Musk and X Corp. CEO Linda Yaccarino addressed this issue publicly. They allege these advertisers conspired to withhold billions in revenue following Musk’s acquisition of the platform in 2022. According to Yaccarino, since her arrival at X, user growth has surged by 25% since August 2022. Despite this, the advertisers allegedly ignored these facts and chose to boycott.
- Alleged Boycotts: Musk and X Corp. CEO Linda Yaccarino accuse major advertisers of conspiring to reduce revenue on X following Musk’s 2022 acquisition, citing a potential revenue loss in the billions.
- Judiciary Committee Report: A July report from the U.S. House Judiciary Committee highlights GARM’s alleged influence on advertisers and claims the group used boycotts to limit consumer choices by demonetizing targeted content.
- Revenue Drop: X experienced a nearly 60% advertising revenue decline between April and May 2023, with companies like Apple, Amazon, and Disney citing concerns about misinformation and hate speech on the platform.
- Musk’s Response: Musk signaled a more aggressive approach to address the issue, stating, “We tried peace for 2 years, now it is war,” as the lawsuit potentially redefines the social media-advertising industry relationship.
The U.S. House of Representatives Judiciary Committee released a report in July highlighting GARM’s impact on online speech. The report claims that GARM organized boycotts and used tactics to target platforms, creators, and news organizations. This effort, they say, aimed to limit consumer choices by demonetizing certain content. X’s advertising revenue reportedly dropped by nearly 60% between April and May 2023. Major companies like Apple, Amazon, and Disney have either decreased or paused their advertising on X, citing concerns over misinformation and hate speech.
Musk emphasized the importance of maintaining a dynamic and safe environment for advertisers and users. Despite numerous meetings and research efforts, many companies have dismissed the facts. Musk declared, “We tried peace for 2 years, now it is war.” This lawsuit could significantly impact the advertising industry and its relationship with social media platforms.