twitter ad boycott

Is it illegal to not buy ads on X? Experts explain the FTC’s bizarre ad fight.

antitrust, elon musk x, federal trade commission, First Amendment, online advertising, Policy, twitter ad boycott, x ad boycott / 9u50fv / August 22, 2025

Here’s the “least silly way” to wrap your head around the FTC’s war over X ads.

Credit: Aurich Lawson | Getty Images

After a judge warned that the Federal Trade Commission’s probe into Media Matters for America (MMFA) should alarm “all Americans”—viewing it as a likely government retaliation intended to silence critical reporting from a political foe—the FTC this week appealed a preliminary injunction blocking the investigation.

The Republican-led FTC’s determined to keep pressure on the nonprofit—which is dedicated to monitoring conservative misinformation—ever since Elon Musk villainized MMFA in 2023 for reporting that ads were appearing next to pro-Nazi posts on X. Musk claims that reporting caused so many brands to halt advertising that X’s revenue dropped by $1.5 billion, but advertisers have suggested there technically was no boycott. They’ve said that many factors influenced each of their independent decisions to leave X—including their concerns about Musk’s own antisemitic post, which drew rebuke from the White House in 2023.

For MMFA, advertisers, agencies, and critics, a big question remains: Can the FTC actually penalize advertisers for invoking their own rights to free expression and association by refusing to deal with a private company just because they happened to agree on a collective set of brand standards to avoid monetizing hate speech or offensive content online?

You’re not alone if you’re confused by the suggestion, since advertisers have basically always cautiously avoided associations that could harm their brands. After Elon Musk sued MMFA—then quickly expanded the fight by also suing advertisers and agencies—a running social media joke mocked X as suing to force people to buy its products and the billionaire for seeming to believe it should be illegal to deprive him of money.

On a more serious note, former FTC commissioner Alvaro Bedoya, who joined fellow Democrats who sued Trump for ejecting them from office, flagged the probe as appearing “bizarrely” politically motivated to protect Musk, an ally who donated $288 million to Trump’s campaign.

The FTC did not respond to Ars’ request to comment on its investigation. But seemingly backing Musk’s complaints without much evidence, the FTC continues to amplify his conspiracy theory that sharing brand safety standards harms competition in the ad industry. So far, the FTC has alleged that sharing such standards allows advertisers, ad buyers, and nonprofit advocacy groups to coordinate attacks on revenue streams in supposed bids to control ad markets and censor conservative platforms.

Legal experts told Ars that these claims seem borderline absurd. Antitrust claims usually arise out of concerns that collaborators are profiting by reducing competition, but it’s unclear how advertisers financially gain from withholding ads. Somewhat glaringly in the case of X, it seems likely that at least some advertisers actually increased costs by switching from buying cheaper ads on the increasingly toxic X to costlier platforms deemed safer or more in line with brands’ values.

X did not respond to Ars’ request to comment.

The bizarre logic of the FTC’s ad investigation

In a blog post, Walter Olson, a senior fellow at the Cato Institute’s Robert A. Levy Center for Constitutional Studies, picked apart the conspiracy theory, trying to iron out the seemingly obvious constitutional conflicts with the FTC’s logic.

He explained that “X and Musk, together with allies in high government posts, have taken the position that for companies or ad agencies to decline to advertise with X on ideological grounds,” that “may legally violate its rights, especially if they coordinate with other entities in doing so.”

“Perhaps the least silly way of couching that idea is to say that advertisers are combining in restraint of trade to force [X] to improve the quality of its product as an ad environment, which you might analogize to forcing it to offer better terms to advertisers,” Olson said.

Pointing to a legal analysis weighing reasons why the FTC’s antitrust claims might not hold up in court, Olson suggested that the FTC is unlikely to overcome constitutional protections and win its ad war on the merits.

For one, he noted that it’s unusual to mingle “elements of anticompetitive conduct with First Amendment expression,” For another, “courts have been extremely protective of the right to boycott for ideological reasons, even when some effects were anti-competitive.” As Olson emphasized to Ars, courts are cautious that infringing First Amendment rights for even a brief period of time can irreparably harm speakers, including causing a chilling effect on speech broadly.

