It was less than a year ago that Elon Musk told advertisers who avoid his social media page X that they could permanently take their business elsewhere. In fact, he encouraged them to do so. “Don’t advertise,” he said, approving of an anti-Semitic tweet that sparked a fierce reaction. “If someone tries to blackmail me with advertising, blackmail me with money, then fuck off.”
The directive had the advantage of clarity. Everyone knew where they stood. Advertisers who felt that X had become a toxic cesspool under Musk’s ownership – or even those who simply saw the site as the wrong place to advertise soap and the like – could look elsewhere. And X would thrive or fail without them.
Now Musk has changed his mind. X has filed a lawsuit in Texas, claiming to be the victim of an “illegal boycott” by advertisers. The targets are consumer goods companies Unilever and Mars, Danish wind farm operator Ørsted and American healthcare group CVS Health, as well as an organization called Global Alliance for Responsible Media (Garm). The companies are said to have withheld “billions of dollars in advertising revenue” from X in a malicious conspiracy that violates US antitrust law.
It’s probably unwise to predict how a U.S. court might rule, but this case deserves to be thrown out because it’s ridiculous.
“No small group of people should be able to monopolize what is monetized,” argued Linda Yaccarino, X’s CEO, as if companies should be forced – by whom? – to advertise on certain media channels. Come on, you run a for-profit business like most of the rest of the media world. If you can’t drive revenue, that’s your problem. If anyone is guilty of monopolistic tendencies here, it’s X, which believes it deserves protection from everyday commercial pressures.
To see how advertisers think in practice, read the testimony of Herrish Patel, president of Unilever USA, who last month explained to a U.S. House of Representatives committee in detail how the company allocates its advertising budgets.
Unilever was affected by a previous case on Facebook, where ads for its Dove soap were placed next to posts glorifying rape and domestic violence. The company drew the understandable conclusion that it wanted to engage with “responsible” platforms that exercised more care. “Similarly, Unilever’s brands, which are trusted and speak to all Americans, are of no use to content that is divisive or politically polarizing,” Patel wrote. In 2020 – long before Musk bought Twitter, as it was said at the time – Unilever “pulled out of advertising on social media.”
Today, he said, only 20 percent of the company’s advertising goes to social media platforms and less than one percent to digital news. The majority of digital spending goes to the websites of Amazon, Walmart and Target and so on, for the boring reason that shoppers are there on the verge of making a purchase decision. This is not a conspiracy, but an advertiser weighing its commercial interests.
The House Judiciary Committee somehow swallowed the Musk-friendly statement that members of Garm had committed antitrust violations, but it’s hard to see how that conclusion fits with the facts. Garm is all about letting companies know where their digital advertising appears. The decision on what to spend money on is up to the company. “Unilever, and only Unilever, controls our advertising spend,” Patel said — a statement that, again, was meant to be completely unremarkable.
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There’s really no mystery as to why X’s sales are falling. Trust in advertisers is low and companies like Amazon are offering more for the same money. The same process is happening in the UK, where major supermarket chains are investing heavily in “retail media” and sharing data from their online activity with branded companies. X is being knocked out of the competition on the advertising front.
The company could try to help itself by investing in content moderators. But that’s all just competition. Even if X miraculously wins its attention-seeking lawsuit, advertisers will still make up their own minds about where they get the best profits and where they have what they call “brand safety.” A “defender of absolute free speech” would understand that, you would think.
