Advertisers hit back at Elon Musk's 'ad boycott' lawsuit, saying X disrupted its own business and 'alienated' customers
The advertisers and trade group targeted by an antitrust lawsuit from Elon Musk's X have hit back against its claims that they colluded to form an illegal boycott of the platform.
X is suing several major brands, including Mars, Lego, Nestlé, and Shell, alleging their participation in an ad industry initiative called the Global Alliance of Responsible Media, GARM, was tantamount to a conspiracy to "collectively withhold billions of dollars in advertising" from X after Musk's takeover of the company, then known as Twitter.
X had claimed the alleged boycott resulted in it becoming "a less effective competitor to other social media platforms in the sale of digital advertising and in competing for user engagement on its platform."
In a joint motion filed on Wednesday seeking to dismiss the case, the defendants said the lawsuit was instead "an attempt to use the courthouse to win back the business X lost in the free market when it disrupted its own business and alienated many of its customers."
Founded in 2019, GARM was an initiative of the advertiser trade body The World Federation of Advertisers that aimed to provide the industry with a common language and frameworks to help categorize the kind of content that advertisers tend to want to avoid.
The categories ranged from obviously harmful content like child sex-abuse imagery, to content like violence, which different sorts of advertisers have varying risk appetites toward. The uptake of these frameworks was voluntary. X was previously itself a GARM member.
"None of the membership materials refers to boycotts, the exclusion of competitors, or the disclosure of competitively sensitive information," the WFA and advertiser defendants said in Wednesday's filing.
GARM discontinued operations after X filed its initial lawsuit last summer, saying the two-person operation lacked the resources to fight it. GARM's parent, the WFA, is still operating and remains a defendant in the case.
In Wednesday's filing, the WFA and the group of brands rejected the accusations of a conspiracy and said that advertisers — including non-GARM members —made their own individual decisions about pulling ad spend from X. It noted that X's own lawsuit said just 18 of GARM's more than 100 members stopped advertising on the platform.
X's advertising revenue had plummeted after Musk took control of Twitter in 2022. Under his leadership, the company fired reams of staff who had been responsible for areas like brand and platform safety, loosened content moderation rules, and brought back controversial banned accounts.
Some of X's original legal argument was built on a prior probe from the House Judiciary Committee, led by its Republican chairman Jim Jordan. The committee published an investigation last summer that alleged GARM and its members colluded to boycott platforms, podcasts, news outlets, and other conservative-leaning media content they disfavored.
The WFA and the advertiser defendants said in the latest filing that even if marketers had chosen to stay away from X for political reasons, this would be protected by the First Amendment as an act of free speech and wouldn't be within the scope of antitrust law.
The WFA and some of the advertiser defendants — many of which are headquartered outside of the US — are also seeking to dismiss the case, which was filed in a Texas court, for lack of proper jurisdiction.
The WFA declined to comment. X and the advertiser defendants — Mars, CVS Health, Ørsted, Nestlé, Abbott Laboratories, Colgate-Palmoliver, Lego, Pinterest, Tyson Foods, and Shell — didn't immediately respond to requests for comment.
This month, X dropped its claims against the video platform Twitch, which was also previously a defendant in the case. X's court filing didn't state a reason, but the dismissal was brought "without prejudice," which means X could potentially sue Twitch again over the ad-boycott dispute. Last month, X had told the judge presiding over the case that the two companies had reached an agreement for the claims to be dropped if Twitch met conditions, which it didn't detail, this year.
Unilever was also initially named as a defendant in the original lawsuit, but reached an agreement with X and was dropped from the suit in October.
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