It seems particularly problematic that the FTC is attempting to block so-called boycotts from advertisers and agencies that “are specifically deciding how to spend money on speech itself,” Olson wrote. He noted that “the decision to advertise, the rejection of a platform for ideological reasons, and communication with others on how to turn these speech decisions into a maximum statement are all forms of expression on matters of public concern.”

Olson agrees with critics who suspect that the FTC doesn’t care about winning legal battles in this war. Instead, experts from Public Knowledge, a consumer advocacy group partly funded by big tech companies, told Ars that, seemingly for the FTC, “capitulation is the point.”

Why Media Matters’ fight may matter most

Public Knowledge Policy Director Lisa Macpherson told Ars that “the investigation into Media Matters is part of a larger pattern” employed by the FTC, which uses “the technical concepts of antitrust to further other goals, which are related to information control on behalf of the Trump administration.”

As one example, she joined Public Knowledge’s policy counsel focused on competition, Elise Phillips, in criticizing the FTC for introducing “unusual terms” into a merger that would create the world’s biggest advertising agency. To push the merger through, ad agencies were asked to sign a consent agreement that would block them from “boycotting platforms because of their political content by refusing to place their clients’ advertisements on them.”

Like social media users poking fun at Musk and X, it struck Public Knowledge as odd that the FTC “appears to be demanding that these ad agencies—and by extension, their clients—support media channels that may spread disinformation, hate speech, and extreme content as a condition for a merger.”

“The specific scope of the consent order seems to indicate that it does not reflect focus on the true impacts of diminished ad buying competition on advertisers, consumers, or labor, but instead the political impact of decreased revenue flows to publishers hosting content favorable to the Trump administration,” Public Knowledge experts suggested.

The demand falls in line with other Trump administration efforts to control information, Public Knowledge said, such as the FCC requiring a bias monitor for CBS to approve the Paramount-Skydance merger. It’s “all in service of controlling the flow of information about the administration and its policies,” Public Knowledge suggested. And the Trump administration depending on “the lack of a legal challenge due to industry financial interests” is creating “the biggest risk to First Amendment protections right now,” Phillips said.

Olson agreed with Public Knowledge experts that the agencies likely could have fought to remove the terms as unconstitutional and won, but instead, the CEO of the acquiring agency, Omnicom, appeared to indicate that the company was willing to accept the terms to push the merger through.

It seems possible that Omnicom didn’t challenge the terms because they represent what Public Knowledge suggested in a subsequent blog was the FTC’s fundamental misunderstanding of how ad placements work online. Due to the opaque nature of ad tech like Google’s, advertisers started depending on ad agencies to set brand safety standards to help protect their ad placements (the ad tech was ruled anti-competitive, and the Department of Justice is currently figuring out how to remedy market harms). But even as they adapted to an opaque ad environment, advertisers, not their agencies, have always maintained control over where ads are placed.

Even if Omnicom felt that the FTC terms simply maintained the status quo—as the FTC suggested it would—Public Knowledge noted that Omnicom missed an opportunity to challenge how the terms impacted “the agency’s rights of association and perfectly legal, independent refusals to deal by private companies.” The seeming capitulation could “cause a chilling effect” not just impacting placements from Omnicom’s advertiser clients but also those at other ad agencies, Public Knowledge’s experts suggested.

That sticks advertisers in a challenging spot where the FTC seemingly hopes to keep them squirming, experts suggested. Without agencies to help advise on whether certain ad placements may risk harming their brands, advertisers who don’t want their “stuff to be shown against Nazis” are “going to have to figure out how” to tackle brand safety on their own, Public Knowledge’s blog said. And as long as the ad industry is largely willing to bend to the FTC’s pressure campaign, it’s less likely that legal challenges will be raised to block what appears to be the quiet erosion of First Amendment protections, experts fear.

That may be why the Media Matters fight, which seems like just another front with a tangential player in the FTC’s bigger battle, may end up mattering the most. Whereas others directly involved in the ad industry may be tempted to make a deal like Omnicon’s to settle litigation, MMFA refuses to capitulate to Musk or the FTC, vowing to fight both battles to the bitter end.

“It has been a recurring strategy of the Trump administration to pile up the pressure on targets so that they cannot afford to hold out for vindication at trial, even if their chances there seem good,” Olson told Ars. “So they settle.”

