Elon Musk's social media platform, X (formerly known as Twitter), filed a lawsuit in Texas on Tuesday against the World Federation of Advertisers and four member companies. (AFP/Getty Images/CBC News)
Elon Musk's social media platform, X, has filed a lawsuit against several advertisers, claiming a "massive advertiser boycott" led to billions of dollars in lost revenue and violated antitrust laws.
Previously known as Twitter, the company initiated the lawsuit on Tuesday in a federal court in Texas. The defendants include the World Federation of Advertisers (WFA) and its member companies Unilever, Mars, CVS Health, and Orsted.
The lawsuit alleges that the WFA's brand safety initiative, the Global Alliance for Responsible Media, coordinated a pause in advertising following Musk's $44 billion acquisition of Twitter in late 2022. After the acquisition, Musk made significant changes to the platform's staff and policies.
Musk commented on the lawsuit on X, stating, “Now it is war” after two years of attempting to negotiate, which he claims yielded "nothing but empty words."
X CEO Linda Yaccarino, in a video announcement, attributed the lawsuit partly to evidence uncovered by the U.S. House Judiciary Committee. She claimed this evidence showed a "systematic illegal boycott" orchestrated by a group of companies against X.
Last month, the Republican-led committee held a hearing to evaluate whether current laws are sufficient to prevent anticompetitive collusion in online advertising.
The lawsuit focuses on the initial period following Musk's takeover of Twitter, not a more recent conflict with advertisers that occurred a year later.
In November 2023, about a year after Musk's acquisition, several advertisers began to withdraw from X. They were concerned about their ads appearing next to pro-Nazi content and general hate speech on the platform. Musk exacerbated the situation with his own posts endorsing an antisemitic conspiracy theory.
Musk later accused the departing advertisers of "blackmail" and used profanity to tell them to leave.
Representatives from the Belgium-based World Federation of Advertisers, as well as CVS, Orsted, Mars, and Unilever, did not immediately respond to requests for comment on Tuesday.
During last month's congressional hearing, a top Unilever executive defended the company’s advertising practices, emphasizing their commitment to placing ads only on platforms that align with their brand values.
“Unilever, and Unilever alone, controls our advertising spending,” said Herrish Patel, president of Unilever USA, in his prepared statement. “No platform has a right to our advertising dollar.”
