Elon Musk’s X has taken legal action against Amazon-owned Twitch, alleging that the livestreaming platform has boycotted advertising on X since November 2022. Twitch is the latest target in X’s lawsuit, initially filed in August, against advertisers associated with the now-defunct Global Alliance for Responsible Media (GARM).
According to Business Insider, Twitch was officially added to the lawsuit on Monday. X accuses GARM members of conspiring to boycott the platform shortly after Musk’s acquisition. The lawsuit cites a GARM document suggesting Twitch executives endorsed the coalition’s brand safety standards, which X claims unfairly excluded the platform.
Twitch, which has not advertised on X in the U.S. since Musk’s takeover, joins other defendants like Mars and CVS Health in the lawsuit. X has already removed Unilever from the case after reaching a private settlement. Despite GARM’s dissolution earlier this year, its parent organization, the World Federation of Advertisers (WFA), has vowed to defend itself in court.
Advertising Woes Plague X
X’s legal moves come amid declining ad revenue and user engagement on the platform. Internal documents obtained by Bloomberg revealed a 40% drop in revenue during the first half of 2023 under Musk’s leadership. Advertisers like Disney and Apple pulled back after Musk endorsed controversial statements and reports emerged of ads appearing next to extremist content.
Although some brands have returned to X, their spending remains far below previous levels. Analytics firm Sensor Tower reports that ad spend by X’s top 100 advertisers rose only 1% compared to last year, while still down 64% from 2022 levels.
User Exodus and Competitive Pressures
Adding to its challenges, X has seen its daily active users decline in major markets like the U.S., UK, and EU. Competitors such as Bluesky and Threads are gaining traction, fueled by discontent over Musk’s involvement in political controversies, including his support for Donald Trump’s re-election.
As X continues its lawsuit against Twitch and other former GARM members, the company faces mounting obstacles in stabilizing its advertising revenue and user base.
