Elon Musk Sues Advertisers Who Boycott X Under Antitrust Laws
If a company joins an organization to restrict advertising on social media platforms which could damage their brand, does that amount to an anti-trust violation? Elon Musk thinks so.
In August 2024, Musk sued the World Federation of Advertisers and Unilever, Mars, CVS Health, and Orsted. In January 2025, he amended his lawsuit to add Twitch Interactive, Nestle, Abbott Laboratories, Colgate-Palmolive Company, Lego, Pinterest, Tyson Foods, and Shell. These companies are members of the World Federation of Advertisers.
In the complaint, X Corp. (formerly Twitter) accuses these major companies of antitrust activities relating to a group boycott of advertising on the social media platform. X alleges that this illegal boycott cost the company billions of dollars in lost advertising revenue.
Is a group of companies refusing to advertise on social media an antitrust violation? Or do companies have a right to freedom of speech to determine where and how they promote their brand?
Who Is the World Federation of Advertisers?
According to its website, the World Federation of Advertisers is an association of 150 global brands and over 60 national advertising associations. Its goal is to offer “expertise, inspiration, and leadership.” One of its projects was forming the Global Alliance for Responsible Media.
Who Is the Global Alliance for Responsible Media?
The Global Alliance for Responsible Media (GARM) was an initiative to reduce advertising on social media containing harmful or illegal content that could damage a company’s brand and reputation. GARM began after a Facebook livestream attack in a New Zealand Mosque. Companies could see value in not having their ads featured next to harmful content such as child pornography, violence, or hate speech.
The WFA has since shut down GARM’s activities due to “recent allegations that unfortunately misconstrue its purpose and activities have caused a distraction and significantly drained its resources and finances.”
Does a Corporation Have the Right to Freedom of Speech?
Yes. The U.S. Supreme Court ruled in Citizens United v. Federal Election Commission that not only do corporations have the same rights to the First Amendment of freedom of speech as an individual, but also corporations may engage in political communications. In that case, it found that government restrictions on a corporation’s spending on political campaigns violated the corporation’s freedom of speech.
The World Federation of Advertisers and the companies named in the complaint can assert that advertising (or not advertising) is a legitimate exercise of free speech as protected by the U.S. Constitution.
Indeed, businesses have a vested interest in protecting their brand. Many social media sites that “promote free speech” allow for violent or racist posts, which companies do not want to associate with. Even Elon Musk created controversy for an antisemitic post. A company has an interest in exercising its free speech by advertising or withholding advertising on a social media site that could adversely impact its brand.
Does a Group Refusing to Advertise on Social Media Amount to an Antitrust Violation?
Antitrust laws were created to avoid monopolies and unfair restraint of trade. There are three major antitrust laws: the Sherman Act, the Clayton Act, and the Federal Trade Commission Act.
The Sherman Act: The Sherman Act makes it illegal for companies to conspire to limit trade or create monopolies. Violations can result in civil penalties (fines) and criminal penalties (imprisonment).
The Clayton Act: The Clayton Act addresses specific acts that result in restricting competition, such as price-fixing, exclusive deals, and mergers and acquisitions. Violations of the Clayton Act result in civil penalties (fines).
The Federal Trade Commission Act: The Federal Trade Commission Act seeks to cover trade violations and unfair or deceptive business practices not addressed by the Sherman Act or the Clayton Act.
X alleges that membership to the World Federation of Advertisers and GARM is proof that there was group action to boycott advertising on X. X’s complaint asserts that “GARM’s members agreed to adopt, implement, and enforce GARM’s brand safety standards, including by withholding advertising from social media platforms deemed by GARM to be non-compliant with the brand safety standards.”
The companies could argue that the purpose of joining the association was to protect their brands from damaging social media platforms. If GARM deemed X did not comply with brand safety standards, the companies may follow GARM’s recommendations. However, following recommendations does not amount to a collusion of an advertiser boycott on X. It would be difficult to show that membership to an organization promoting brand safety from social media platforms is an antitrust violation as imagined by the U.S. antitrust laws.
The Result
It may seem to make little business sense for a company like X to sue major advertisers that it hopes to court. X does need advertising revenue. According to CNN, X's value dropped by 80% after Musk’s takeover two years ago.
Even if the lawsuit proves to be frivolous and gets thrown out of court, there could be other benefits to filing a lawsuit. Corporations may feel compelled to advertise on the X platform to appease Musk or at least avoid being sued. Corporations, such as Facebook, may be pressured to stay in Musk's favor, who is currently an influential figure in the Trump administration and has a significant online following.
Related Resources
- Social Media Censorship and the Law (FindLaw Learn About the Law)
- How Can Elon Musk Change Twitter Policy? (FindLaw Law and Daily Life)
- What Is Antitrust Law and Trade Regulation? (FindLaw Learn About the Law)
