In a significant legal escalation, X Corp. has expanded its lawsuit against major global advertisers, accusing them of orchestrating an unlawful boycott that allegedly cost the company billions in advertising revenue.
On Saturday, X filed an amended complaint in a Texas court, adding Nestlé, Abbott Laboratories, Colgate-Palmolive, Lego, Pinterest, Tyson Foods and Shell as new defendants. These companies join the World Federation of Advertisers (WFA), CVS Health, Mars, Ørsted, and Twitch, which were named in the original lawsuit filed in August.
The lawsuit accuses the Global Alliance for Responsible Media (GARM)—a now-defunct initiative created by the WFA—of acting as a vehicle for collusion among advertisers to “collectively withhold billions of dollars in advertising revenue” from X in retaliation for changes made by Elon Musk after his acquisition of the platform in late 2022.
According to the amended complaint, GARM’s members agreed to a group boycott of X to pressure the platform to comply with GARM’s brand safety standards. The complaint states that GARM “ leveraged “the collective market power of its advertiser members to advance their economic interests by forcing changes to the business operations of digital media and social media platforms that sell advertising inventory to GARM members or to their clients”.
The lawsuit alleges that this coordination violates U.S. antitrust laws, specifically Section 1 of the Sherman Act, which prohibits agreements among competitors that restrain trade. X is seeking “trebled compensatory damages and injunctive relief, “meaning it wants both monetary damages and a legal order preventing further coordinated action against the company.
A Coordinated Boycott?
The lawsuit details how at least 18 major advertisers allegedly stopped advertising on Twitter between November and December 2022, shortly after Musk took over the platform.
Key claims from the lawsuit include that GARM members collectively acted to enforce Twitter’s adherence to its brand safety standards by orchestrating a widespread boycott. According to X, this led to a drastic decline in X’s advertising revenue, making it a less effective competitor to other social media platforms like Meta, Google, and TikTok. The boycott was allegedly triggered and sustained by internal GARM communications, which encouraged members to withhold ad spending on X until it complied with their demands.
The amended complaint cites internal GARM emails in which members sought advice on whether to stop advertising on X, with one company reportedly asking: “Now, some time has passed, and I am curious to know what you would advise us to do. And what are other global advertisers doing – have they come back to the [Twitter] platform, or are they still off?”
According to X, this communication demonstrates collusion rather than independent business decisions, which is a central argument in its antitrust claim.
The lawsuit also notes that the U.S. House Judiciary Committee has been investigating whether GARM’s practices contributed to the “demonetisation of conservative media”. In July 2024, the committee released a report titled “GARM’s Harm: How The World’s Biggest Brands Seek to Control Online Speech”, which accused GARM of colluding with advertisers to suppress certain viewpoints by controlling which platforms received ad revenue.
X CEO Linda Yaccarino posted on X in which she claimed the advertiser boycott threatens the platform’s future. “These organisations targeted our company and our users. They conspired to boycott X, which threatens our ability to thrive. That puts the global town square—the one place where you can express yourself freely and openly—at long-term risk.”
A Message to X Users pic.twitter.com/6bZOYPhWVa
— Linda Yaccarino (@lindayaX) August 6, 2024
She also criticised the role of GARM, saying that no small group of advertisers should have the power to dictate what gets monetised.
No small group should be able to monopolize what gets monetized. This is an important acknowledgement and a necessary step in the right direction. I am hopeful that it means ecosystem-wide reform is coming. https://t.co/BlHqHqZEyp
— Linda Yaccarino (@lindayaX) August 8, 2024
GARM’s Closure and Industry Fallout
GARM, which was founded in 2019 as a WFA initiative, officially ceased operations in 2024, shortly after X filed its initial lawsuit. The organisation claimed it lacked the resources to fight the legal battle.
WFA CEO Stephan Loerke told its members in an email at the time that the decision was “not made lightly” but that GARM is a non-profit with limited resources.
