Credit: Hassan Pasha via Unsplash https://unsplash.com/@hpzworkz
Billionaire Elon Musk’s X has extended a lawsuit over an advertising boycott to major brands including Colgate-Palmolive, Pinterest, Lego and Nestlé.
The extension is part of X’s action against the World Federation of Advertisers (WFA) and brand safety initiative the Global Alliance for Responsible Media (GARM).
The social media platform argues it was deprived of billions of dollars in advertising revenue.
The WFA “discontinuing all GARM activities with immediate effect” following the legal challenge.
Advertisers had withdrawn their advertising, over concerns for brand safety, from then Twitter when Musk took the platform private in 2022 and said he would champion free speech by easing content restrictions.
Lawyers for Musk at the weekend added new “conspirators” including Lego, Nestlé, Tyson Foods, Abbott Laboratories, Colgate-Palmolive, Pinterest and Shell International.
“GARM celebrated—and took responsibility for—the massive economic harm imposed on Twitter by the boycott, boasting within just a few months of the start of the boycott that “they [Twitter] are 80% below revenue forecasts,” the lawsuit alleges.
“The boycott and its effects continue to this day, despite X applying brand safety standards comparable to those of its competitors and which meet or exceed those specified by GARM.”
X argues that, in a competitive market, each social media platform would set brand safety standards optimal for its users and that advertisers would select the platforms on which they advertise.
“Social media platforms that select efficient brand safety standards will thrive; platforms that select inefficient standards will lag behind," the lawsuit said.
“Through this competitive process, platforms will discover and adopt the brand safety practices that best promote consumer welfare.
“But collective action among competing advertisers to dictate brand safety standards to be applied by social media platforms shortcuts the competitive process and allows the collective views of a group of advertisers with market power to override the interests of consumers.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.