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HomeInnovationElon Musk's X Takes Legal Action Against Lego, Shell, and Others Over...

Elon Musk’s X Takes Legal Action Against Lego, Shell, and Others Over Advertising Boycott

 

Elon Musk’s X Takes Legal Action Against Lego, Shell, and Other Firms for Alleged Advertising ‘Boycott’


Elon Musk’s platform, X, is initiating legal proceedings against several companies, claiming they have unlawfully participated in a coordinated boycott of the social media site.

 

On Saturday, attorneys representing Musk submitted an updated complaint, broadening their 2024 lawsuit against the Global Alliance for Responsible Media (GARM), an advertising industry coalition, and its member companies. They are accused of violating antitrust regulations following Musk’s acquisition of the platform, formerly named Twitter, in 2022. The initial suit pointed out that these firms “conspired” to “collectively withhold billions in advertising revenue,” specifically referencing companies such as CVS, Mars, Ørsted, and Twitch.

The new legal filing now includes Nestlé, Abbott Laboratories, Colgate-Palmolive, Lego, Pinterest, Tyson Foods, and Shell International in this list.

 

According to the lawsuit, members of GARM acted to ensure that the social media platform adhered to particular brand safety guidelines favored by the group, leading to a collective halt in ad purchases on X.

 

The complaint further asserts that these companies celebrated when X failed to meet its projected revenue targets and that the boycott continues to have a negative impact on the platform, even though X has implemented standards “that meet or exceed” those required by GARM.

Nestlé, Abbott Laboratories, Colgate-Palmolive, Lego, Pinterest, Tyson Foods, and Shell International have yet to respond to inquiries from YSL News.

 

Musk’s legal team contended that social media platforms should be free to establish their own optimal brand safety standards tailored to their users and competitive markets, which would influence advertisers’ decisions on where to allocate their spending.

 

“However, when competing advertisers collaborate to impose brand safety standards on social media platforms, it disrupts the competitive framework and allows the dominant perspectives of a group of advertisers to overshadow consumer interests,” the complaint stated.

 

Since Musk’s takeover and rebranding of Twitter to X, the platform has undergone significant changes, including layoffs of the original staff, reduced content moderation, and the reinstatement of several previously suspended accounts, such as that of former President Donald Trump. Throughout this time, X has struggled with its relationship with advertisers, which has been contentious. Last year, X’s CEO Linda Yaccarino released an open appeal to advertisers, discussing how the deteriorating relationship has impacted the platform.

Contact Rachel Barber, Follow her on X @rachelbarber_