Elon Musk accuses Amazon's Twitch of conspiring with other companies to boycott advertising on X

Elon Musk's platform X is intensifying its legal battle against entities it alleges participated in an advertising boycott. This week, X added Twitch as a defendant in an ongoing lawsuit originally filed in August 2024. The suit claims that members of the now-defunct Global Alliance for Responsible Media (GARM), including the streaming platform, conspired to withhold billions in advertising revenue from X.

The Tesla CEO took over X (formerly Twitter) in 2022 to relax the platform's content moderation rules, reduce spam, introduce new features, and increase transparency about the algorithms that drive content promotion.

Now, X alleges that the GARM conspiracy led to billions of dollars in losses, particularly during the critical period between November and December 2022, following Musk's acquisition of Twitter.

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X's lawsuit against Twitch: Details explored

In the case of Twitch, X alleges that the company drastically reduced its advertising spending on the platform, particularly in the U.S., where it has reportedly made no significant purchases since late 2022.

The lawsuit further cites GARM documents that suggest the streaming platform had officially endorsed the alliance's brand safety standards, presenting this as evidence of coordination to boycott advertising on X.

This lawsuit comes amidst rumors of an "adpocalypse" on Twitch, which happens when advertisers pull out commercials from a platform, mainly to avoid being associated with controversy. Now it seems X is facing its own adpocalypse, which may be a motive behind the lawsuit.

The stakes of this lawsuit extend beyond the immediate parties involved. Elon Musk’s platform has faced significant challenges in restoring its advertising revenue, which declined sharply amid growing concerns from advertisers about content moderation and brand safety.

It should be noted that X is a hub for streamer-related clips, with many Twitch streamers use as a tool to share stream highlights and announcements. This consequentially drives traffic to Twitch, acting as an indirect promotion.

This legal battle could have wide-reaching implications for the digital advertising industry, especially regarding how companies navigate collective initiatives like GARM. It also raises questions about the sustainability of such alliances when faced with significant legal and financial pressures.

For X, the outcome represents a crucial juncture in Musk’s efforts to reshape the platform’s business model and recover from the controversies that have plagued it since his takeover.

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X has its own streaming service as well, and in June 2024, Elon Musk encouraged streamers to multi-stream on his website.