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On Monday, X filed a lawsuit against Media Matters for America (MMFA), a nonprofit, alleging that a recent report showing big name advertisers appearing next to antisemitic content on X was an attempt to “destroy” the company by encouraging advertisers to pull their money.
Shortly after, Texas Attorney General Ken Paxton’s office announced that it would be investigating MMFA for “potential fraudulent activity.”
Neither X nor the Attorney General’s office responded to questions about whether these moves were coordinated.
“This is a frivolous lawsuit meant to bully X’s critics into silence,” says MMFA president Angelo Carusone. “Media Matters stands behind its reporting and looks forward to winning in court.”
But it is likely not just this report from MMFA that has stopped advertisers from spending on X. Last week, Musk appeared to endorse the antisemitic “great replacement” theory in a post, leading many advertisers, including IBM and Disney, to pause or pull ads from the platform entirely. It was the latest blow to X’s shrinking ad revenues.
Early Saturday, Musk posted on X that he would file a “thermonuclear lawsuit” against Media Matters, along with a screenshot of a document in which X alleges that MMFA “misrepresented the real user experience” on the platform.
“These lawsuits quite clearly are triggered not by an offense, but by Musk losing advertisers. And it’s quite clear they’re leaving because of what he said,” claims Imran Ahmed, CEO of the Center for Countering Digital Hate (CCDH), a nonprofit watchdog group that is also being sued by X for their research. In the suit, filed in August, X alleges that CCDH had cost the company “at least tens of millions” of dollars in advertising revenue and other costs. CCDH’s reports showed how disinformation and hateful content was allegedly able to remain and circulate on X. The suit alleges that CCDH accessed the data to show this by using another nonprofit’s Brandwatch account.
“To be a victim in that lawsuit is incredibly expensive. It’s incredibly time-consuming,” says Ahmed, who estimates that CCDH has had to spend more than $250,000 in legal fees to defend itself. Ahmed worries that these types of lawsuits could have a “chilling effect” on other organizations monitoring X.
In the suit against MMFA, X claims that “99% of X’s measured ad placement has appeared adjacent to content scoring above the Global Alliance for Responsible Media’s brand safety floor”—an advertising industry standard to prevent monetization around harmful content—and that MMFA had “manipulated” the platform’s algorithm to return results that, the suit claims, are otherwise rare.
In response, X CEO Linda Yaccarino claimed that “not a single authentic user on X saw IBM’s, Comcast’s, or Oracle’s ads next to the content in Media Matters’ article.” Yaccarino added that “only 2 users saw Apple’s ad next to the content, at least one of which was Media Matters.”
But users on X have been running their own experiments, sharing screenshots of ads running next to content returned when users searched terms like “heilhitler” and “1488,” a hate symbol.
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“Holy shit. If you search HeilHitler, you get a ton of ads. I literally just got the German Government's ‘come live in Germany’ ad on the search,” user @ErinInTheMorn posted. “Media Matters was not lying.” WIRED was not able to replicate these results, and it appears as though ads are no longer running against this and similar terms.
Taking aim at nonprofits, Ahmed says, might backfire on Musk. “I think it's really important that people understand that this is a man that you're doing business with, and that if you advertise on that platform, you're essentially endorsing the behavior.”
Since Musk took the helm at X, the company has seen a steep decline in advertising revenue, which comprised about 90 percent of its revenue at the time of purchase.
One of Musk’s first moves as owner was to lay off nearly everyone at the company working on trust and safety—the roles that ensure that hate speech, disinformation, nudity, violence, and other inappropriate content are kept off the platform. And as many experts feared, hate speech did increase after Musk took over. In response, some advertisers have pulled their spend on X amid fears the platform is high-risk.
In an attempt to right the ship, X brought on now-CEO Linda Yaccarino, an experienced advertising executive from NBCUniversal. But Musk has remained the focal point of X, and though the company said in October that it was seeing some of its marquee advertisers return, a different study from MMFA found that these advertisers were spending 90 percent less than they had before Musk took over the company.
Shannon Jankowski, interim director for US free expression at the nonprofit PEN America, claims that X’s choice to file its suit in Texas is “arbitrarily choosing a venue that’s known to be conservative, that’s likely to favor Elon Musk and X.” Texas laws that prevent “strategic lawsuits against public participation,” or SLAPP lawsuits, do not apply in federal court, she adds, meaning that it will be more difficult for MMFA to get the case dismissed or recover any legal fees from X.
“It can bankrupt those organizations to try to get rid of these lawsuits,” Jankowski says.
But whether or not X’s lawsuit is successful, or the Texas Attorney General’s investigation returns anything, Jankowski worries it will hamper future accountability work. “If he can just file a frivolous lawsuit in a conservative venue, and then potentially trigger government-level investigations, it’s just really going to deter organizations from wanting to dive into this work.”
William Turton contributed reporting.
