WEB DESK: Elon Musk’s controversial social media platform, X (formerly Twitter), started legal action against streaming giant Twitch and several other advertisers.
In the lawsuit, Twitch and other advertisers have been accused of engaging in ‘anticompetitive’ practices. The lawsuit was originally filed in August and arises from significant advertiser boycott that occurred in 2022 during the tumultuous takeover by Musk’s leadership.
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The boycott was reportedly triggered by concerns regarding Musk’s management of the platform, including an increase in hate speech and the subsequent withdrawal of several brands and advertising agencies.
The lawsuit claims that the Global Alliance for Responsible Media (GARM) played an important role in starting the boycott.
GARM is an initiative created by the World Federation of Advertisers (WFA).
X’s legal team claims that Twitch, along with other companies, colluded to withhold substantial advertising revenue from the platform.
The lawsuit alleges that this ‘marked departure’ from previous advertising practices has continued since the boycott.
Reports indicate that Twitch has not purchased any ads on X in the United States since 2022.
Musk’s involvement in political campaign, particularly with convicted felon and president-elect Donald Trump, increased his influence, yet X continues to face issues in regaining the trust of advertisers who have been cautious about the platform’s direction.
Although Musk’s platform made ‘efforts’ to improve ‘transparency’ in its moderation policies and introduced premium advertising products, it is expected to encounter ongoing difficulties in attracting advertising budgets in coming years.
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The outcome of the lawsuit could provide X with a superficial victory, similar to the closure of GARM. However, Twitch’s cautious approach to advertising on the platform suggests that many advertisers will not relent.