Billionaire Elon Musk declared âwarâ on Tuesday after filing a lawsuit against a handful of advertisers for allegedly violating antitrust laws by illegally boycotting his social media company and depriving X billions in revenue.
Musk and X Corp. CEO Linda Yaccarino took to the social media platform to address the lawsuit against the Global Alliance for Responsible Media (GARM), the World Federation of Advertisers, and GARM members CVS Health, Mars, Orsted and Unilever. The lawsuit claims the group of advertisers allegedly âconspiredâ to withhold billions in revenue from the social media company by coordinating a group boycott against advertising on the platform after Musk bought the company in 2022.
Yaccarino discussed the companyâs decision in an open letter to advertisers, calling them out for choosing to âdismiss the factsâ despite the companyâs massive user growth jumping 25% since August 2022.
âThe illegal behavior of these organizations and their executives cost X billions of dollars. Since arriving at X, I made it my mission to continue to build a platform where people, brands and advertisers can thrive in our unique, dynamic and safe environment,â Yaccarino wrote.
âWe have proven our platform provides advertisers a way to showcase their brands and reach their target audiences safely, efficiently and effectively. Thatâs why Iâve worked in good faith with marketers across the globe to showcase our innovations and allay any concerns with brands whom Iâve partnered with for decades,â Yaccarino continued. âThe unfortunate reality is that despite all our efforts, hundreds of meetings and research to the contrary, many companies chose to dismiss the facts. To those who broke the law, we say enough is enough.â
Musk commented on the announcement, responding to Yaccarinoâs post with, âWe tried peace for 2 years, now it is war.â
The U.S. House of Representatives Judiciary Committee released a report in July on GARMâs harm to online speech. The Committee obtained evidence that shows GARM âand its members directly organized boycotts and used other indirect tactics to target disfavored platforms, content creators, and news organizations in an effort to demonetize and, in effect, limit certain choices for consumers.â
Xâs advertising revenue dropped nearly 60% between April 2023 to May 2023. Major companies such as Apple, Amazon and Disney were among the group to either decrease or pause spending on the platform following Muskâs take over, with some ad agencies blaming misinformation and hate speech as a reason.
A federal judge ruled against Google on Monday, stating the major tech company violated antitrust law through its search business.
Featured Image Credit:Â Flickr/Steve Jurvetson
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