X levelled new charges against many companies for their alleged involvement in the ‘illegal’ advertising boycott that caused a decline in revenues. In this context, it enlarged the antitrust case it had previously initiated and sued brands such as Lego and Nestle.
X sued giant brands with illegal advertising embargo
The lawsuit filed in August against the World Federation of Advertisers (WFA) and the Global Alliance for Responsible Media (GARM), an initiative to keep brands safe, has been expanded to include brands such as Lego, Nestle, Pinterest, Tyson Foods and Shell.
X CEO Linda Yaccarino described it as a ‘systematic and illegal boycott’. She accused advertisers and organisations of organising an effort to weaken the platform. The company said the boycott has led to a drastic drop in ad demand and ad prices on the platform.
X stated that the majority of its advertising revenue comes from small/medium-sized businesses that are no longer GARM members or clients of GARM member advertising agencies. The legal process began when X filed a lawsuit against WFA and GARM.
X alleged that these organisations had used the brand safety initiative to organise a boycott to force the platform to adopt the standards set by GARM. After the lawsuit was filed, WFA decided to shut down GARM, citing pressure.
However, the case expanded and X added new defendants, including Twitch. The company’s latest lawsuit said that GARM-affiliated advertisers damaged X’s ability to generate advertising revenue by suspending ad buys on the platform between November and December.
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