Musk’s Twitter ‘Boycott’ Lawsuit Is a ‘Hideous Joke’: Former FTC Official
Elon Musk‘s X Corp., the remains of what used to be Twitter Inc., has filed yet another dubious lawsuit in an effort to stem the financial damage wrought by its impetuous owner. This time, the company is going after a cohort of advertisers, whom he famously told to “Go fuck yourself” in an unhinged interview at a business conference less than a year ago, because they continue to want nothing to do with his rotted social platform.
In an unusual move, X CEO Linda Yaccarino shared an open letter and a video of herself addressing X users and advertisers in order to directly explain the rationale behind the suit. The statements accused the Global Alliance for Responsible Media (GARM), an initiative of the World Federation of Advertisers aimed at reducing the monetization of harmful or illegal digital content, of orchestrating an “illegal boycott” of X and other companies. Rumble, a video streaming site drenched in far-right conspiracy theories, hate speech, and misinformation, announced that it was joining X’s suit, which targets GARM and WFA, along with member brands Unilever, CVS Health, Mars, and Ørsted, a Danish energy company.
“We tried peace for 2 years, now it is war,” Musk tweeted, in his characteristically grandiose fashion, when he shared Yaccarino’s comments. He also tweeted, in response to Rumble declaring its legal alliance with X, “Everyone who has been boycotted should file a lawsuit in every country they’ve been boycotted.”
That litigious attitude is nothing new. The plummet in crucial ad revenue as brands fled X/Twitter due to a surge in right-wing extremist content after Musk’s 2022 takeover — with some misinformation and antisemitic content amplified by Musk himself — has led to legal actions against the watchdog groups taking note of the toxic atmosphere. One lawsuit targeted the Center for Countering Digital Hate, which had documented the rise in hate speech; a judge dismissed the case in March, with harsh words about how X Corp. had sought to punish the organization for exercising free speech (a right that Musk claims to champion). Another suit took aim at Media Matters for America, which had demonstrated how paid ads were appearing alongside X posts from neo-Nazis and white nationalists. That case, deemed “bogus” by legal commentators, fell to District Judge Reed O’Connor, a conservative Texas judge known for partisan decisions who also happens to be an investor in Tesla, the automaker of which Musk is CEO. It’s slated to go to trial in April 2025.
The new 44-page complaint against the advertiser coalition was likewise filed in the U.S. District Court for the Northern District of Texas, presumably seen as a favorable venue for X Corp. — in fact, because it went to the Wichita Falls division, it is guaranteed to end up before Judge O’Connor as well. It alleges a GARM “conspiracy” to “collectively withhold billions of dollars in advertising revenue” from the company. The filing cites a report issued last month by the House Judiciary Committee, chaired by far-right Rep. Jim Jordan, to the effect that GARM and WFA have colluded to “demonetize disfavored content” in a way that “is likely illegal under the antitrust laws and threatens fundamental American freedoms.”
Perhaps not coincidentally, X Corp. is represented in the matter by Dhillon Law Group, the firm of Harmeet Dhillon, a California lawyer known for filing suits challenging Covid-19 safety measures in 2020 and serving as a legal adviser to the Trump campaign. While votes were still being counted in that presidential election, Dhillon called for the Supreme Court to intervene and deliver Trump a second term.
GARM did, in fact, encourage members to pause ad spending on X in light of proliferating extremism and the reinstatement of many accounts that had been banned for hate speech and misinformation prior to Musk’s purchase of the app. Some withdrew from the platform altogether, while others greatly reduced expenditures there. With its main cash flow drying up, X lowered the cost of ads, courting smaller brands, yet the larger partners have not returned to take advantage of this bargain, and some marketing analysts say the investment still isn’t worth it.
The Federal Trade Commission uses antitrust laws to enforce against illegal group boycotts, which is the terminology X Corp.’s lawsuit applies to the desertion of various brands from the platform. However, the agency notes: “A business can always unilaterally choose its business partners.” The FTC would be able intervene in situations where a collection of companies are organizing to harm competition — by price-fixing, for example. It’s likewise against the law for a group of competitors to enact a boycott in order to quash an individual rival in the market. And it’s possible for an advertiser boycott to be illegal, as when car dealerships in a California county allegedly agreed to pull their ads from a local newspaper after it published a guide to help consumers negotiate a better price when buying a car.
