X Sues Advertisers Over Antitrust Claims!

The Story: X, formerly known as Twitter, has filed a lawsuit against the Global Alliance for Responsible Media (GARM) and several major advertisers, alleging antitrust violations due to a coordinated boycott that has withheld billions in advertising revenue since Elon Musk's takeover. The claim involves prominent companies like Unilever, CVS, and Mars and accuses them of conspiring against X.

The Details:

• The lawsuit alleges that GARM organized an advertiser boycott, coercing brands to limit their spending on X in response to rising reports of hate speech and misinformation after Musk's acquisition.

• Advertisers including CVS, Unilever, and Mars have reportedly altogether stopped spending significantly, leading to a steep decline in X's revenue, down 53% year-over-year in Q2 2024.

• This legal action marks a dramatic shift for Musk, who previously attempted more amicable relations with advertisers, now declaring "war" on those who have boycotted the platform.

• Following the lawsuit, X seeks to establish that the advertisers’ actions threaten competition and consumer choice in the digital advertising landscape.

• In light of diminishing ad revenues, X has reportedly lowered its ad prices; despite this, advertisers have yet to return, raising questions about the effectiveness of the platform's strategy.

Why It Matters: This lawsuit represents a pivotal moment for X as it seeks to regain its footing in the advertising arena while challenging a coalition that many advertisers have found appealing. For creative professionals, the outcome could reshape how brands engage with social media platforms and redefine standards for content safety and responsibility in advertising. With major implications for the future of ad spending and online content management, it’s essential for industry professionals to pay attention to this evolving narrative.