It’s harder than usual in today’s political climate to predict the outcome of the FTC’s appeal, Olson told Ars. Macpherson told Ars she’s holding out hope “that the DC court would take the same position that the current judge did,” which is that “this is likely vindictive behavior on the part of the FTC and that, importantly, advertisers’ First Amendment rights should make the FTC’s sweeping investigation invalid.”

Perhaps the FTC’s biggest hurdle, apart from the First Amendment, may be a savvy judges who see through their seeming pressure campaign. In a notable 1995 case, a US judge, Richard Posner, “took the view that a realistic court should be ready to recognize instances where litigation can be employed to generate intense pressure on targets to settle regardless of the merits,” Olson said.

While that case involved targets of litigation, the appeals court judge—or even the Supreme Court if MMFA’s case gets that far—could rule that “targets of investigation could be under similar pressure,” Olson suggested.

In a statement to Ars, MMFA President Angelo Carusone confirmed that MMFA’s resolve has not faded in the face of the FTC’s appeal and was instead only strengthened by the US district judge being “crystal clear” that “FTC’s wide-ranging fishing expedition was a ‘retaliatory act’ that ‘should alarm all Americans.'”

“We will continue to fight this blatant attack on our First Amendment rights because if this Administration succeeds, so can any Administration target anyone who disagrees,” Carusone said. “The law here is clear, and we are optimistic that the Circuit Court will see through this appeal for what it is: an attempt to do an end run around constitutional law in an effort to silence political critics.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Is it illegal to not buy ads on X? Experts explain the FTC’s bizarre ad fight. Read More »

Elon Musk’s “thermonuclear” Media Matters lawsuit may be fizzling out

ad boycott, censorship, Donald Trump, elon musk, federal trade commission, ftc, Policy, trump administration, Twitter, twitter ad boycott, X / Beth Washington / August 19, 2025

Judge blocks FTC’s Media Matters probe as a likely First Amendment violation.

Media Matters for America (MMFA)—a nonprofit that Elon Musk accused of sparking a supposedly illegal ad boycott on X—won its bid to block a sweeping Federal Trade Commission (FTC) probe that appeared to have rushed to silence Musk’s foe without ever adequately explaining why the government needed to get involved.

In her opinion granting MMFA’s preliminary injunction, US District Judge Sparkle L. Sooknanan—a Joe Biden appointee—agreed that the FTC’s probe was likely to be ruled as a retaliatory violation of the First Amendment.

Warning that the FTC’s targeting of reporters was particularly concerning, Sooknanan wrote that the “case presents a straightforward First Amendment violation,” where it’s reasonable to conclude that conservative FTC staffers were perhaps motivated to eliminate a media organization dedicated to correcting conservative misinformation online.

“It should alarm all Americans when the Government retaliates against individuals or organizations for engaging in constitutionally protected public debate,” Sooknanan wrote. “And that alarm should ring even louder when the Government retaliates against those engaged in newsgathering and reporting.”

FTC staff social posts may be evidence of retaliation

In 2023, Musk vowed to file a “thermonuclear” lawsuit because advertisers abandoned X after MMFA published a report showing that major brands’ ads had appeared next to pro-Nazi posts on X. Musk then tried to sue MMFA “all over the world,” Sooknanan wrote, while “seemingly at the behest of Steven Miller, the current White House Deputy Chief of Staff, the Missouri and Texas Attorneys General” joined Musk’s fight, starting their own probes.

But Musk’s “thermonuclear” attack—attempting to fight MMFA on as many fronts as possible—has appeared to be fizzling out. A federal district court preliminarily enjoined the “aggressive” global litigation strategy, and the same court issued the recent FTC ruling that also preliminarily enjoined the AG probes “as likely being retaliatory in violation of the First Amendment.”

The FTC under the Trump administration appeared to be the next line of offense, supporting Musk’s attack on MMFA. And Sooknanan said that FTC Chair Andrew Ferguson’s own comments in interviews, which characterized Media Matters and the FTC’s probe “in ideological terms,” seem to indicate “at a minimum that Chairman Ferguson saw the FTC’s investigation as having a partisan bent.”

A huge part of the problem for the FTC was social media comments posted before some senior FTC staffers were appointed by Ferguson. Those posts appeared to show the FTC growing increasingly partisan, perhaps pointedly hiring staffers who they knew would help take down groups like MMFA.

