X expands the demand for the advertiser 'boycott' to include Lego, Nestlé, Pinterest, and other companies.

X has filed a lawsuit against more advertisers in an antitrust case, in which its CEO, Linda Yaccarino, described a "systematic illegal boycott." This legal action was initiated in August 2024 against the World Federation of Advertisers (WFA) and its brand safety initiative, the Global Alliance for Responsible Media (GARM). Shortly after the lawsuit, the WFA decided to dissolve GARM, citing that "recent allegations that unfortunately misinterpret its purpose and activities have caused distractions and significantly drained its resources and finances."

The WFA's CEO communicated to its members that the organization would fight the lawsuit and demonstrate its "full adherence to competition standards in all its activities." In a later phase, X included several advertisers, such as Twitch, as defendants in the lawsuit. Recently, according to a report, a modified complaint has been filed that expands the list of defendants to include companies like Nestlé, Abbott Laboratories, Colgate, Lego, Pinterest, Tyson Foods, and Shell.

The complaint asserts that the WFA organized an advertiser boycott against Twitter through GARM with the aim of forcing the platform to comply with GARM's brand safety standards. Furthermore, it alleges that these actions harmed Twitter/X, as at least 18 advertisers aligned with GARM completely ceased their ad purchases on the platform between November and December 2022, while other advertisers substantially reduced their advertising spending.

The legal document also indicates that the majority of current advertising revenue for X comes from small and medium-sized businesses that are neither members of GARM nor clients of advertising agencies associated with GARM. As demand for advertising on X has declined due to the boycott, the price that remaining advertisers are willing to pay has also decreased. Additionally, the lawsuit claims that advertising prices on X "remain well below those charged by the closest competitors in the social media advertising market," suggesting that advertisers participating in the boycott are forgoing a valuable opportunity to acquire advertising space at a low cost on a platform that meets or exceeds industry brand safety standards.

This legal case is not the only indication of X's current situation, as the company's owner, Elon Musk, reportedly commented to employees in January that "user growth is stagnant, revenues are unimpressive, and we are barely reaching break-even."