The short version
- X has asked the Fifth Circuit Court of Appeals to overturn a lower court ruling that dismissed its antitrust lawsuit against major advertisers.
- The company recently settled with the World Federation of Advertisers but maintains claims against other corporate defendants including Mars, CVS Health, and Nestle.
- Financial disclosures from parent company SpaceX show advertising revenue for X has declined significantly compared to both the previous year and pre-acquisition levels.
X is pursuing a renewed legal challenge against a coalition of advertisers it accuses of orchestrating an illegal boycott, asking a federal appeals court to reverse a recent dismissal. The social media platform filed new arguments with the U.S. Court of Appeals for the Fifth Circuit, seeking to revive portions of its antitrust case despite having reached a settlement with one of the primary defendants just last week. This move signals that Elon Musk’s company intends to continue litigating what it describes as a concerted effort by competitors and industry groups to suppress its market position through collective action.
The original lawsuit was dismissed in March by U.S. District Judge Jane Boyle, who ruled that the advertisers had not violated antitrust laws. Judge Boyle, appointed by George W. Bush, determined that the harm X alleged stemmed from customers choosing competitors rather than from an unlawful restraint of trade. She cited legal precedent establishing that losses resulting from competition itself do not constitute antitrust injury. Despite this ruling, X contends that the boycott distorted market forces and allowed rival platforms to charge above-competitive rates.
In its latest filing, X characterized the alleged conduct as an unusually brazen group boycott that has attracted attention from regulators and Congress. The company argues that the defendants eliminated independent decision-making among advertisers, thereby suppressing competitive rivalry. According to X, this collusion insulated the boycott from normal market pressures and caused massive economic losses. The platform maintains that there is no valid reason to prevent it from recovering damages for what it views as a direct victimization by these corporate actors.
The legal dispute centers on the Global Alliance for Responsible Media, an initiative created by the World Federation of Advertisers to establish brand safety guidelines. X claims that GARM exercised collective power by requiring members to adopt specific solutions and enforce standards across social media platforms. Although the ad industry shut down GARM after Musk filed the initial lawsuit in 2024, X argues that the prior agreement among advertisers constituted an unreasonable restraint on trade. Law professors have previously described X’s legal standing as weak, noting the difficulty in proving antitrust violations based on advertiser preferences.
While X agreed to dismiss the World Federation of Advertisers from the case following a recent settlement, it is urging the appeals court to reinstate claims against several other defendants. These include major corporations such as Mars Incorporated, CVS Health, Nestle, Abbott Laboratories, Colgate-Palmolive, Lego, Pinterest, Tyson Foods, Shell, and Ørsted A/S. The company asserts that these entities wield significant power within their respective markets and that their coordinated withdrawal of advertising support injured both X and broader competition in the digital advertising space.
The financial context of this legal battle is underscored by recent earnings reports from SpaceX, which now owns X as a subsidiary. Following its public listing, SpaceX disclosed that X generated $367 million in advertising revenue during the second quarter of 2026. This figure represents a decline from the $426 million reported in the same period of 2025. For the first six months of 2026, total ad revenue stood at $710 million, down from $870 million during the comparable timeframe the previous year.
These current figures pale in comparison to the platform’s performance before Musk acquired Twitter in October 2022. In the second quarter of 2022, Twitter reported advertising revenue of $1.08 billion. This means that X’s current quarterly ad income is approximately $713 million lower than it was just prior to the acquisition. The sharp drop in revenue coincides with major changes to content moderation policies under Musk’s ownership, which led many advertisers to withdraw their spending.
Advertisers had expressed concerns that their brands might appear alongside antisemitic posts, misinformation, and other objectionable content following the takeover. This shift in brand safety perceptions contributed to a sustained decrease in advertising demand. While specific historical data was obscured when Musk took the company private, the recent public filings provide a clearer picture of the financial impact. The ongoing litigation reflects X’s attempt to attribute these revenue losses to illegal collusion rather than market response to content policy changes.
The outcome of this appeal could have significant implications for how antitrust laws are applied in the digital advertising sector. If the Fifth Circuit reverses Judge Boyle’s decision, it may set a precedent for holding advertisers accountable for collective decisions that reduce spending on specific platforms. Conversely, if the dismissal stands, it would reinforce the principle that consumer and advertiser choice, even when coordinated through industry groups, does not necessarily violate antitrust statutes. The case remains active as the appeals court considers X’s request to proceed with claims against the remaining corporate defendants.
Sources behind this briefing
Go to the original reporting
- Ars Technica↗X wants to keep suing advertisers, asks 5th Circuit to overrule district judge