As examples, Sooknanan pointed to Joe Simonson, the FTC’s director of public affairs, who had posted that MMFA “employed a number of stupid and resentful Democrats who went to like American University and didn’t have the emotional stability to work as an assistant press aide for a House member.” And Jon Schwepp, Ferguson’s senior policy advisor, had claimed that Media Matters—which he branded as the “scum of the earth”—”wants to weaponize powerful institutions to censor conservatives.” And finally, Jake Denton, the FTC’s chief technology officer, had alleged that MMFA is “an organization devoted to pressuring companies into silencing conservative voices.”

Further, the timing of the FTC investigation—arriving “on the heels of other failed attempts to seek retribution”—seemed to suggest it was “motivated by retaliatory animus,” the judge said. The FTC’s “fast-moving” investigation suggests that Ferguson “was chomping at the bit to ‘take investigative steps in the new administration under President Trump’ to make ‘progressives’ like Media Matters ‘give up,'” Sooknanan wrote.

Musk’s fight continues in Texas, for now

Possibly most damning to the FTC case, Sooknanan suggested the FTC has never adequately explained the reason why it’s probing Media Matters. In the “Subject of Investigation” field, the FTC wrote only “see attached,” but the attachment was just a list of specific demands and directions to comply with those demands.

Eventually, the FTC offered “something resembling an explanation,” Sooknanan said. But their “ultimate explanation”—that Media Matters may have information related to a supposedly illegal coordinated campaign to game ad pricing, starve revenue, and censor conservative platforms—”does not inspire confidence that they acted in good faith,” Sooknanan said. The judge considered it problematic that the FTC never explained why it has reason to believe MMFA has the information it’s seeking. Or why its demand list went “well beyond the investigation’s purported scope,” including “a reporter’s resource materials,” financial records, and all documents submitted so far in Musk’s X lawsuit.

“It stands to reason,” Sooknanan wrote, that the FTC launched its probe “because it wanted to continue the years’ long pressure campaign against Media Matters by Mr. Musk and his political allies.”

In its defense, the FTC argued that all civil investigative demands are initially broad, insisting that MMFA would have had the opportunity to narrow the demands if things had proceeded without the lawsuit. But Sooknanan declined to “consider a hypothetical narrowed” demand list instead of “the actual demand issued to Media Matters,” while noting that the court was “troubled” by the FTC’s suggestion that “the federal Government routinely issues civil investigative demands it knows to be overbroad with the goal of later narrowing those demands presumably in exchange for compliance.”

“Perhaps the Defendants will establish otherwise later in these proceedings,” Sooknanan wrote. “But at this stage, the record certainly supports that inference,” that the FTC was politically motivated to back Musk’s fight.

As the FTC mulls a potential appeal, the only other major front of Musk’s fight with MMFA is the lawsuit that X Corp. filed in Texas. Musk allegedly expects more favorable treatment in the Texas court, and MMFA is currently pushing to transfer the case to California after previously arguing that Musk was venue shopping by filing the lawsuit in Texas, claiming that it should be “fatal” to his case.

Musk has so far kept the case in Texas, but risking a venue change could be enough to ultimately doom his “thermonuclear” attack on MMFA. To prevent that, X is arguing that it’s “hard to imagine” how changing the venue and starting over with a new judge two years into such complex litigation would best serve the “interests of justice.”

Media Matters, however, has “easily met” requirements to show that substantial damage has already been done—not just because MMFA has struggled financially and stopped reporting on X and the FTC—but because any loss of First Amendment freedoms “unquestionably constitutes irreparable injury.”

The FTC tried to claim that any reputational harm, financial harm, and self-censorship are “self-inflicted” wounds for MMFA. But the FTC did “not respond to the argument that the First Amendment injury itself is irreparable, thereby conceding it,” Sooknanan wrote. That likely weakens the FTC’s case in an appeal.

MMFA declined Ars’ request to comment. But despite the lawsuits reportedly plunging MMFA into a financial crisis, its president, Angelo Carusone, told The New York Times that “the court’s ruling demonstrates the importance of fighting over folding, which far too many are doing when confronted with intimidation from the Trump administration.”

