Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Elon Musk’s X is suing a prominent marketing industry trade body and advertisers including Unilever and Mars for an “illegal boycott” of the platform that it claims violates antitrust law, in a dramatic escalation of the spat between the billionaire and several of the social media app’s most valuable sources of revenue.
In a post on Tuesday, Linda Yaccarino, X’s chief executive, said the company had filed a lawsuit against the Global Alliance for Responsible Media, a coalition of brands and advertising agencies, as well as Garm members, including consumer goods groups Unilever and Mars, and US pharmacy chain CVS Health.
“We tried peace for 2 years, now it is war,” Musk said in an X post.
Garm and the companies did not immediately respond to a request for comment.
The lawsuit comes after the Republican-led House of Representatives Committee on the Judiciary last month released a report alleging that Garm and its members had “colluded” to boycott Twitter after Musk’s acquisition, limiting consumer choice in breach of antitrust laws.
The claims have been denied by Garm’s co-founder Rob Rakowitz, with others arguing brands have the right to decide where to spend their advertising dollars.
“The consequence — perhaps the intent — of this boycott was to seek to deprive X’s users, be they sports fans, gamers, journalists, activists, parents or political and corporate leaders, of the Global Town Square,” Yaccarino said on Tuesday.
“To put it simply, people are hurt when the marketplace of ideas is undermined and some viewpoints are not funded over others as part of an illegal boycott,” Yaccarino said, adding that “the illegal behaviour of these organisations and their executives cost X billions of dollars”.
Garm is a cross-industry initiative established in 2019 by the World Federation of Advertisers to “help the industry address the challenge of illegal or harmful content on digital media platforms and its monetisation via advertising”, according to its website. Membership is voluntary.
The lawsuit further deepens the rift between Musk and advertisers concerned about the proliferation of hate and toxic content on the platform, as well as his tendency to lash out publicly against them.
Just before Musk completed his $44bn acquisition of the platform in October 2022, Garm warned the Tesla chief that keeping the platform free of inappropriate material was “non-negotiable”.
Nevertheless, in the wake of the takeover, dozens of big advertisers cut their spending on X causing a 50 per cent drop in advertising revenue after Musk loosened its moderation policies and cut safety staff.
Many have not returned to the platform. Musk, a self-declared “free speech absolutist”, late last year hurled abuse at those who had halted spending, who included Apple, Walt Disney, IBM, Comcast and Warner Bros.
It also marks an about-turn for Yaccarino, a Madison Avenue veteran previously known for her close relationships with brands. The Financial Times previously reported that there have been tensions between Musk and Yaccarino, as the latter has struggled to steady the platform’s financial health.
Musk has been accused of inflaming racial tensions in the UK this week, after saying on his platform that “civil war is inevitable” following riots across the country. The comments risk further alienating brands and angered British prime minister Sir Keir Starmer, whose spokesperson said on Monday: “There’s no justification for comments like that.”
In response to a post by Starmer promising to protect Muslim communities after attacks by far-right protesters, Musk also responded: “Shouldn’t you be concerned about attacks on all communities?”
On Tuesday, Musk continued to criticise the prime minister’s handling of the unrest in a spate of posts to his 193mn followers.
Last November, X reinstated the account of the UK far-right activist and co-founder of the English Defence League, Stephen Yaxley-Lennon, known as Tommy Robinson, who has posted continual commentary and videos of the rioting on the site.
Before Musk’s takeover, Robinson had been banned from what was then Twitter in 2018 for breaching its policies concerning hateful conduct.
Credit: Source link
