X Expands Lawsuit Over Boycott Allegations To Include More Brands

X, formerly Twitter, expands its legal battle against major brands over an alleged advertising boycott, accusing them of antitrust violations.

Quick Takes

X has expanded its lawsuit to include major brands like Nestlé, Colgate-Palmolive, and Shell.
The lawsuit alleges an illegal boycott led by the World Federation of Advertisers (WFA).
X claims the boycott has caused a significant decline in its advertising revenues.
The legal action follows Elon Musk’s acquisition and push for relaxed content guidelines.
Some companies, like Unilever, have reached settlements with X.

X Expands Lawsuit Against Major Advertisers

X, the platform formerly known as Twitter, has intensified its legal offensive against prominent brands, expanding its lawsuit to include household names such as Nestlé, Colgate-Palmolive, and Shell. This aggressive move comes as part of X’s ongoing battle against what it claims is a “systematic illegal boycott” orchestrated by the World Federation of Advertisers (WFA). The lawsuit, initially filed in August 2024, has now grown to encompass a wider array of companies, including Twitch, Abbott Laboratories, Lego, Pinterest, and Tyson Foods.

The core of X’s complaint alleges that the WFA, through its Global Alliance of Responsible Media (GARM) initiative, organized an advertiser boycott to force compliance with GARM Brand Safety Standards. This action, according to X, violates antitrust legislation and has led to a sharp decline in the platform’s advertising revenues. The lawsuit claims that at least 18 GARM-affiliated advertisers either stopped or significantly reduced their ad purchases on Twitter between November and December 2022.

X expands lawsuit over advertiser ‘boycott’ to include Lego, Nestlé, Pinterest, and others https://t.co/pnqOSPdMuH

— TechCrunch (@TechCrunch) February 1, 2025

Impact on X’s Business Model

The platform now argues that its advertising revenue primarily comes from small- and medium-sized businesses not affiliated with GARM. This shift represents a significant change in X’s advertiser base and potentially its overall revenue structure. The lawsuit argues that ad prices on X are lower than competitors, suggesting that boycotting advertisers are missing out on valuable opportunities.

Musk is reported to have told employees last month that “user growth is stagnant, revenue is unimpressive, and we’re barely breaking even.”

This stark assessment from Musk himself indicates financial challenges are facing X. The platform’s struggles have reportedly been contributed to by the departure of major advertisers like Amazon, although some have since returned as Musk’s influence in political circles has grown.

The Origins of the Conflict

The roots of this conflict can be traced back to Elon Musk’s acquisition of Twitter in 2022. Musk’s promise to reduce content restrictions in favor of promoting free speech raised concerns among advertisers about brand safety. The Global Alliance for Responsible Media (GARM), an initiative of the WFA, questioned X’s ability to meet safety standards. This allegedly led to the “massive advertiser boycott.”

In response to the lawsuit, the WFA has taken drastic measures. The organization discontinued GARM, citing the legal action as a distraction and a drain on resources. However, the WFA maintains that the lawsuit misrepresents its purpose and has vowed to fight the allegations. The disbandment of GARM marks a significant development in this ongoing legal battle, potentially reshaping the landscape of digital advertising standards.

The Road Ahead for X and Advertisers

As this legal battle unfolds, the future of advertising collaborations on X remains uncertain. The platform’s aggressive stance against major brands and industry organizations could have far-reaching implications for digital advertising practices and content moderation policies across social media platforms. While some companies, like Unilever, have negotiated settlements with X, many others now find themselves embroiled in this high-stakes legal confrontation.

The outcome of this lawsuit could potentially redefine the relationship between social media platforms and advertisers, setting new precedents for how brand safety concerns are balanced against free speech principles in the digital age. As X continues its legal pursuit, the advertising industry and free speech advocates alike will be watching closely to see how this conflict reshapes the digital advertising landscape.