“From a legal perspective, the complaint isn’t frivolous — group boycotts can violate antitrust law, and the complaint does a decent job of laying out specific communications and actions that suggest coordination intended to hurt X’s businesses,” says Robert Freund, a Los Angeles attorney who works with brands and agencies on social media marketing issues. “But I don’t think the claims are strong. I expect that WFA and the other defendants will argue that they acted in the interest of legitimate industry self-regulation and based on brand safety concerns, given Musk’s highly controversial public persona.” (There is already plenty of speculation, of course, that his “Go fuck yourself” outburst and personal attacks on Disney CEO Bob Iger would play well in court for the advertisers.)
“I think the better argument is that these advertisers decided to protest Musk and his behavior, and that’s exactly what X itself alleged happened,” Freund says, pointing to a section of the complaint quoting a communication from GARM co-founder Rob Rakowitz in which he explains that Unilever had concerns about “overtly partisan takes” on X, such as claims related to the Hunter Biden laptop controversy. In late 2022, Musk went to great lengths to prove and sensationalize what he characterized as censorship of the story by previous Twitter leadership. (He did not have any particular success in this endeavor.)
“Boycotts based on protest generally are protected by the First Amendment,” Freund observes. “And that’s the real irony here: for all of Musk’s proclamations about free speech, he has a habit of mistaking freedom of speech for freedom from consequences of speech.”
“This is a hideous joke,” says David Balto, a Washington, D.C., antitrust lawyer and policy director at the FTC from 1998 to 2001, of the X Corp. lawsuit. “The antitrust laws are a cruel and blunt weapon in the hands of someone irresponsible, they can do a lot of harm, but there’s no conceivable way,” he says, that Yaccarino and Musk can plausibly claim a boycott violation: “It sounds like Elon Musk is engaging in a fantasy world of antitrust.”
Balto explains that the suit is “totally inconsistent with past FTC actions, which are very limited.” As the agency’s policy director, he was “the person who made decisions about whether or not certain actions were worth investigating and were anti-competitive,” and he sees little chance of the suit surviving a motion to dismiss. Associations such as the WFA, he notes, have “broad leeway to police products and make sure consumers are not taken advantage of and deceived,” with years of precedent holding that “this kind of conduct falls within a safe harbor and is not subject to antitrust scrutiny.”
“It’s not a question of whether or not Twitter lost some money,” Balto says. “It’s a question of whether or not Twitter was competitively disadvantaged by their actions. There’s no evidence in this complaint that they were competitively disadvantaged. This complaint doesn’t even get into the batter’s box, much less get the chance to strike out.” Moreover, he considers the House Judiciary Report referenced in the suit to be “simply a farce,” saying, “they didn’t do any extensive investigation, and I don’t think it holds water.” He notes that the committee has done “practically nothing in antitrust for a while, so this letter comes totally out of the blue.”
John Newman, deputy director of the FTC’s Bureau of Competition from 2021 to 2023 and now a professor at the University of Miami School of Law who specializes in antitrust, thinks the suit actually has a chance of success. “This area of antitrust is actually pretty unsettled, and courts go back and forth,” he says. “A lot of antitrust experts are pooh-poohing this, but I’m not so sure.” It helps, he adds, that X Corp. apparently “did some judge-shopping to try to get the right judge.”
The law, Newman says, doesn’t prohibit true boycotts, “when a group bands together and pulls an economic lever in one market in order to change something else.” But he doesn’t see GARM’s actions that way. “Here, the advertisers are allegedly banding together and putting pressure on a seller to change that seller’s behavior toward those advertisers in the advertising market,” he says, and this could be considered illegal. “If X gets past a motion to dismiss and wins at trial — years down the road — it could first and foremost collect money damages,” Newman says. “The lawsuit alleges a serious drop in revenue due to the agreement. And whatever the actual harm is would get automatically tripled.” The court might even order GARM to “stop agreeing together which platforms they’ll do business with,” or, in the most extreme outcome, have it dissolved entirely.
Whether or not Musk and Yaccarino have any real confidence in this legal strategy, there seems to be something desperate about their tweets and statements hyping the suit. It’s possible, too, that Musk cares less about their chances of winning than the dramatic headlines and the opportunity to declare “war” on his social media platform. To date, X hasn’t been able to sue its way out of the hole that he put it in; at some point, there will be no one left to blame. Until then, apparently, Musk can keep burning through his enemies list.
