Where did this X lawsuit come from? Elon Musk sues global advertising alliance and several major companies, including Mars and CVS Health, accusing them of unlawfully conspiring to boycott the site and causing it to lose revenue.
Why did Elon Musk sue advertisers?
X filed the lawsuit in federal court in Texas against the World Federation of Advertisers, Unilever and Danish renewable energy company Orsted, in addition to Mars and CVS Health.
The lawsuit said advertisers, acting through a World Federation of Advertisers initiative called Global Alliance for Responsible Media, collectively withheld “billions of dollars in advertising revenue” from X, previously known as Twitter.
It said they acted against their own economic self-interests in a conspiracy against the platform that violated U.S. antitrust law.
The World Federation of Advertisers, Unilever, Mars, CVS Health and Orsted did not immediately respond to requests for comment.
In a statement on Tuesday about the lawsuit, X’s chief executive Linda Yaccarino said “people are hurt when the marketplace of ideas is constricted. No small group of people should monopolize what gets monetized.”
Elon Musk sues advertisers connected to the World Federation of Advertisers, including prominent names like Mars and CVS Health. The lawsuit, filed in Texas federal court, targets not only these corporations but also Unilever and the Danish renewable energy company Orsted. The core of the issue, as detailed in the court documents, is the alleged collusion among these companies to boycott X, previously known as Twitter, purportedly costing the platform billions in advertising revenue.
This collective action, coordinated through the Global Alliance for Responsible Media—a World Federation of Advertisers initiative—stands accused of not only violating U.S. antitrust laws but also acting against the companies’ economic self-interest. This strategic legal action, where Elon Musk sues advertisers, raises significant questions about the dynamics within the advertising industry and the extent of influence large advertisers can wield over social media platforms.
As of now, responses from the World Federation of Advertisers, Unilever, Mars, CVS Health, and Orsted remain pending. However, Linda Yaccarino, X’s CEO, made a strong statement regarding the lawsuit, highlighting the broader implications of the case. This legal challenge where Elon Musk sues advertisers marks a significant moment in the ongoing tension between large tech platforms and the global advertising community.
Back story of the Rumble lawsuit
The right-wing video site Rumble, founded more than 10 years ago as an alternative to YouTube and positioned as a platform “immune to cancel culture,” announced on Tuesday that it had filed a similar lawsuit.
The US House Judiciary Committee, which is controlled by Republicans and has expressed concern about censorship of right-wing views on social media, has been investigating GARM. In a preliminary report in July, the committee found that “the extent to which GARM has organized its trade association and coordinates actions that rob consumers of choices is likely illegal under the antitrust laws and threatens fundamental American freedoms.” X’s lawsuit draws heavily from internal GARM emails reviewed by the congressional panel.
Rumble, a right-leaning video platform established over a decade ago as a YouTube alternative and champion of being “immune to cancel culture,” also announced a lawsuit echoing similar grievances. This legal move came on the heels of an investigation by the US House Judiciary Committee, which is currently under Republican control and has been vocal about concerns regarding the censorship of conservative perspectives on social media platforms.
The committee’s investigation into the Global Alliance for Responsible Media (GARM) culminated in a preliminary report released in July. This report criticized GARM’s organizational practices, suggesting they not only likely violate U.S. antitrust laws but also impinge on fundamental American freedoms by limiting consumer choice. Rumble’s legal action draws parallels to the lawsuit where Elon Musk sues advertisers, as both challenge the alleged coordinated actions of major advertisers under the GARM umbrella.
X CEO Linda Yaccarino shared a video
In a striking address to X users, CEO Linda Yaccarino shared her astonishment over the findings of the House Judiciary Committee, describing a “systematic illegal boycott against X.” Her video statement, which was direct and forceful, highlighted the implications for free speech, stating that the actions of these advertisers were an assault not just on the company but also on its users, whom she depicted as residents of a “global town square.” Yaccarino’s words, “People are hurt when the marketplace of ideas is constricted,” resonate as a rallying cry for those who feel marginalized by mainstream media channels and advertising giants.
A Message to X Users pic.twitter.com/6bZOYPhWVa
— Linda Yaccarino (@lindayaX) August 6, 2024
Global Alliance for Responsible Media (GARM) has no response yet
The Brussels-based World Federation of Advertisers, the governing body of GARM, has yet to issue a response regarding the ongoing lawsuits against them. These legal challenges, spearheaded by X and echoed by Rumble, mark a significant turn in how advertisers interact with social media platforms. X’s lawsuit, which implicates major corporations like Unilever, Mars, CVS, and a Danish energy company, along with Rumble’s addition of the ad agency WPP, underscores a broader discontent with the current state of content sponsorship and moderation.
Historically, advertisers negotiated directly with social media platforms to delineate the types of content they would support. However, under GARM’s influence, these companies have consolidated their influence, setting industry-wide content moderation standards and enforcing them collectively. X argues that GARM’s role has expanded excessively, giving it undue control over what content is permissible on social media platforms, potentially stifling diversity in the digital discourse.
Musk to interview Trump
In a related development, X’s separate lawsuit against Media Matters is slated for trial in April 2025. By the way former President Donald Trump announced that he will be interviewed by Elon Musk on Monday night. Trump’s upcoming dialogue with Musk follows recent revelations about a political action committee supporting Trump, purportedly established by Musk, which is now under investigation. The North Carolina Board of Elections and the Attorney General’s Office, along with Michigan’s secretary of state, are examining the America PAC after allegations surfaced regarding the mishandling of personal data and voter registration issues.
Who is World Federation of Advertisers (WFA)?
The World Federation of Advertisers is a global organization that represents the interests of marketers and advertisers across more than 60 national advertiser associations on six continents. Founded in 1953, the WFA has a long history of advocating for effective and sustainable marketing communications.
Featured image credit: Kerem Gülen/Midjourney
