X Adds Brands To Lawsuit Alleging Illegal Boycott

X, once known as Twitter, broadens its legal confrontation by targeting major brands for an alleged unlawful ad boycott after Elon Musk’s acquisition.

Key Insights

X, formerly Twitter, is suing advertisers in a lawsuit over an alleged illegal boycott.
Nestlé, Colgate-Palmolive, and Shell are implicated in the expanding lawsuit.
The World Federation of Advertisers allegedly initiated the boycott post-Musk’s takeover.
X’s ad revenue suffered due to this alleged boycott, with many brands reconsidering ad strategies.

X’s Legal Allegations and Advertiser Involvement

X, previously known as Twitter, has expanded its lawsuit, initially filed in August, to accuse several big brands of partaking in an illegal ad boycott. Brands added to this lawsuit include Nestlé, Colgate-Palmolive, and Shell. This action comes after accusations that the World Federation of Advertisers orchestrated a systematic pullback from advertising with X following Elon Musk’s changes in content governance. This lawsuit suggests an antitrust breach that impacted X’s ad revenue.

Initially, this lawsuit was centered on the World Federation of Advertisers and the Global Alliance of Responsible Media. The claims are rooted in the assertion that these organizations directed an advertiser boycott against X, allegedly to ensure compliance with specific brand safety standards. In response to this lawsuit, the WFA disbanded GARM due to the lawsuit consuming resources, although they indicated they intended to resist the suit vigorously.

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 Advertising Strategy and Revenue

At least 18 GARM-affiliated advertisers allegedly reduced their presence on X. This attrition resulted in X’s advertising revenue largely coming from smaller businesses not aligned with GARM, according to the lawsuit. Furthermore, ad prices on X are reportedly lower than on other platforms, implying missed opportunities for the boycotting advertisers. Elon Musk expressed concern over the platform’s stalled growth and mediocre earnings, highlighting the pressure on X to adapt and thrive amid these challenges.

Major brands like Unilever once involved, reached a separate settlement with X, indicating potential paths for resolution for these disputes. Meanwhile, some companies like Amazon have reportedly started returning to the platform, as Musk gains traction with influential circles, underscoring the evolving landscape of X’s advertising partnerships.

The Continuing Influence of the Lawsuit on X

This lawsuit, stemming from perceived efforts to undermine X through coordinated ad withdrawals, continues to redefine the business strategies for both X and its advertisers. These legal measures highlight the broader implications of X’s shift in content moderation, ushering a period of significant reevaluation among major advertisers. Furthermore, it underscores challenges related to antitrust concerns and free speech versus brand safety debates.

This case’s outcome may set precedents affecting future corporate collaborations on social media platforms. The ongoing legal fight reflects a critical phase for both Musk and X, amid complex intersections of business interests, regulations, and evolving content platforms.