“We will continue to stand up and fight for the First Amendment rights that protect every American,” Carusone said.

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Elon Musk’s “thermonuclear” Media Matters lawsuit may be fizzling out Read More »

Texas AG loses appeal to seize evidence for Elon Musk’s ad boycott fight

elon musk, media matter for America, online advertising, Policy, Twitter, twitter ad boycott, watchdog, X / Mike M. / May 31, 2025

If MMFA is made to endure Paxton’s probe, the media company could face civil penalties of up to $10,000 per violation of Texas’ unfair trade law, a fine or confinement if requested evidence was deleted, or other penalties for resisting sharing information. However, Edwards agreed that even the threat of the probe apparently had “adverse effects” on MMFA. Reviewing evidence, including reporters’ sworn affidavits, Edwards found that MMFA’s reporting on X was seemingly chilled by Paxton’s threat. MMFA also provided evidence that research partners had ended collaborations due to the looming probe.

Importantly, Paxton never contested claims that he retaliated against MMFA, instead seemingly hoping to dodge the lawsuit on technicalities by disputing jurisdiction and venue selection. But Edwards said that MMFA “clearly” has standing, as “they are the targeted victims of a campaign of retaliation” that is “ongoing.”

The problem with Paxton’s argument is that” it “ignores the body of law that prohibits government officials from subjecting individuals to retaliatory actions for exercising their rights of free speech,” Edwards wrote, suggesting that Paxton arguably launched a “bad-faith” probe.

Further, Edwards called out the “irony” of Paxton “readily” acknowledging in other litigation “that a state’s attempt to silence a company through the issuance and threat of compelling a response” to a civil investigative demand “harms everyone.”

With the preliminary injunction won, MMFA can move forward with its lawsuit after defeating Paxton’s motion to dismiss. In her concurring opinion, Circuit Judge Karen L. Henderson noted that MMFA may need to show more evidence that partners have ended collaborations over the probe (and not for other reasons) to ultimately clinch the win against Paxton.

Watchdog celebrates court win

In a statement provided to Ars, MMFA President and CEO Angelo Carusone celebrated the decision as a “victory for free speech.”

“Elon Musk encouraged Republican state attorneys general to use their power to harass their critics and stifle reporting about X,” Carusone said. “Ken Paxton was one of those AGs who took up the call, and his attempt to use his office as an instrument for Musk’s censorship crusade has been defeated.”

MMFA continues to fight against X over the same claims—as well as a recently launched Federal Trade Commission probe—but Carusone said the media company is “buoyed that yet another court has seen through the fog of Musk’s ‘thermonuclear’ legal onslaught and recognized it for the meritless attack to silence a critic that it is,” Carusone said.

Paxton’s office did not immediately respond to Ars’ request to comment.

Texas AG loses appeal to seize evidence for Elon Musk’s ad boycott fight Read More »

Twitch makes deal to escape Elon Musk suit alleging X ad boycott conspiracy

elon musk, online advertising, Policy, twitch, Twitter, twitter ad boycott, X / Shannon Garcia / April 9, 2025

Instead, it appears that X decided to sue Twitch after discovering that Twitch was among advertisers who directly referenced the WFA’s brand safety guidelines in its own community guidelines and terms of service. X likely saw this as evidence that Twitch was allegedly conspiring with the WFA to restrict then-Twitter’s ad revenue, since X alleged that Twitch reduced ad purchases to “only a de minimis amount outside the United States, after November 2022,” X’s complaint said.

“The Advertiser Defendants and other GARM-member advertisers acted in parallel to discontinue their purchases of advertising from Twitter, in a marked departure from their prior pattern of purchases,” X’s complaint said.

Now, it seems that X has agreed to drop Twitch from the suit, perhaps partly because the complaint X had about Twitch adhering to WFA brand safety standards is defused since the WFA disbanded the ad industry arm that set those standards.

Unilever struck a similar deal to wriggle out of the litigation, Reuters noted, and remained similarly quiet on the terms, only saying that the brand remained “committed to meeting our responsibility standards to ensure the safety and performance of our brands on the platform.” But other advertisers, including Colgate, CVS, LEGO, Mars, Pinterest, Shell, and Tyson Foods, so far have not.

