Elon Musk’s X has expanded its legal battle, now targeting Amazon-owned livestreaming platform Twitch as part of its lawsuit against former advertisers.
On Monday, Twitch was added to X's ongoing lawsuit against brand members of the now-defunct Global Alliance of Responsible Media (GARM), as first reported by Business Insider. X claims in its lawsuit that members of GARM illegally conspired to boycott the platform formerly known as Twitter in late 2022, shortly after Musk acquired the company.
According to the lawsuit, X says that Twitch has not advertised on the platform in the U.S. since November 2022. As Business Insider reports, X cites a GARM document in its lawsuit that mentions an "executive endorsement" from Twitch regarding GARM's brand safety standards.
X originally filed the lawsuit back in August. Since then, the World Federation of Advertisers (WFA) disbanded the coalition of advertisers known as GARM. In addition, X removed Unilever from the lawsuit after reaching an undisclosed agreement with the company.
Regardless of the closure of the GARM initiative, WFA says it intends to fight the allegations in court.
X is still hurting thanks to declining ad revenue
X's lawsuit against GARM came shortly after the coalition chose to bring X back into the fold. One month before filing the suit, X touted that GARM had reinstated X back into the initiative.
Making matters worse for X, the company still hasn't been able to fix its advertiser failings.
According to official X documents obtained by Bloomberg in June 2024, X's revenue fell by nearly 40 percent in the first half of 2023, a period of time entirely under Musk's leadership. This was before Musk infamously told advertisers to "go f*** yourself" in November 2023. Musk said this after a number of major brands like Disney and Apple stopped advertising in response to Musk's endorsement of an antisemitic conspiracy theory and a report revealing ads being displayed alongside Nazi content on the platform.
Some advertisers have recently returned to X, seeking to curry favor with Musk following Donald Trump's election win. However, the advertising spend from these brands fell significantly compared to previous levels. According to analytics firm Sensor Tower, the ad spend from X's top 100 advertisers was only one percent more than it was from this time last year, which was around the same time as the aforementioned advertiser boycott.
Furthermore, ad spend from X's top advertisers is still down a whopping 64 percent, according to Sensor Tower, when compared to this time in 2022. That would mean that X's ad revenue is doing worse now than it was in the same time period that X claims GARM conspired to boycott the company.
Things don't seem to me improving over X either. In September, multiple reports found that X was facing a declining daily active user base in some of its top markets like the U.S., UK, and EU. Following Musk's involvement in Trump's reelection, X has also been facing a mass user exodus. X competitors Bluesky and Threads have seen millions of new users as a result.
Regardless how X's lawsuit against Twitch, Mars, CVS Health, and other former coalition members of GARM unfolds, Musk's company faces numerous ad revenue challenges in the months ahead.
