Lawsuit Against Advertising Coalition: X Makes Serious Allegations

The social media platform X, formerly known as Twitter, has filed a lawsuit against a group of advertisers. The lawsuit, filed on Tuesday in the U.S. District Court for the Northern District of Texas, names the World Federation of Advertisers, Unilever, Mars, CVS Health Corporation, and Ørsted as defendants. These companies are accused of coordinating an illegal advertising boycott against X. A response to inquiries from Deseret News to the communications departments of the affected companies was not received. "This is not an easy decision, but a direct consequence of their actions," X CEO Linda Yaccarino stated in an open letter to the advertisers. A central part of the lawsuit concerns the initiative of the World Federation of Advertisers (WFA) called the Global Alliance for Responsible Media (GARM), which was recently also the subject of a parliamentary hearing. WFA spokesperson Will Gilroy termed the allegations as unfounded and emphasized that membership in GARM is voluntary and each company can freely decide to what extent it applies GARM's guidelines. X argues that the defendants, through this initiative, withheld billions of dollars in advertising revenue from Twitter. The lawsuit claims that the advertisers, concerned that Twitter might deviate from certain standards, acted collectively to force Twitter to comply with these standards. The lawsuit highlights that the boycotting companies harmed themselves and others, acting solely in reliance on the participation of their competitors. The boycott measures continue to this day, despite X applying similar brand safety standards as its competitors. X also argues that the coordinated activities of the advertisers override consumer interests and are not in the best interest of the advertising companies themselves. "Because of the boycott, ad prices on X have dropped significantly since November 2022 and are now considerably lower than those of the closest competitors in the market," the lawsuit states. This discourages other social media platforms from lowering their ad prices, thus affecting competition. X is seeking a jury trial and emphasizes that it has met all the desires of the advertisers and groups like GARM. "We feel compelled to seek a resolution, given the current situation," Yaccarino concluded.