For Twitch, its deal seems to clearly take a target off its back at a time when some advertisers are reportedly returning to X to stay out of Musk’s crosshairs. Getting out now could spare substantial costs as the lawsuit drags on, even though X CEO Linda Yaccarino declared the ad boycott was over in January. X is still $12 billion in debt, X claimed, after Musk’s xAI bought X last month. External data in January seemed to suggest many big brands were still hesitant to return to the platform, despite Musk’s apparent legal strong-arming and political influence in the Trump administration.

Ars could not immediately reach Twitch or X for comment. But the court docket showed that Twitch was up against a deadline to respond to the lawsuit by mid-May, which likely increased pressure to reach an agreement before Twitch was forced to invest in raising a defense.

Twitch makes deal to escape Elon Musk suit alleging X ad boycott conspiracy Read More »

Big brands are spending small sums on X to stay out of Musk’s crosshairs

advertising, elon musk, Policy, syndication, twitter ad boycott, X, x ad boycott, xAI / 9u50fv / March 31, 2025

According to data from Emarketer, X’s revenue will increase to $2.3 billion this year compared with $1.9 billion a year ago. However, global sales in 2022, when the group was known as Twitter and taken over by Musk, were $4.1 billion.

Total US ad spend on X was down by 2 percent in the first two months of 2025 compared with a year ago, according to data from market intelligence group Sensor Tower, despite the recent return of groups such as Hulu and Unilever.

American Express also rejoined the platform this year but its ad spend is down by about 80 percent compared with the first quarter of 2022, Sensor Tower said.

However, four large ad agencies—WPP, Omnicom, Interpublic Group, and Publicis—have recently agreed on deals, or are in talks, to set annual spending targets with X in so-called “upfront deals,” where advertisers commit to purchasing slots in advance.

X, WPP, Omnicom, and Publicis declined to comment. Interpublic Group did not respond to a request for comment.

Fears have risen within the advertising industry after X filed a federal antitrust lawsuit last summer against Global Alliance for Responsible Media, a coalition of brands, ad agencies, and some companies including Unilever, accusing them of coordinating an “illegal boycott” under the guise of a brand safety initiative. The Republican-led House of Representatives Committee on the Judiciary has also leveled similar accusations.

Unilever was dropped from X’s lawsuit after it restarted advertising on the social media platform in October.

Following discussions with their legal team, some staff at WPP’s GroupM now feel concerned about what they put in writing about X or communicate over video conferencing given the lawsuit, according to one person familiar with the matter.

Another advertising executive noted that the planned $13 billion merger between Omnicom and Interpublic had been delayed by a further request for information from a US watchdog this month, holding the threat of regulatory intervention over the deal.

Big brands are spending small sums on X to stay out of Musk’s crosshairs Read More »

X CEO signals ad boycott is over. External data paints a different picture.

CES 2025, Donald Trump, elon musk, linda yaccarino, online advertising, Policy, Twitter, twitter ad boycott, X / 9u50fv / January 9, 2025

When X CEO Linda Yaccarino took the stage as a keynote speaker at CES 2025, she revealed that “90 percent of the advertisers” who boycotted X over brand safety concerns since Elon Musk’s 2022 Twitter acquisition “are back on X.”

Yaccarino did not go into any further detail to back up the data point, and X did not immediately respond to Ars’ request to comment.

But Yaccarino’s statistic seemed to bolster claims that X had made since Donald Trump’s re-election that advertisers were flocking back to the platform, with some outlets reporting that brands hoped to win Musk’s favor in light of his perceived influence over Trump by increasing spending on X.

However, it remains hard to gauge how impactful this seemingly significant number of advertisers returning will be in terms of spiking X’s value, which fell by as much as 72 percent after Musk’s Twitter takeover. And X’s internal data doesn’t seem to completely sync up with data from marketing intelligence firm Sensor Tower, suggesting that more context may be needed to understand if X’s financial woes may potentially be easing up in 2025.

Before the presidential election, Sensor Tower previously told Ars that “72 out of the top 100 spending US advertisers” on Twitter/X from October 2022 had “ceased spending on the platform as of September 2024.” This was up from 50 advertisers who had stopped spending on Twitter/X in October 2023, about a year after Musk’s acquisition, suggesting that the boycott had seemingly only gotten worse.

