X, formerly known as Twitter, has expanded its antitrust lawsuit, targeting major advertisers such as Lego, Nestlรฉ, and Pinterest. The lawsuit alleges a “systematic illegal boycott” that has harmed the platformโs advertising revenue.
The legal battle began in August 2024 when X sued the World Federation of Advertisers (WFA) and its brand safety initiative, the Global Alliance of Responsible Media (GARM). X claims that these organisations coordinated to pressure advertisers to pull their spending from the platform.
Following the initial lawsuit, WFA announced the discontinuation of GARM, stating that allegations against the initiative had “misconstrued its purpose and activities.” The organisationโs CEO reassured members that it would fight the lawsuit and prove compliance with competition laws.
More advertisers added to the lawsuit
X has now extended the complaint to include additional high-profile advertisers, including Abbott Laboratories, Colgate, Tyson Foods, and Shell, as initially reported by Business Insider. The lawsuit claims that WFA, through GARM, orchestrated a boycott to pressure X into adhering to specific brand safety standards. According to the filing, at least 18 GARM-affiliated advertisers stopped buying ads on X between November and December 2022, while others significantly reduced their spending.
โThe majority of Xโs advertising revenue today comes from small- and medium-sized businesses that are not GARM members or clients of GARM-member advertising agencies,โ the complaint states. It further argues that demand for advertising on X has declined due to the boycott, leading to reduced ad prices compared to social media advertising market competitors.
Challenges for Xโs business model
Beyond the lawsuit, Xโs leadership has expressed concerns about the companyโs financial health. In January, owner Elon Musk reportedly told employees, “User growth is stagnant, revenue is unimpressive, and weโre barely breaking even.โ
The outcome of the lawsuit could have significant implications for Xโs future. The platform struggles to regain lost advertising revenue while facing increasing competition in the digital advertising space.
