Musk and X Intensify Legal Battle Over Advertising Boycott, Suing Nestlé, LEGO, and Shell
X expands its antitrust lawsuit against companies refusing to advertise on the platform, adding major brands such as Nestlé, LEGO, Pinterest, and Shell. The company alleges that WFA coordinated the boycott to force X to comply with so-called brand safety standards, but in fact, it is a use of money to force censorship on political opponents.
X, the social media platform formerly known as Twitter, has broadened its legal fight against companies that have pulled their advertising, including major corporations such as Nestlé, LEGO, Pinterest, and Shell.
The company, led by Elon Musk, claims that these actions represent an illegal systemic boycott.
CEO Linda Yaccarino stated that these companies' refusal to advertise violates antitrust laws.
Since Musk acquired X, the platform's content policies have become more democratic, allowing freedom of expression that includes non left-wing content.
This shift prompted many brands to stop advertising on the platform, fearing their ads would appear alongside problematic content.
In August, X filed its first lawsuit against Unilever, Mars, CVS, and the World Federation of Advertisers (WFA), accusing the WFA's initiative to create brand safety standards of conspiring with advertisers to boycott X. The initiative was shut down two days after the lawsuit was filed.
In November, X added Amazon's Twitch to the lawsuit, and now it has significantly expanded the legal action.
Seven new defendants have been added: Nestlé, LEGO, Pinterest, Colgate, Abbott Laboratories, Tyson Foods, and Shell.
The company alleges that the World Federation of Advertisers (WFA) coordinated the boycott to force X to comply with so-called brand safety standards, but in fact, it is a use of money to force censorship on political opponents.
As a result of the boycott, at least 18 advertisers connected to the WFA stopped advertising on X between November and December 2022, while others significantly reduced their spending.
X's revenue from advertising has been impacted, with most of its advertising income now coming from small and medium-sized businesses.
The drop in demand has also led to a reduction in ad prices, making X a more affordable option compared to its competitors in the social media advertising space.
The ongoing legal battle and the declining advertising revenue further reflect the financial challenges X faces.
Musk had already expressed concerns about the company's financial situation in January, citing stagnant user growth, unimpressive revenues, and difficulty achieving financial balance, according to reports from The Wall Street Journal.
The company, led by Elon Musk, claims that these actions represent an illegal systemic boycott.
CEO Linda Yaccarino stated that these companies' refusal to advertise violates antitrust laws.
Since Musk acquired X, the platform's content policies have become more democratic, allowing freedom of expression that includes non left-wing content.
This shift prompted many brands to stop advertising on the platform, fearing their ads would appear alongside problematic content.
In August, X filed its first lawsuit against Unilever, Mars, CVS, and the World Federation of Advertisers (WFA), accusing the WFA's initiative to create brand safety standards of conspiring with advertisers to boycott X. The initiative was shut down two days after the lawsuit was filed.
In November, X added Amazon's Twitch to the lawsuit, and now it has significantly expanded the legal action.
Seven new defendants have been added: Nestlé, LEGO, Pinterest, Colgate, Abbott Laboratories, Tyson Foods, and Shell.
The company alleges that the World Federation of Advertisers (WFA) coordinated the boycott to force X to comply with so-called brand safety standards, but in fact, it is a use of money to force censorship on political opponents.
As a result of the boycott, at least 18 advertisers connected to the WFA stopped advertising on X between November and December 2022, while others significantly reduced their spending.
X's revenue from advertising has been impacted, with most of its advertising income now coming from small and medium-sized businesses.
The drop in demand has also led to a reduction in ad prices, making X a more affordable option compared to its competitors in the social media advertising space.
The ongoing legal battle and the declining advertising revenue further reflect the financial challenges X faces.
Musk had already expressed concerns about the company's financial situation in January, citing stagnant user growth, unimpressive revenues, and difficulty achieving financial balance, according to reports from The Wall Street Journal.