X Adds Multiple Brands To Boycott Lawsuit

X, formerly known as Twitter, has escalated its legal battle against major brands, accusing a number of new brands of participating in an unlawful ad revenue boycott that has severely impacted the platform’s financial stability.

Key Takeaways

X expands its lawsuit to include major brands like Nestle, Colgate, and Shell, alleging antitrust violations.
The lawsuit claims the World Federation of Advertisers orchestrated a boycott through GARM to force compliance with brand safety standards.
X’s ad revenue reportedly declined significantly, with the platform relying primarily on small and medium-sized businesses when the lawsuit was filed.
The legal action follows Elon Musk’s acquisition of Twitter and his commitment to less stringent content regulations.
Some companies have settled or returned to advertising on X, while others continue to face legal action.

X Intensifies Legal Action Against Major Advertisers

Social media giant X has intensified its legal battle against major brands, expanding its lawsuit to include household names such as Nestle, Colgate-Palmolive, and Shell. The company, formerly known as Twitter, alleges these brands participated in an unlawful ad revenue boycott that has significantly impacted its financial performance. This latest development marks a significant escalation in the ongoing dispute between X and its former advertising partners.

The lawsuit, initially filed in August 2024 against the World Federation of Advertisers (WFA) and the Global Alliance of Responsible Media (GARM), now targets a broader range of companies. X claims that the WFA orchestrated a boycott through GARM to force compliance with their Brand Safety Standards, a move that allegedly contravenes antitrust laws.

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

— TechCrunch (@TechCrunch) February 1, 2025

The Boycott’s Origin and Impact

The advertiser boycott allegedly began following Elon Musk’s acquisition of Twitter in 2022 and his promise to implement less stringent content regulations to promote free speech. This shift in policy raised concerns among advertisers about brand safety on the platform. According to X’s complaint, at least 18 GARM-affiliated advertisers either stopped or significantly reduced their ad purchases on the platform between November and December 2022.

The impact on X was reportedly substantial. The platform claimed in its lawsuit first filed last year that its advertising revenue primarily came from small- and medium-sized businesses not affiliated with GARM.

Legal and Financial Implications

X’s lawsuit argues that ad prices on its platform are lower than competitors, suggesting that boycotting advertisers are missing out on valuable opportunities. This claim appears to be an attempt to demonstrate the irrationality of the boycott from a business perspective, potentially strengthening X’s antitrust argument.

The legal action has already had consequences beyond X. The WFA has discontinued GARM, citing distractions and resource drains caused by the lawsuit. However, the organization plans to fight the legal battle, maintaining that X’s lawsuit misrepresents its purpose.

The Road Ahead for X and Advertisers

As the legal battle unfolds, the relationship between X and major advertisers remains strained. Some companies, like Unilever, have reached settlements with X and been removed from the lawsuit. Others, such as Amazon, have reportedly returned to advertising on the platform.

The outcome of this lawsuit could have far-reaching implications for the social media advertising landscape. It raises questions about the balance between platform policies, advertiser expectations, and antitrust regulations. As X continues to pursue legal action, the advertising industry and free speech advocates will be watching closely to see how this conflict shapes the future of digital advertising and content moderation.