Elon Musk's social media platform X (formerly Twitter) has filed a lawsuit against Amazon-owned live streaming platform Twitch. The lawsuit alleges that other companies, including Twitch, are illegally conspiring to block ads on X.
Twitch was added to the lawsuit filed against the advertisers last Monday. The case was first filed in August this year. The complaint alleges that members of the Global Alliance of Responsible Media (GARM) illegally conspired to “lock up billions of dollars in Twitter's ad revenue.” The organization was governed by the World Federation of Advertisers (WFA).
A small non-profit initiative is—GARM. But it was closed within days of the original case being filed. The WFA is still challenging the case. At the time, the WFA said it did not have sufficient resources to continue GARM's operations amid the intensity of the legal battle.
The World Federation of Advertisers disbanded the alliance of advertisers known as GARM following the lawsuit. In addition, the company removed Unilever from the case after reaching an undisclosed settlement with X.
X claims in the lawsuit that members of GARM illegally conspired to boycott the former Twitter platform in late 2022. Shortly after, Musk acquired the company.
The lawsuit also states that Twitch has not run any ads on the platform in the United States since November 2022.
Despite the closure of the GARM initiative, the WFA said it would fight the allegations in court.
Elon Musk filed this lawsuit against GARM after deciding to reinstate X to its membership. A month before the lawsuit was filed, X announced that GARM had taken the company back into the venture.
X has yet to resolve issues with its advertisers. As a result, the income of the platform is decreasing.
According to an X filing last June, X's revenue fell by nearly 40 percent in the first half of 2023. The platform was led by Musk at this time.In 2023, Musk endorsed an anti-Semitic conspiracy theory on the X platform and ads with Nazi-related content were displayed on the platform. In response, various companies stopped advertising on it.
Some advertisers have recently returned to X to improve relations with Musk after Donald Trump's election victory. However, ad spend on these brands' platforms has dropped significantly compared to earlier. Ad spending by X's top 100 advertisers was just one percent higher than this time last year, according to analytics firm Sensor Tower.
On the other hand, compared to the same period in 2022, the ad spend of Xe's top advertisers is now down 64 percent. So X is blaming GARM for the decline in ad revenue.
Last September, multiple reports revealed that X's daily active users were declining in the US, UK and EU markets. X is heavily involved in Trump's election campaign. As a result, users are moving away from X to microblogging platforms like BlueSky and Threads.
Source: Business Insider and Mashable
