X sues industry body over an alleged advertising boycott

Elon Musk’s X has accused a group of major advertisers in a new lawsuit claiming the group has conspired to 'boycott' advertising on the platform.

The group is the Global Alliance for Responsible Media (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.

According to reports, the lawsuit claims that the influential ad industry group organised “to collectively withhold billions of dollars in advertising from Twitter” because they were concerned that the platform had deviated from brand safety standards after Musk took over in late 2022.

The GARM consists of over 100 major advertisers like CVS, Unilever, Mars and the Danish energy etc.

Musk even took to X to say that they have tried to bring back advertisers for two now but "now it is war."

X' CEO Linda Yaccarino also published an open letter to advertisers announcing the company's legal action against the group of advertisers.

"The U.S. House of Representatives Judiciary Committee’s report entitled GARM’s (Global Alliance for Responsible Media) Harm last month disclosed that their investigation had found evidence of an illegal boycott against many companies, including X."

"This behaviour is a stain on a great industry, and cannot be allowed to continue," says the letter. "The illegal behavior of these organizations and their executives cost X billions of dollars. Since arriving at X, I made it my mission to continue to build a platform where people, brands and advertisers can thrive in our unique, dynamic and safe environment. And because of this commitment to our users, even despite the boycott, usage has reached all time highs. Using a Twitter legacy metric, user active minutes, in August 2022, people spent 7.2 billion active minutes on the platform. Today, that number is more than 9 billion, a 25% increase. The same is true for video - even compared to last year, daily video views are up 45% to 8.2 billion. X is innovating and growing," Yaccarino added.

Back in 2022 when Musk acquired the social media platform, many advertisers pulled their ads from X (then Twitter) over concerns that their ads might run alongside misinformation or hate speech. Since then, X has been trying to bring back advertisers to the platform.

A few months ago, at a public event Musk had even told that the advertisers who are boytcotting the platform can "Go F*** yourselves" and had even singled out Disney CEO Bob Iger for not running ads on X.

"What this advertising boycott is going to do is it’s going to kill the company. That is what everybody on Earth will know. We’ll be gone, and it’ll be gone because of an advertiser boycott," he had said.

According to various reports, X generated $1.48 billion in revenue in the first six months of 2023, a nearly 40% decline from the same period in 2022, before Musk’s $44 billion purchase. The company lost $456 million in ad revenue in the first three months of 2023.