Elon Musk sues Unilever and Mars over X ‘boycott’
Elon Musk’s X/Twitter is suing a group of advertisers and major companies, accusing them of unlawfully agreeing to “boycott” the site. It has filed a claim against the food giants Unilever and Mars, private healthcare company CVS Health, and renewable energy firm Orsted – along with a trade association called the World Federation of Advertisers (WFA) – in a Texas court. X claims they have deprived it of “billions of dollars” in revenue.
Legal experts say the case is unlikely to succeed as any collusion or agreement between companies will be hard to prove.
The lawsuit relates to the period in 2022 just after Mr Musk bought X, then known as Twitter, when advertising revenue dived. Some companies had been wary of advertising on the platform as concerns rose that its new owner was not serious enough about removing harmful online content. In the year after Mr Musk bought what was formerly Twitter, advertising revenue slumped by more than half. X chief executive Linda Yaccarino said: “People are hurt when the marketplace of ideas is constricted. No small group of people should monopolise what gets monetised.”
She said the alleged “boycott” threatened the company’s “ability to thrive in the future”.
Mr Musk tweeted: “We tried being nice for 2 years and got nothing but empty words. Now, it is war.” The WFA and the accused companies have not responded to requests for comment.
Legal experts have suggested the case is unlikely to succeed. “As a general rule, a politically motivated boycott is not an antitrust violation. It is protected speech under our First Amendment,” said Bill Baer, who was assistant attorney general for the Department of Justice’s antitrust division under former US president Barack Obama.
Christine Bartholomew, an antitrust expert and professor at University at Buffalo’s law school said X needed to show there was an “actual agreement to boycott joined by each advertiser”, which she said would be “no small hurdle” to prove. Even if the case succeeds, the social media site cannot force companies to buy advertising space on the platform.
X is seeking unspecified damages and a court order against any continued efforts to conspire to withhold advertising spending. ‘The challenge of illegal or harmful content’
In its lawsuit, X alleges that the accused firms unfairly withheld spending by following safety standards set out by a WFA initiative called Global Alliance for Responsible Media (Garm).
Garm’s stated aim is to “help the industry address the challenge of illegal or harmful content on digital media platforms and its monetisation via advertising”.
By doing this, X claims the companies acted against their own economic self-interests in a conspiracy against the platform that breached US antitrust, or competition, law.
Professor Rebecca Haw Allensworth, of Vanderbilt University, said the boycott “was really trying to make a statement about X’s policies and about their brands”.
“That’s protected by the First Amendment,” she said.
X said in its lawsuit that it has applied brand-safety standards that are comparable to those of its competitors and “meet or exceed” those specified by Garm.
It also said X has become a “less effective competitor” in the sale of digital advertising.
The video-sharing company Rumble, which is favoured by right-wing influencers, made similar claims in a separate lawsuit against the World Federation of Advertisers on Tuesday.
