Elon Musk’s social media company, X—formerly known as Twitter—has recently intensified its legal battle against advertisers by incorporating Amazon’s Twitch livestreaming platform into its ongoing lawsuit. This legal action revolves around allegations that various advertisers, particularly members of the now-defunct Global Alliance of Responsible Media (GARM), conspired to boycott X, effectively withholding billions in advertising revenue. The original lawsuit was initiated in August, and the addition of Twitch signifies Musk’s determination to pursue the matter vigorously, even after GARM ceased operations shortly following the lawsuit’s filing. The World Federation of Advertisers (WFA), which oversaw GARM, has announced intentions to contest the allegations, expressing confidence in their compliance with competition laws.
The amended lawsuit specifically alleges that at least 18 members of GARM, including Twitch and well-known brands such as Mars, CVS Health, and Ørsted, halted advertising on X between November and December 2022. According to X’s claims, Twitch has notably not engaged in any advertising within the United States since November 2022, and its spending on advertising in other global markets has been minimal. This suggests a coordinated effort among these advertisers to withdraw support from X during a critical period, which X intends to highlight as a violation of fair business practices.
While some advertisers have started returning to X, possibly influenced by Musk’s political positioning following Donald Trump’s electoral win, the platform hasn’t yet regained the pre-acquisition levels of advertiser engagement. Despite a noticeable surge in spending from X’s top 100 advertisers—an 800 percent increase in U.S. ad spend within a week of the November 6 elections—data from market intelligence firm Sensor Tower indicates that total spending remains significantly lower. Specifically, these advertisers spent 64 percent less in that period compared to the same time in the previous year, illustrating the ongoing challenges X faces in revitalizing its advertising ecosystem.
The situation reflects broader dynamics surrounding advertising strategies on social media platforms, with Musk’s leadership style and policy changes being closely monitored by both advertisers and users. The controversy surrounding the lawsuit also highlights the heightened tension between major tech platforms and advertisers as they navigate the implications of free speech, content moderation, and perceived biases. As X continues to evolve under Musk’s management, the outcomes of such legal confrontations could have long-lasting effects not only on the platform but also on the industry standards for advertising and business conduct.
Moreover, the implications of the lawsuit reveal the complexities of corporate partnerships in the tech space, particularly how shifts in management and company policies can influence advertiser relationships. The ongoing legal battle could serve as a significant case study in the examination of competitive practices and the legitimacy of boycotts in digital advertising. If X’s claims are substantiated, it may prompt a reevaluation of how advertising networks interact and the legal frameworks governing these relationships.
Finally, the tech world and business analysts are keenly observing the developments, as the outcomes of the lawsuit could mark a pivotal moment for X and other social media platforms. The focus on political influence, advertiser loyalty, and corporate strategies under Musk’s leadership signals an era where traditional advertising practices are being tested against rapidly changing digital landscapes. As the case unfolds, it remains to be seen how this will shape the future of advertising on social media and what lessons can be drawn regarding regulation and competitive dynamics in this sector.