and blamed it for driving away advertisers. A federal judge tossed the suit in March, blasting it as an attempt to punish CCDH for protected speech.

X also sued the progressive watchdog group Media Matters over its analysis highlighting antisemitic and pro-Nazi content on X — a report that appeared to play a significant role in a massive and damaging brand revolt late last year. The suit accuses Media Matters of distorting how likely it is for ads to appear beside extremist content on X. Media Matters President Angelo Carusone called the filing a “frivolous lawsuit.” The case is set to go to trial next year.

The-CNN-Wire
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