X drops Unilever from lawsuit after reaching new ad deal

Unilever has been removed from X's antitrust lawsuit after reaching a new advertising agreement with the social media platform. The settlement allows the two companies to continue their partnership.

X is pleased to have reached an agreement with Unilever and to continue our partnership with them on the platform. Today’s news is the first part of the ecosystem-wide solution and we look forward to more resolution across the industry.

— News (@XNews) October 11, 2024

The lawsuit, filed by the platform in August, accuses the Global Alliance for Responsible Media (GARM), its coordinating body, the World Federation of Advertisers (WFA), and several major brands, including Mars, CVS Health, and Orsted, of orchestrating a group boycott against the platform. The boycott allegedly caused significant revenue losses for the platform.

The platform claims, that GARM advised its members to boycott the platform based on political ideology rather than the stated brand safety concerns. The platforms' legal case centres on the influence GARM holds, as its members control 90% of U.S. ad spending.

While Unilever has not commented on the terms of the settlement, it acknowledged that the platform had committed to ensuring the safety and performance of its brands on the platform, addressing the company's responsibility standards. The platform continues to pursue legal action against other defendants in the case, seeking damages for what it argues is an unfair competitive advantage gained through GARM’s alleged coordinated boycott.

GARM, long considered a leader in advocating for responsible content moderation, has paused its operations pending a verdict in the case, focusing its resources on defending itself against X’s claims.

The outcome of this case could have significant ramifications for the relationship between advertisers and digital platforms, particularly regarding how market forces, such as brand safety, dictate ad spending. 

X saw a drop in ad revenues following Elon Musk's acquisition in 2022, as advertisers grew cautious of potential brand association with harmful content on the platform.