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X Settles with Unilever Over Advertising Boycott Allegations

X's settlement with Unilever ends the company's involvement in the legal battle against advertisers accused of boycotting the platform.

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Elon Musk’s X has officially removed Unilever from its lawsuit alleging an advertising boycott. Unilever, the owner of well-known brands like Dove and Ben & Jerry’s, had previously been named in the case but is no longer a target after both parties reached an agreement. The legal battle, which continues with other companies, centers on claims that these advertisers have conspired to avoid spending on X, a decision that the platform says cost billions.

X revealed on its platform that it had resolved its dispute with Unilever, stating they will maintain their partnership. The post called it part of a broader “ecosystem-wide solution,” though it didn’t give any more details about the specifics of the settlement. Unilever itself has stayed quiet, with no official comment.

A Broader Legal Conflict Against Major Advertisers

The lawsuit, originally filed earlier this year, targets the World Federation of Advertisers (WFA) and brands linked to its Global Alliance for Responsible Media (GARM) initiative. GARM’s mission is to push brands to only advertise on platforms that meet content safety standards. X argues that this initiative effectively creates an industry-wide boycott against platforms, like itself, where content policies have raised concerns.

Despite the general nature of GARM’s approach, X insists the organization’s policies have specifically harmed its advertising revenue. It’s an ongoing legal battle, with Mars and CVS among the other brands still named in the case. GARM, in response to the lawsuit, has since disbanded, citing resource issues and claiming that the lawsuit misunderstood its objectives. X, however, continues to push forward with its legal challenges.

The Fallout From Content Moderation Policies Under Musk

Since Musk took over X (then known as Twitter), the platform has faced a mass exodus of advertisers. Musk’s more lenient approach to moderating content has raised concerns among advertisers who don’t want their brands associated with potentially harmful content.

Big names like IBM and Apple cut back on advertising when Media Matters for America reported that their ads had appeared next to extremist material. X responded by suing the nonprofit group, accusing them of damaging its business.

The platform has lost an estimated 80% of its advertising revenue since Musk’s acquisition. Though X is trying to grow its subscription model, advertising remains its primary revenue source. Musk’s aggressive stance toward critics hasn’t helped the situation, either. During a public interview, he famously told brands leaving X to “go f*** yourself,” creating further controversy.

How Advertisers React to Content Safety Issues

X’s situation isn’t unique—advertising pullouts over content issues have affected other platforms too. YouTube, for instance, went through its own “adpocalypse” in 2016, when major brands pulled ads that were appearing next to problematic videos. YouTube responded by tightening its content policies. Musk’s approach, however, has been to litigate rather than adapt.

While X is still trying to claw back its lost ad revenue, platforms like Instagram and Facebook don’t face the same risks. Their advertising base is broader, spanning small businesses as well as large corporations. Meanwhile, X relies on major brands for its ad dollars, making it more vulnerable to revenue loss if just a few companies opt to leave.

Last Updated on November 7, 2024 2:35 pm CET

Luke Jones
Luke Jones
Luke has been writing about Microsoft and the wider tech industry for over 10 years. With a degree in creative and professional writing, Luke looks for the interesting spin when covering AI, Windows, Xbox, and more.

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