Musk’s X Sues Group Over Ad Boycott That Cost Billions (1)

Elon Musk’s X Corp. filed a lawsuit accusing an industry group of violating antitrust laws for an advertising boycott that cost the social media company billions of dollars.

The lawsuit, filed Tuesday in federal court in Texas, claims the Global Alliance for Responsible Media coordinated the boycott by advertisers in 2022 under the guise of concern about whether X, formerly known as Twitter, would adhere to certain “brand safety” standards for content on the platform after Musk acquired it for $44 billion.

“To put it simply, people are hurt when the marketplace of ideas is undermined and some viewpoints are not funded over others as part of an illegal boycott,” X Chief Executive Officer Linda Yaccarino said in a post on the platform. “This behavior is a stain on a great industry, and cannot be allowed to continue.”

WATCH: Bloomberg’s Kurt Wagner reports on Elon Musk’s social platform X filing a lawsuit accusing an industry group of violating antitrust laws for an advertising boycott.

Source: Bloomberg

Outcry over unchecked antisemitic content and commentary on X — some of it endorsed by Musk — sparked many big advertisers including Apple Inc. and Walt Disney Co. to pull adds from the platform. And Musk has opposed government efforts to control toxic posts on social media.

Read More: Elon Musk’s Pile of Lawsuits Runs From Autopilot to Toxic Speech

The lawsuit by X comes as House Republicans and conservative media outlets have ramped up scrutiny of GARM, which counts among its more than 100 members advertisers including Procter & Gamble Co. and Unilever Plc.

GOP lawmakers have accused the group of violating antitrust laws, and the lawsuit cites a July report from the House Judiciary Committee accusing GARM of depriving conservative media outlets of ad revenue from its members.

GARM didn’t immediately return a request for comment.

In its 2022 annual report, the industry group said it had helped establish common definitions, metrics and tools to aid brands and their advertising partners in ensuring their ads don’t appear alongside content they may find problematic.

In its lawsuit, X claimed the group’s actions represent a “naked restraint of trade.”

“Collective action among competing advertisers to dictate brand safety standards to be applied by social media platforms shortcuts the competitive process and allows the collective views of a group of advertisers with market power to override the interest of consumers,” X said in its complaint.

Read More: Musk’s X Sues Media Matters Over Link to Pro-Nazi Content

Musk, the world’s richest person, is a self-proclaimed champion of free speech on his social-media platform and has pursued other legal challenges connected to allegations of lax moderation of toxic posts, though with mixed success.

Rumble, a video sharing platform, said it would file a lawsuit of its own against GARM and the World Federation of Advertisers in Texas federal court that raises the same allegations as X.

The case is X v. World Federation of Advertisers, 7:24-cv-00114, US District Court, Northern District of Texas (Wichita Falls).

(Updates throughout with details from lawsuit and dispute)

--With assistance from Alicia Clanton.

To contact the reporter on this story:
Madlin Mekelburg in Austin at mmekelburg@bloomberg.net

To contact the editors responsible for this story:
Misyrlena Egkolfopoulou at megkolfopoul@bloomberg.net

Steve Stroth, Peter Blumberg

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