A lawsuit initiated by Elon Musk’s social media platform X, formerly Twitter, against Media Matters For America, or MMFA, has been permitted to proceed by a judge who is a shareholder in Tesla Inc. TSLA.
What Happened: Judge Reed O'Connor, a shareholder in Tesla, rejected a motion to dismiss the lawsuit on Thursday.
The lawsuit, lodged in Texas last year, contends that MMFA should be held legally accountable for negative reporting that resulted in companies pulling their ads from X, reported The Verge.
O'Connor dismissed objections that the lawsuit was filed in a state where neither X nor MMFA is headquartered. He justified this by stating that MMFA had “targeted” two Texas-based advertisers, Oracle and AT&T, in their articles and interviews.
The judge also ruled that X’s claims had enough merit to proceed in court. Unlike typical libel lawsuits, X does not accuse MMFA of making a factually incorrect claim.
Instead, it argues that the authors “deliberately misused the X platform to induce the algorithm to pair racist content with popular advertisers' brands.”
This lawsuit comes a few weeks after NPR reported that O'Connor holds between $15,001 and $50,000 worth of stock in Tesla, one of Musk's other companies.
The judge recused himself from a lawsuit Musk filed against advertisers who stopped placing ads on X, the report noted.
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Why It Matters: In March, Musk shifted his focus to support a legal challenge against Media Matters by Missouri Attorney General Andrew Bailey, following a setback in a lawsuit against the Center for Countering Digital Hate.
This development came after in California, U.S. District Judge Charles Breyer dismissed X’s complaint against the Center for Countering Digital Hate stating, “This case is about punishing the defendants for their speech.”
Earlier this month, Musk’s company filed antitrust lawsuits, claiming a conspiracy to withhold advertising revenue. This lawsuit led to the suspension of operations by the Global Alliance for Responsible Media.
Meanwhile, a Brazilian Supreme Court justice has called for an immediate halt to X’s operations in the country.
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