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In a dramatic turn of events within the X versus advertisers lawsuit, Unilever has been removed from the lawsuit after coming to an agreement with X.
For context, earlier this year, Elon Musk’s X (previously Twitter) filed a lawsuit against several former advertisers, claiming they coordinated an illegal advertising boycott against the platform. This legal action comes on the heels of a significant advertiser exodus, driven largely by concerns over their ads appearing next to harmful or inappropriate content.
For a platform that benefits from brand accounts as revenue and reputation markers, X needs to figure out how to get brands back on board to hit revenue needs and shift the lingering negative brand sentiment as a social media platform and advertising channel.
Brand safety on X remains a big issue
Since Musk took over X, the platform has struggled with brand safety issues, prompting many advertisers to withdraw. A pointed reaction from Musk in December to the advertisers involved in the boycott failed to win them back. Instead, X’s recent lawsuit further alienates these brands and raises critical questions about the intent behind involving the Global Alliance for Responsible Media (GARM) and other advertiser groups in its legal strategy.
GARM, a not-for-profit coalition aimed at setting standards for brand safety, was accused of inciting an “advertiser boycott.” The lawsuit appears to be part of X’s broader drive to recover lost revenue, yet many experts doubt it will lure advertisers back. Instead, X’s legal actions suggest an unwillingness to address the underlying issues of brand safety and content moderation that have hindered the platform. GARM has since disbanded, citing that the recent allegations have significantly drained its resources and finances.
The ripple effect of Unilever’s agreement
So what does the latest news of Unilever’s agreement with X mean for the lawsuit and the future of X’s advertising relationships?
Unilever, a Fortune Global 500 brand, carries weight and could influence other brands to follow suit. Following this news, there could reasonably be calls to engage with the X legal team to negotiate and find out what the agreement was, since “if it’s good enough for Unilever, it’s good enough for us” could easily be put in a Slack message right now as others in the lawsuit figure out how to proceed.