A Legal Battle Over Advertising Revenue
The Lawsuit
This week, Elon Musk is back in the headlines for a bold legal move against multiple major corporations. Since acquiring the social media platform now called X in 2022, the platform’s advertising revenue plummeted by over 50% within the first year. Elon Musk is accusing these corporations for boycotting X for advertising purposes leading to this drop in revenue.
Elon Musk has filed a lawsuit in federal court in Texas against, Unilever, Mars, CVS Health, Ørsted and the World Federation of Advertisers.
The Legal Claims
The lawsuit is founded on the accusation that the companies have violated US antitrust laws by boycotting X. Claims that they conspired against X and have deprived the platform of “billions of dollars” in advertising revenue.
Musk argues that they have also harmed themselves by steering clear of X and missing out on the benefits of advertising on a major social media platform.
Musk’s legal team is likely to argue that the actions of Unilever, Mars, CVS Health, Ørsted, and the World Federation of Advertisers constitute a concerted effort to stifle competition and harm X’s business operations.
Policies at X
Since Musk’s acquisition, X has faced increasing scrutiny over the rise in harmful content on the platform. X reports that 31% more people have reported harmful content since Elon Musk’s takeover.
The X guidelines state that there is no screening process to remove potentially offensive comments and their policy is to not mediate content or intervene in disputes between users.
Companies have avoided X as the harmful content on the platform could easily affect their brand safety. A Unilever executive who testified at last month’s congressional hearing and defending the company’s practice mentioned that they choose to place ads on platforms that won’t harm their brand. This comes as brands avoid X due to having their ads show up next to pro-Nazi content and hate speech.
X has stated that it had applied brand-safety standards which compare to competitors and that “meet or exceed” measures specified by the Global Alliance for Responsible Media. They are seeking unspecified damaged and a court order against continues efforts to conspire against X by withholding advertising.