In a new move, it has been revealed that X has added several major brands to a massive lawsuit alleging that an advertising industry group illegally conspired to boycott the social media platform after it was purchased by billionaire Elon Musk.
It is worth mentioning that the advertising industry worldwide is one of the most important and continues to consolidate as a fundamental pillar of the economy, with constant growth driven by digitalization, technological innovation, and evolving consumer habits. According to data from Statista and GroupM, the global advertising market is estimated to reach a value of $1.1 trillion by 2025, reflecting a significant increase compared to previous years.
What does the lawsuit say?
According to reports, the company formerly known as Twitter added Nestlé, Colgate-Palmolive, Tyson Foods, Shell, Pinterest, Lego, and Abbott Laboratories to its lawsuit on Saturday, alleging that they participated in a boycott of X coordinated by the World Federation of Advertisers (WFA), which violated antitrust laws.
According to information from The Wall Street Journal, these are just some of the brands that X claims joined forces to withdraw their advertising after Musk purchased the company in 2022 and vowed to remove content restrictions in an effort to preserve free speech.
It is worth noting that shortly after the Tesla CEO began reviewing the platform, the Global Alliance for Responsible Media (GARM), a WFA initiative to keep brand ads away from harmful content on poorly regulated websites, expressed concerns to its member companies that X would not be able to meet its safety standards.
That communication sparked a “massive advertiser boycott that followed,” X’s lawsuit claimed.
The issues with advertisers began shortly after Musk bought the social media company. By 2023, its advertising revenue had plummeted as major players like Amazon started pulling their placements.
Other companies previously mentioned in the lawsuit include CVS, Amazon-owned social media company Twitch, CVS Health, Mars, and Danish electric company Orsted.
Unilever was also mentioned in the lawsuit but was removed after reaching a settlement with X.
When advertisers abandoned the platform following his acquisition, Musk bluntly stated that companies avoiding X could “go f*** themselves.”
X filed its lawsuit in August 2024, and days later, WFA shut down the GARM initiative.
Additionally, some companies have returned to X since Musk made his way into former President Trump’s inner circle. Amazon, for example, has been increasing its advertising presence on the platform, according to the Journal.
WFA has previously stated that X’s lawsuit misunderstands the organization’s purpose and has left it financially devastated.
“GARM is a small, non-profit initiative, and the recent allegations that unfortunately misinterpret its purpose and activities have caused a distraction and have significantly drained its resources and finances,” the group said after dissolving GARM.
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