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In a spat with advertisers, Musk said a large-scale boycott of X would cost the company tens of billions of dollars.

AInvestTuesday, Aug 6, 2024 6:31 pm ET
1min read

Twitter, now known as X, has sued the Global Advertising Association and its member companies, including Unilever, MARS, CVS Health, among others, in a Texas federal court on Tuesday (August 6th) for allegedly coordinating a "large-scale boycott" of the company after Elon Musk's $44bn acquisition of Twitter in late 2022 and subsequent mass reform of its employees and policies.

Elon Musk announced the lawsuit on X on Tuesday, calling it "war," and said they had been "gamed" for two years and got "nothing but empty promises."

X CEO Linda Yaccarino said the suit was partially based on evidence disclosed by the House Judiciary Committee, which held a hearing last month to review whether existing laws are "adequate to deter anticompetitive collusion in online advertising."

The suit's allegations are focused on events in the early days of Musk's acquisition of Twitter, rather than more recent disputes with advertisers. Some advertisers began to pull out of X in November 2023, about a year after Musk's acquisition, fearing that their ads would appear next to some of Musk's more extreme comments, which exacerbated those concerns.

Musk later said those advertisers were engaging in "extortion."

A Unilever executive testified at a congressional hearing last month that the British consumer goods company's decision to advertise on platforms that would not harm its brands was reasonable.

Herrish Patel, president of Unilever Americas, said in a prepared statement: "Only Unilever controls our ad spend. No platform has the right to get our ad dollars."

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