In a dramatic escalation of legal battles against prominent companies, Elon Musk’s platform X (formerly Twitter) has filed a high-stakes lawsuit against the Danish toy giant Lego, along with major global corporations such as Nestlé, Shell International, Colgate-Palmolive, Tyson Foods, Abbott Laboratories, and Pinterest. The lawsuit alleges that these companies participated in an illegal advertising boycott that began shortly after Musk’s takeover of Twitter in 2022.
Background and allegations
According to NPR, the lawsuit contends that a coordinated group of advertisers—initially organized under the World Federation of Advertisers (WFA) and its division, the Global Alliance for Responsible Media (GARM)—collectively halted their purchases of advertising space on X. This coordinated action allegedly cost the platform billions of dollars in revenue and disrupted its competitive operations.
Filed in a federal court in Texas, the legal complaint claims that the advertising boycott was not an isolated incident but rather part of a broader, systematic effort. As NPR reports, the suit was amended early on Saturday to include several new defendants, with Lego emerging as one of the high-profile targets. The expansion of the lawsuit underscores the allegation that this issue spans an entire industry rather than a dispute with a single entity.
The core of the complaint
The lawsuit argues that, in a competitive market, social media platforms like X should have the freedom to set their own brand safety standards without being subjected to collective pressure from advertisers. As stated in the complaint:
“Collective action among competing advertisers to dictate brand safety standards to be applied by social media platforms shortcuts the competitive process and allows the collective views of a group of advertisers with market power to override the interests of consumer.”
This direct quote reinforces Musk’s legal team’s position that such coordinated actions by advertisers are not only unfair but also detrimental to the dynamics of digital advertising.
The exodus from X
Since Musk’s acquisition and the subsequent rebranding of Twitter to X, the platform has undergone significant changes in both operational policies and content moderation strategies.
The decision by brands to withdraw their advertising investments is not an isolated phenomenon. In recent years, a broad exodus from Twitter has unfolded, with numerous brands, media outlets, public figures, and individual users choosing to abandon the platform.
This mass departure intensified after Elon Musk publicly supported far-right political campaigns, including endorsing Donald Trump in the USA and the Alternative for Germany (AfD) in Germany. These controversial political endorsements further alienated advertisers and users alike, accelerating a decline in X’s market value.
This collective exit, bolstered by high-profile political controversies and concerns over brand safety, has significantly undermined investor confidence in X/Twitter. The convergence of these factors is reshaping the digital advertising landscape, posing critical challenges to the future stability and market position of X.