However, he added that the WFA and GARM would contest the allegations in X’s suit and was confident that it would “demonstrate our full adherence to competition rules in all our activities.”
X argued, however, that the shutdown was an attempt to avoid scrutiny over its alleged role in orchestrating the boycott.
Nishma Patel Robb, who until recently was the top marketer for Google UK, expressed shock that the WFA had been bullied into shutting down the non-for-profit GARM.
In a LinkedIn post, she said: “Well I’m sure you’re all desperate to now go spend on X against the cess pit shite content on there?!! Oh sorry I mean ‘the global town square’ 🙄
Good to see that Elon Musk’s efforts to woo advertisers at Cannes are paying off! 🙄
“Please help me to have to stop eye rolling and ensure we keep starving hate – and not let Musk and his bros bully anyone into telling them where and how they have to spend their marketing budgets. Especially against content that is not considered safe!”
The move follows extended flip-flopping by Musk following his takeover of Twitter. Late last year, he told the advertising industry at large to “Go fuck yourself”.
He also promised in November last year to file a “thermonuclear lawsuit” against Media Matters for America, a group that seeks to redress misinformation spread by right-wing groups in America. Media Matters had told IBM that X had placed its ads next to content promoting Adolf Hitler and the Nazi Party.
IBM subsequently pulled its ad dollars. Media Matters then reported finding ads for Amazon, NBA Mexico, NBCUniversal Catalyst, Action Network, and Club for Growth next to white nationalist hashtags such as “KeepEuropeWhite,” “white pride,” and “WLM” (“White Lives Matter”).
Then, in Cannes, Musk said that not all of the advertising industry needed to “Go fuck yourself” and that his comments were only addressed to those advertisers that had chosen to stop spending on X. Musk said that advertisers had the right to choose only to appear next to content that they deem safe. However, they did not have the right to insist on content being removed from the platform — quite how he’s squaring that circle in his own head remains a mystery.
Last month, in a US Congressional hearing, right-wing commentator Ben Shapiro branded GARM members — including the likes of Unilever, Disney, Coca-Cola and more — members of a “cartel”.
“In reality, GARM acts as a cartel. Its members account for 90 per cent of ad spending in the United States–almost $US1 trillion ($AU1.41 trillion). In other words, if you’re not getting ad dollars from GARM members, it’s nearly impossible to run an ad-based business. And if you’re not following their preferred political narratives – the ones Kara Swisher and Dianne Feinstein would follow – you will not be deemed ‘brand safe,’” Shapiro told legislators.
Why Did Advertisers Pull Out?
Many major advertisers, including Coca-Cola, Unilever, and McDonald’s, paused or reduced their spending on X after Musk’s acquisition. The lawsuit alleges that this was due to GARM’s influence, but industry insiders have pointed to other factors, including content moderation concerns – including the increase of hate speech, misinformation, and controversial content since Musk’s takeover-Musk’s personal behaviour and a lack of brand safety assurances.
A Kantar study found that only 4% of marketers believe X provides adequate brand safety, compared to 36% for Google. Additionally, the study found that more than a quarter of marketers planned to reduce their ad spending on X in the coming year.
The outcome of X’s lawsuit could have major implications for the advertising industry. If X wins, it could set a precedent that limits advertisers’ ability to collectively decide where to spend their budgets. It could also force greater scrutiny on industry groups like the WFA.
X has already seen some small victories in its legal fight. In October 2024, it dropped Unilever from the lawsuit after reaching an undisclosed agreement, suggesting that some advertisers may be willing to rebuild relationships with the platform.
However, with the lawsuit now expanded to include even more major brands, the battle is far from over. If X succeeds, it could reshape the digital advertising landscape, forcing greater transparency in how industry groups influence ad spending.
This case is expected to take months, if not years, to resolve. With X seeking billions in damages, the stakes couldn’t be higher for Musk’s social media empire.