X is pursuing an antitrust lawsuit against multiple advertisers, alleging a “systematic illegal boycott” orchestrated by the World Federation of Advertisers (WFA) and its Global Alliance of Responsible Media (GARM). The lawsuit, initially filed in August 2024, claims that the WFA's actions coerced advertisers to comply with GARM's Brand Safety Standards, resulting in significant harm to Twitter/X.
Following the lawsuit's filing, the WFA discontinued GARM, citing misinterpretations of its purpose as a distraction. The WFA's CEO stated the organization would contest the lawsuit and uphold competition rules. X has since added more advertisers, including Twitch, Nestlé, Abbott Laboratories, Colgate, Lego, Pinterest, Tyson Foods, and Shell, to the suit.
The complaint alleges that GARM organized a boycott that led to at least 18 affiliated advertisers halting their ad purchases on Twitter between November and December 2022, while others significantly reduced their spending. It emphasizes that most of X's advertising revenue now comes from small- and medium-sized businesses outside GARM's influence. As a result of the boycott, demand for advertising on X has decreased, leading to a drop in ad prices, which remain lower than those of competitors in the social media advertising market.
In addition to the lawsuit, concerns about X's business performance have been echoed by its owner, Elon Musk, who indicated that user growth is stagnant, revenue is unimpressive, and the company is barely breaking even.
