In a bold legal move, X, the company formerly known as Twitter, is suing several advertisers in what it calls a “systematic illegal boycott.” The lawsuit, filed by X’s CEO Linda Yaccarino, claims that certain advertisers, with the help of the World Federation of Advertisers (WFA) and its brand safety initiative, the Global Alliance for Responsible Media (GARM), sought to coerce X into compliance with their standards. The legal battle centers around alleged efforts that caused significant harm to X’s advertising revenue, particularly from large advertisers.
The Roots of the Lawsuit: The GARM Boycott
The lawsuit traces back to August 2024, when X initially filed a legal complaint against the WFA and GARM, accusing the organization of orchestrating an advertiser boycott aimed at undermining Twitter’s advertising model. The complaint alleges that GARM’s actions were designed to pressure Twitter to meet certain brand safety standards set by GARM, with the objective of convincing advertisers to stop purchasing ads on the platform unless these conditions were met.
In response, the WFA dissolved GARM, claiming that recent allegations had caused a major distraction and drained resources. Despite this, WFA’s CEO expressed the organization’s intention to fight the lawsuit, asserting their commitment to complying with competition rules and defending their position.
The Expansion of the Lawsuit: New Defendants Added
Since filing the initial suit, X has expanded its legal action, adding several prominent companies as defendants. Among the new defendants are Nestlé, Abbott Laboratories, Colgate, Lego, Pinterest, Tyson Foods, and Shell. This marks a significant escalation in the scope of the case, as it now involves a wide range of global brands that X claims participated in the boycott initiated by the WFA through its GARM initiative.
The amended complaint highlights that 18 advertisers, affiliated with GARM, ceased advertising on Twitter between November and December 2022, while other advertisers reportedly reduced their spending. X claims that these actions severely impacted the platform’s ad revenue and its ability to compete effectively in the advertising market.
Impact of the Boycott on X’s Advertising Revenue
X’s complaint emphasizes the financial damage caused by the alleged boycott, pointing out that the majority of its ad revenue today comes from small- and medium-sized businesses that are not affiliated with GARM or its member agencies. As demand for advertising on X decreased due to the boycott, advertising prices on the platform reportedly plummeted.
The lawsuit claims that the lower ad prices have hurt X’s bottom line, making the platform less competitive in comparison to its competitors in the social media advertising market. According to X, advertisers who participated in the boycott missed out on low-priced advertising opportunities on a platform that meets or exceeds industry standards for brand safety.
Elon Musk’s Concerns: Stagnant User Growth and Revenue Struggles
The legal battle comes amid other internal struggles at X, which has seen concerns raised about its financial performance. In January 2025, Elon Musk, the company’s owner, reportedly expressed his frustration with X’s business trajectory. According to reports, Musk told employees that user growth had stalled, and revenue was underwhelming. He also noted that the company was only breaking even.
These remarks align with the broader challenges X faces in revitalizing its advertising business and competing with platforms like Meta and Google, which dominate the online advertising market.
What’s Next for X and Its Legal Battle?
As the lawsuit continues to unfold, the outcome could have significant implications for the advertising landscape on social media platforms. X’s legal claim focuses on the impact of the advertiser boycott and its assertion that the platform is being unfairly targeted by major brands in collaboration with GARM. The court will need to determine whether these actions constitute an unlawful boycott and whether they caused substantial harm to X’s business.
The ongoing legal battle highlights the growing tension between social media platforms and advertisers, with companies like X seeking to assert their autonomy in the face of brand safety concerns and other external pressures. As X seeks to regain momentum, the lawsuit’s outcome could play a crucial role in shaping the future of its advertising model and its ability to compete in an increasingly competitive digital market.
Stay tuned for updates on this developing legal case, as it may have broader ramifications for the digital advertising and social media industries.
