X Broadens Lawsuit Against Advertiser ‘Boycott’ to Target Lego, Nestlé, Pinterest, and More
X, the social media platform formerly known as Twitter, has taken a significant step by filing an antitrust lawsuit against multiple advertisers. This legal action is a response to what CEO Linda Yaccarino describes as a “systematic illegal boycott” that has adversely affected the platform’s advertising revenue.
Background of the Antitrust Lawsuit
The initial lawsuit was filed in August 2024 against the World Federation of Advertisers (WFA) and its brand safety initiative, the Global Alliance of Responsible Media (GARM). Shortly after the lawsuit was announced, the WFA decided to discontinue GARM, citing that recent allegations had misconstrued its purpose and significantly drained resources.
The WFA’s CEO assured members that the organization would contest the lawsuit and uphold adherence to competition rules across all activities.
Expansion of Defendants in the Lawsuit
Following the initial filing, X included additional advertisers such as Twitch as defendants. As reported by Business Insider, the amended complaint now names several high-profile companies including:
- Nestlé
- Abbott Laboratories
- Colgate
- Lego
- Tyson Foods
- Shell
Allegations Against Advertisers
The lawsuit claims that the WFA orchestrated a boycott of X through GARM to pressure the platform into complying with its Brand Safety Standards. The complaint further alleges that this boycott has had a detrimental effect on X, with at least 18 GARM-affiliated advertisers halting their ad purchases between November and December 2022. Many other advertisers have reportedly reduced their spending significantly.
Impact on Advertising Revenue
The lawsuit highlights that the majority of X’s advertising revenue now comes from small- and medium-sized businesses that are not affiliated with GARM or its member agencies. As the demand for advertising on X has decreased due to the boycott, the advertising prices on the platform have also declined, remaining well below those of its closest competitors in the social media advertising landscape.
By opting not to advertise on X, the boycott is seen as a missed opportunity for advertisers to purchase low-cost inventory on a platform that maintains high brand safety standards.
Company Insights and Future Prospects
This lawsuit is not the only indication of challenges facing X. Elon Musk, the owner of X, expressed concerns in January regarding the company’s performance, stating that user growth is stagnant, revenue is unimpressive, and the business is barely breaking even.
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