Musk's X sues Lego, Nestlé, Colgate, Shell over alleged ad boycott

Elon Musk’s X has expanded its lawsuit over an alleged advertising boycott, adding prominent brands including Nestlé, Lego, Colgate-Palmolive, Pinterest, Tyson Foods, Shell, and Abbott Laboratories as defendants. The amended complaint, filed in a Texas federal court on Saturday, accuses these companies of illegally conspiring to withhold billions of dollars in advertising revenue following Musk’s acquisition of the platform in October 2022.

This legal manoeuvre is Musk’s latest gambit in the lawsuit initially filed in August which targeted the World Federation of Advertisers (WFA) and companies such as CVS and Twitch. X initially added Unilever but dropped the global consumer goods giant after an out-of-court settlement in October 2024. According to X, the WFA organised a coordinated boycott through its now-defunct Global Alliance for Responsible Media (GARM) to pressure Twitter into adopting GARM’s brand safety standards.

The complaint claims that at least 18 advertisers stopped advertising on Twitter in the US or globally, while others curbed or paused ad spend between November and December 2022, the months following Musk’s acquisition of Twitter. Musk's $44 billion acquisition of Twitter closed in October of that year.

X’s lawyers argue that the boycott violated US antitrust laws and this "collective action" unlawfully deprived the platform of critical ad revenue and restricted its ability to operate independently or compete with rival social-media platforms for ad dollars and user engagement.

“Collective action among competing advertisers to dictate brand safety standards shortcuts the competitive process and allows the collective views of a group of advertisers with market power to override the interests of consumers,” the lawsuit states.

X is seeking trebled compensatory damages—a tripling of damages under US antitrust law—and injunctive relief.

Fallout from Musk’s overhaul

Since Musk’s takeover of Twitter, the platform has undergone sweeping changes, including the reinstatement of banned accounts, the removal of content moderation teams, rebranding and the relaxation of brand safety measures.

Naturally, these actions caused widespread concern among advertisers.

Reports indicate that X has lost 50 of its top 100 advertisers since Musk took over, contributing to a sharp decline in ad revenue. X claims the alleged boycott exacerbated these losses, making it less competitive while benefiting rival platforms.

The WFA has stated it will contest the lawsuit and is confident it adhered to competition laws. It declined to comment further on the amended complaint. GARM, established by the WFA in 2019, aimed to create voluntary frameworks to ensure ads did not fund or appear alongside harmful content, such as hate speech or misinformation. X was once a member of GARM but now alleges the initiative was weaponised to enforce compliance through collective advertiser action.

GARM ceased operations in August last year, citing resource constraints after Musk’s initial lawsuit. The WFA said, "recent allegations that unfortunately misconstrue its purpose and activities have caused a distraction and significantly drained its resources and finances."

The WFA has denied any wrongdoing, asserting it followed competition laws. The organisation declined to comment on the updated complaint.

None of the recently added defendants, including Nestlé, Lego, and Shell, have publicly commented on the lawsuit. The case remains active in the Texas federal court.

A Kantar Media Reactions 2024 report paints a grim picture of X’s deteriorating reputational issues among advertisers. Trust in the platform has plummeted, with only 4% of marketers now viewing X as a brand-safe space. Confidence in its advertising has eroded sharply, dropping from 22% in 2022 to a mere 12% in 2024. A staggering 26% of marketers plan to cut their ad spending on X in 2025—marking the largest pullback of any major global platform.

Meanwhile advertisers, including IBM, Comcast, Warner Bros. Discovery, Apple, and Disney, have cautiously returned to X following the return of Trump to office. Wall Street Journal has reported that Amazon recently increased its ad spend on X after withdrawing much of it over concerns about hate speech. However, ad spend remains a shadow of its former levels. Comcast spent just under $1.5 million on the platform this year, Warner Bros Discovery allocated $1.1 million, Disney dropped to under $550,000, Lionsgate spent less than $230,000, and IBM allocated a token amount of less than $2,000.

Musk is leading the Department of Government Efficiency, a group aiming to eliminate $2 trillion in government spending. He also contributed approximately $250 million to support Donald Trump’s re-election campaign.