MUSK DECLARES WAR ON ADVERTISERS, ALLEGES ANTITRUST VIOLATION

Wed 07 August 2024:

Elon Musk’s X, formerly known as Twitter, has initiated legal action against a global advertising alliance and several major corporations. The platform accuses them of colluding to boycott X and causing substantial financial loss.

The lawsuit, filed in Texas, targets the World Federation of Advertisers, Unilever, Mars, CVS Health, and Orsted. X claims these companies, acting through a group called the Global Alliance for Responsible Media, have withheld billions in advertising revenue, violating antitrust law.

In a statement on Tuesday about the lawsuit, X’s chief executive Linda Yaccarino said, “People are hurt when the marketplace of ideas is constricted. No small group of people should monopolize what gets monetized.”

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In a tweet on X, Musk declared “war” on the advertisers and said, “We tried being nice for 2 years and got nothing but empty words. Now it is war.”

The lawsuit comes amidst a decline in X’s advertising revenue following Musk’s takeover. Concerns over content moderation and brand safety led many advertisers to reduce spending.

The advertising group defends its initiative, stating it aims to address harmful content on digital platforms. However, legal experts warn that proving an unlawful boycott will be challenging for X.

Christine Bartholomew, an antitrust expert and professor at University at Buffalo’s law school told the Reuters news agency that lawsuits alleging unlawful boycotts can face a high bar.

X must show that there was an actual agreement to boycott joined by each advertiser, Bartholomew said. “Proving this requirement is no small hurdle” in cases where an agreement might be implicit, she said.

Even if the case succeeds, X cannot force companies to spend advertising revenue on the platform, Bartholomew said.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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