Suit claims anti-conservative forces were behind advertisers’ alleged concerted action.
Advertisers began pulling their ads from the microblogging site, then called Twitter, shortly after Elon Musk took the company over in October 2022. Within a month at least six major companies had stopped advertising on the platform due to concerns about its lack of content moderation, a factor that many said made it a forum for misinformation and dangerous discourse, while others hailed it as a robust platform for “conservative” or pro-Trump points of view. Over the following weeks half of Twitter’s top 100 advertisers stopped spending on the platform, later to be renamed X.
Last month, X Corp. filed a second amended complaint in federal court in Wichita Falls, Texas, against some of these advertisers and their member organization, the World Federation of Advertisers (WFA), for antitrust violations. X alleges a group boycott was organized through WFA’s Global Alliance for Responsible Media (GARM) to withhold substantial advertising revenue from the company. The complaint says the advertisers conspired to enforce GARM’s brand safety standards by collectively boycotting Twitter after Musk’s acquisition. The boycott aimed to coerce Twitter into complying with these standards, resulting in significant economic harm to the platform, the complaint alleges (X Corp. v. World Federation of Advertisers, No. 7:24-cv-00114, N.D. Texas).
The boycott worked, the suit says, causing a significant drop in advertising revenue, and harming X’s business operations, equity value, and goodwill. The boycott was contrary to the economic self-interests of the advertisers, absent the alleged conspiracy, X maintains, saying that proves the existence of collusion. The complaint cites violations of the Sherman Act Section 1 and the Clayton Act. X seeks trebled damages and injunctive relief to get the companies to halt their conspiracy.
X’s Other Challenges
But Musk’s platform has lost more than advertisers. Some analysts, like those at Emarketer and reported by Mashable.com, say that since he took over the platform it may have lost 7 million monthly active users in the U.S. The value of the brand has also suffered. Mashable.com said analysts at Brand Finance put X’s brand value at $673 million, down from a pre-Musk value of $5.7 billion.
X has not enjoyed the favorable trends that have graced its competitors. Social media advertising spending has seen significant growth since 2021, when global spend was approximately $153 billion (Statista). By 2024, this figure had surged to around $252.7 billion, representing nearly one-quarter of all global ad spending, and is forecast to reach $300 billion by 2026 (MarketingCharts.com).
Who is WFA?
The WFA describes itself as a “global association that represents over 150 of the world’s biggest brands and more than 60 national advertiser associations worldwide” which “together … create a peer-to-peer network of the world’s best marketers …” They say they are “the voice of marketers worldwide, representing 90% of global marketing communications spend – roughly $900 billion per year.”
Along with the WFA, X has named as defendants Abbott Laboratories; Colgate-Palmolive Co.; CVS Health Corp.; Lego A/S and LEGO Brand Retail, Inc.; Mars, Inc.; Nestlé S.A. and Nestle USA, Inc.; Ørsted A/S (a Danish renewable energy company); Pinterest, Inc.; Shell plc, Shell USA, Inc., and Shell Brands International AG; Twitch Interactive, Inc.; and Tyson Foods, Inc.
U.S. House Republicans
Adding fuel to X’s suit are investigations by the House Judiciary Committee and the Texas Attorney General into alleged misconduct by the advertisers. An interim House staff report released last summer concluded that GARM’s actions likely violated antitrust laws.
Led by President Trump stalwart Rep. Jim Jordan (R-OH), the Committee posted on its website a story published by far-right publisher Breitbart about the Committee’s own “damning report” of “shocking details of corporate collusion to silence conservative viewpoints.” Breitbart claimed it was targeted, along with podcaster Joe Rogan, Twitter/X, and others, by companies that wanted to deny them millions of dollars in advertising revenue. One story allegedly suppressed by the allegedly conspiratorial advertisers was that the CIA interfered in the 2020 election – and candidate Donald Trump’s defeat – by colluding with the Biden campaign to discredit the much-ballyhooed Hunter Biden laptop story.
How Claims of Illegal Boycotts Typically Fail
Lawsuits alleging antitrust boycotts can be dismissed for several reasons, such as a lack of clear evidence that concerted action or agreement existed among the defendants. Plaintiffs also must demonstrate that the defendants’ actions had a substantial impact on the market and that the alleged boycott had an anticompetitive effect, such as raising prices or restricting competition.
Courts can also limit antitrust boycotts to actions with nefarious commercial purposes, like price manipulation. Relevant to this case, if the intention of a boycott is deemed to be for social or political reasons rather than commercial ones, it may not meet the criteria for an antitrust violation.
At least one observer suggests the advertisers could attack the suit as a violation of their free speech rights, citing the U.S. Supreme Court’s landmark ruling in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010). A company’s decision on where to advertise – and where not to advertise – is a legitimate exercise of free speech, the commentator wrote.
Conclusion
As the defendant companies prepare their formal responses to the suit, it will be interesting to see how they counter these allegations. Musk is a powerful advisor to the leader of the party – and the country’s president – whose House members found the advertisers likely have run afoul of antitrust laws. Whatever happens, the case sends a concerning message about the interplay between politics, business, and litigation in an intensely partisan 2025 America.
