Zinger Key Points
- X intensifies legal battle, targeting global brands in expanded antitrust lawsuit over advertising boycott.
- High stakes for digital ad industry as X's case challenges major advertisers' collective bargaining power.
Elon Musk‘s X has expanded its antitrust lawsuit, incorporating more prominent advertisers into the list of defendants. The lawsuit charges these advertisers with a collective conspiracy to boycott advertising on the platform after Musk’s takeover.
What Happened: X has now included Nestlé, Abbott Laboratories, Colgate, Lego, Pinterest, Tyson Foods, and Shell in its lawsuit, which was initially filed in August. The lawsuit alleges that members of the now-dissolved Global Alliance for Responsible Media (GARM) unlawfully conspired to withhold billions in advertising revenue from X.
The World Federation of Advertisers (WFA), CVS Health, Mars, Ørsted, and Twitch are also named as defendants in the case. The WFA has previously declared its intention to fight the suit, asserting its compliance with competition law.
As per Business Insider, the lawsuit claims that at least 18 GARM members stopped advertising on Twitter between November and December 2022, following Musk’s acquisition of the platform.
Also Read: Elon Musk Announces Changes to X Over Negativity Concerns: ‘Too Much Negativity Is Being Pushed’
This boycott allegedly led to X becoming a less competitive entity in the digital advertising space and a decrease in user engagement on its platform.
X is demanding trebled compensatory damages and injunctive relief for what it alleges are breaches of US antitrust laws. The WFA, Diageo, and WPP are also facing a similar lawsuit from video site Rumble.
Why It Matters: The expansion of this lawsuit underscores the ongoing tension between X and major advertisers following Musk’s takeover. The outcome of this case could have significant implications for the digital advertising industry and competition law.
If X’s allegations are proven, it could potentially reshape the dynamics of the digital advertising space and set a precedent for future cases involving alleged anti-competitive behavior.
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