Shortly after the election, AdWeek reported that big brands, including Comcast, IBM, Disney, Warner Bros. Discovery, and Lionsgate Entertainment, had resumed advertising on X. But by the end of 2024, Sensor Tower told Ars that X still had seemingly not succeeded in wooing back many of pre-acquisition Twitter’s top spenders, making Yaccarino’s claim that “90 percent of advertisers are back on X” somewhat harder to understand.

X CEO signals ad boycott is over. External data paints a different picture. Read More »

No judge with Tesla stock should handle Elon Musk cases, watchdog argues

elon musk, media matter for America, online advertising, Policy, Tesla, Tesla stock, Twitter, twitter ad boycott, X, x ad boycott, x corp / Mike M. / July 24, 2024

Elon Musk’s fight against Media Matters for America (MMFA)—a watchdog organization that he largely blames for an ad boycott that tanked Twitter/X’s revenue—has raised an interesting question about whether any judge owning Tesla stock might reasonably be considered biased when weighing any lawsuit centered on the tech billionaire.

In a court filing Monday, MMFA lawyers argued that “undisputed facts—including statements from Musk and Tesla—lay bare the interest Tesla shareholders have in this case.” According to the watchdog, any outcome in the litigation will likely impact Tesla’s finances, and that’s a problem because there’s a possibility that the judge in the case, Reed O’Connor, owns Tesla stock.

“X cannot dispute the public association between Musk—his persona, business practices, and public remarks—and the Tesla brand,” MMFA argued. “That association would lead a reasonable observer to ‘harbor doubts’ about whether a judge with a financial interest in Musk could impartially adjudicate this case.”

It’s still unclear if Judge O’Connor actually owns Tesla stock. But after MMFA’s legal team uncovered disclosures showing that he did as of last year, they argued that fact can only be clarified if the court views Tesla as a party with a “financial interest in the outcome of the case” under Texas law—“no matter how small.”

To make those facts clear, MMFA is now arguing that X must be ordered to add Tesla as an interested person in the litigation, which a source familiar with the matter told Ars, would most likely lead to a recusal if O’Connor indeed still owned Tesla stock.

“At most, requiring X to disclose Tesla would suggest that judges owning stock in Tesla—the only publicly traded Musk entity—should recuse from future cases in which Musk himself is demonstrably central to the dispute,” MMFA argued.

Ars could not immediately reach X Corp’s lawyer for comment.

However, in X’s court filing opposing the motion to add Tesla as an interested person, X insisted that “Tesla is not a party to this case and has no interest in the subject matter of the litigation, as the business relationships at issue concern only X Corp.’s contracts with X’s advertisers.”

Calling MMFA’s motion “meritless,” X accused MMFA of strategizing to get Judge O’Connor disqualified in order to go “forum shopping” after MMFA received “adverse rulings” on motions to stay discovery and dismiss the case.

As to the question of whether any judge owning Tesla stock might be considered impartial in weighing Musk-centric cases, X argued that Judge O’Connor was just as duty-bound to reject an improper motion for recusal, should MMFA go that route, as he was to accept a proper motion.

“Courts are ‘reluctant to fashion a rule requiring judges to recuse themselves from all cases that might remotely affect nonparty companies in which they own stock,'” X argued.

Recently, judges have recused themselves from cases involving Musk without explaining why. In November, a prior judge in the very same Media Matters’ suit mysteriously recused himself, with The Hill reporting that it was likely that the judge’s “impartiality might reasonably be questioned” for reasons like a financial interest or personal bias. Then in June, another judge ruled he was disqualified to rule on a severance lawsuit raised by former Twitter executives without giving “a specific reason,” Bloomberg Law reported.

Should another recusal come in the MMFA lawsuit, it would be a rare example of a judge clearly disclosing a financial interest in a Musk case.

“The straightforward question is whether Musk’s statements and behavior relevant to this case affect Tesla’s stock price, not whether they are the only factor that affects it,” MMFA argued. ” At the very least, there is a serious question about whether Musk’s highly unusual management practices mean Tesla must be disclosed as an interested party.”

Parties expect a ruling on MMFA’s motion in the coming weeks.

No judge with Tesla stock should handle Elon Musk cases, watchdog argues Read More »