Musk sues Mars over advertising boycott

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"Don't advertise. Go fuck yourself. Is that clear?" Elon Musk has openly advised companies that consider his microblogging platform X to be an unsuitable environment for their brands. He did not want them to book advertising on X. That was in November. Now his company is suing an association and four corporations, including Mars, for following his advice and not booking advertising on X. The lawsuit maintains that it would be illegal to not buy ads on X (formerly Twitter) in a coordinated fashion.

The defendants are the industry association World Federation of Advertisers, Unilever, Mars, the US medical group CVS Health and the majority state-owned Danish energy group Ørsted. X seeks treble damages for lost advertising revenue plus interest and costs of suit – not only for the harm allegedly caused by the defendants, but also for the harm allegedly caused by non-defendant "co-conspirators". In addition, the U.S. District Court should enjoin Defendants from continuing to jointly refrain from advertising on X.

Voluntary GARM Guidelines

The lawsuit takes offense at the Global Alliance for Responsible Media (GARM), of which X itself is a member. GARM is an initiative of the industry association World Federation of Advertisers based in Belgium. Its members should avoid financially rewarding illegal or harmful content through their advertising and damaging the reputation of their brand in the process. At the same time, GARM is intended to promote competition between advertising platforms.

The GARM website cites child pornography and content that promotes terrorism as examples of content that is undesirable alongside advertising. The initiative was prompted by the Facebook livestream of a terrorist attack on worshippers in a place of worship in New Zealand. GARM members include advertisers, advertising agencies and advertising platforms such as Meta Platforms, X and YouTube.

Membership of the initiative is voluntary, as is adherence to the established guidelines. GARM does not make any decisions on advertising bookings, does not make any recommendations on specific bookings and expressly does not sanction violations of the guidelines.

The alleged group boycott

The lawsuit alleges that the World Federation of Advertisers organized an advertising boycott of Twitter (since renamed X) in the wake of Musk's acquisition of Twitter to force the platform to comply with the GARM guidelines. The lawsuit cites an open letter from the association to Elon Musk dated October 31, 2022, in which Musk publicly responded that nothing had changed in Twitter's approach.

Several advertising agencies did not trust this, which is why they advised their clients in November 2022 not to place any paid advertising on Twitter until further notice. In December, Twitter promised to take steps to follow the guidelines – apparently Twitter had not followed the guidelines. Meanwhile, it's clear that X is a safe haven for Holocost deniers, but not for big brands. According to the lawsuit, dozens of former advertisers have stopped or significantly reduced their bookings – to date. Accordingly, X's advertising revenue has dropped significantly.

X scores a legal own goal

X recognizes the simultaneous withdrawal of the advertisers as a violation of Section 1 of the Sherman Antitrust Act of 1890, the nucleus of US competition law. It criminalizes contracts or conspiracies that affect trade or commerce. Under civil law, damages are threatened, and under criminal law, conviction for a crime with high fines and prison sentences. At the same time, the statement of claim alleges that 99% of the advertising placed on X in 2023 and 2024 appeared alongside content that complied with the GARM guidelines for the protection of brand reputation.

However, the lawsuit shoots itself in the foot in the very next paragraph: the alleged advertising boycott is "against the economic interests of the boycotting advertisers", it says, because advertising is cheaper on X than on other social networks. According to established US case law, collectively organized boycotts can certainly violate the Sherman Act – but only if they are to the economic advantage of the boycotters. If the motives behind the boycott are other than economic advantage, community boycotts are permissible (see National Association for the Advancement of Colored People v Claiborne Hardware Co, US Supreme Court 1982).

The lawsuit is called X v World Federation of Advertisers et al and is pending in the US Federal District Court for Northern Texas under case number 7:24-cv-00114. The case is also known as X v GARM.

• Klageschrift X v GARM

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