This billionaire personality said that advertisers had ‘beaten the council’ of social network X, causing the corporation to lose serious revenue.
Elon Musk sued his client. Photo: Wired.
On August 6, X Corp filed a lawsuit against the World Advertising Federation and several major corporations, accusing them of “together with dozens of accomplices conspiring to appropriate billions of dollars in advertising revenue” of the social network inherited from Twitter.
We tried to be peaceful for 2 years, now it’s war,” Musk declared. More than eight months ago, he bluntly asked advertisers to boycott X’s new “get out” policy.
X filed a lawsuit in the U.S. District Court for the Northern District of Texas. The defendants include a unit of the World Advertising Federation called GARM, along with corporations that own major consumer brands such as Unilever PLC, Unilever United States, Mars Incorporated, CVS Health Corporation and Ørsted A/S.
The lawsuit seeks 3 times more damages based on “actual damages in the amount to be determined at the trial”. X also wants a permanent injunction under Section 16 of the Clayton Act, which prohibits the defendant from continuing to conspire in connection with the purchase of advertisements from the plaintiff.
The lawsuit comes weeks after Musk wrote that X “had no choice but to file a lawsuit against the perpetrators and accomplices in the ad boycott line” and called for “criminal prosecution.”
Musk’s complaints were reinforced by a report by the US House Judiciary Committee. GARM’s level of trade association organization, combined with actions that deprive consumers of their right to choose, potentially violates antitrust laws and threatens the fundamental freedoms of Americans,” the agency said.
Ars Technica contacted the parties on the list of defendants in the lawsuit, however, it has not received any response.
In contrast, the ad industry watchdog group Check My Ads Institute, which is not involved in the lawsuit, said Musk’s complaints would not be admissible under the U.S. constitution.
“Advertisers have the right to choose who and what they want to link to. Elon Musk and leader X have the right to say what they want, even if the information is inaccurate. Advertisers have the right to keep their ads away from that information,” the group said.
Also on Aug. 6, X CEO Linda Yaccarino posted an open letter to advertisers, declaring the boycott “illegal,” and calling it “a stain on a large industry that is not allowed to continue.
X has not disclosed revenue since Musk bought Twitter and turned the company into a private business. However, a recent New York Times article said: “In the second quarter of this year, X earned $114 million in the United States, down 25% from the first quarter and down 53% from the previous year.”