Turns Out That Advertisers Not Wanting To Fund Neo-Nazi-Adjacent Content Isn’t An Antitrust Violation

from the it-was-always-a-shakedown dept

Remember when Elon Musk told advertisers to “go fuck” themselves and then sued them for the crime of taking his advice? A federal judge has now dismissed that lawsuit — with prejudice — confirming what anyone with a passing familiarity with antitrust law already knew: companies deciding they don’t want their brands plastered next to extremist content aren’t engaged in an illegal conspiracy. They’re just making basic (probably pretty smart) business decisions.

When X Corp filed this case back in August of 2024, we walked through in great detail why the legal theory was fundamentally broken. Not broken in a “they pleaded it badly” kind of way, but broken in a “this theory does not describe an antitrust violation no matter how many drugs you’re taking or how convinced you are that the world owes you advertising dollars” kind of way. Judge Jane Boyle of the Northern District of Texas has now agreed, and the key section of her ruling is worth reading in full, because it says what we said at the outset: X has not suffered antitrust injury.

The court laid out the standard, quoting the Fifth Circuit, channeling the Supreme Court, on what counts as an antitrust injury:

The Supreme Court has distilled antitrust injury as being “injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.” … “The antitrust laws … were enacted for ‘the protection of competition not competitors.’” … “Typical” antitrust injury thus “include[s] increased prices and decreased output.” … “This circuit has narrowly interpreted the meaning of antitrust injury, excluding from it the threat of decreased competition.” … “Loss from competition itself—that is, loss in the form of customers[] choosing the competitor’s goods and services over the plaintiff’s—does not constitute an antitrust injury.” … In short, the question underlying antitrust injury is whether consumers—not competitors—have been harmed.

Antitrust law protects competition, not competitors. X’s entire argument boiled down to: “advertisers chose to spend their money somewhere other than our platform, and that hurt us.” But that’s just… the market. That’s how markets work. Customers choosing not to buy from you because they don’t like what you’re selling has never been an antitrust violation, and the court made short work of explaining why.

Amusingly, the GOP — whose campaigns Musk has bankrolled extensively — spent decades pushing for exactly this narrow definition of antitrust injury, precisely to make cases like this harder to bring. Perhaps one of those politicians could have mentioned that before Elon filed.

But this case was never actually about winning an antitrust case. It was a warning shot at advertisers: give Elon your money or we’ll drag you through an expensive court process. A shakedown dressed up in legal filings. Indeed, after the lawsuit was filed, it was reported that part of X’s “sales” process was to threaten companies that they’d be added to the lawsuit if they didn’t advertise on the platform.

The court examined X’s theory from two different angles, and it failed both times. First, if the conspiracy was supposed to benefit competing social media platforms (like Pinterest, one of the defendants), X hadn’t alleged that any competitor was actually behind the boycott or pressuring advertisers to exclude X so the competitor could corner the market:

X has not alleged that the advertisers chose to do business with Pinterest—or any other social media company—as part of an agreement not to do business with X. Unlike the large hospital in Doctor’s Hospital, Pinterest is not alleged to be X’s competitor that wanted to exclude X from the market so that it could charge higher prices. In turn, unlike the network in Doctor’s Hospital, the advertisers did not decide to boycott X at Pinterest’s—or any other X competitor’s—behest to secure the competitor’s business. Instead, X alleges a conspiracy driven by advertisers not to further X-competitor social media companies’ interests but to pursue their own collective interests as to where they place their advertisements.

Second, if the conspiracy was supposed to eliminate competition at the advertiser level, the court found that GARM wasn’t acting as some kind of gatekeeper blocking X from accessing customers. It was just… advertisers deciding for themselves:

GARM is not an economic intermediary like the retailers in Eastern States. GARM did not buy advertising space from X to sell to advertisers nor did it, in such an arrangement, tell X not to sell directly to GARM’s customers. Rather, GARM was organized by advertisers and reflected their “avowed commitment to furthering [their] economic interests . . . as a group.” … Thus, if GARM is the obstacle to X reaching its advertiser-customers directly, then it is the equivalent of the advertiser-customers themselves deciding not to deal.

That’s the ballgame. Advertisers collectively deciding they don’t want to spend money on your platform — especially after you’ve told them to go fuck themselves and your platform has become a haven for content that damages their brands — just doesn’t state an antitrust claim. Imagine being so entitled that when the marketplace rejects your offering, you insist that it must be an antitrust attack on your rights to their money?

The court was so confident in this conclusion that it dismissed the case with prejudice and denied X the opportunity to replead, noting that the 165-paragraph complaint was already plenty detailed:

The 165-paragraph Second Amended Complaint contains no dearth of detail: if facts existed that GARM operated at an X competitor’s behest to put X out of business or that GARM advertisers sought to unfairly exclude competing advertisers from doing business, X would have pleaded those facts. The very nature of the alleged conspiracy does not state an antitrust claim, and the Court therefore has no qualm dismissing with prejudice.

When a court tells you the nature of your theory doesn’t work, that’s about as definitive a loss as you can get.

As we noted when the case was filed, the evidence X submitted in its own complaint actually undermined the case. One of X’s own exhibits showed GARM’s lead, Rob Rakowitz, explicitly telling an advertiser that GARM doesn’t make recommendations and that advertising decisions are “completely within the sphere of each member and subject to their own discretion.” Another email showed Rakowitz telling an advertiser asking about Twitter that “you may want to connect with Twitter directly to understand their progress on brand safety and make your own decisions.” This is the supposedly nefarious conspiracy that X spent years and untold legal fees litigating.

Separately, I have to mention the blatant forum shopping: X filed this case in the Wichita Falls Division of the Northern District of Texas, which was widely understood as a transparent attempt to land in front of Judge Reed O’Connor, known for partisan rulings and already presiding over Elon’s SLAPP suit against Media Matters. That didn’t work out — O’Connor recused himself, not because of his ownership of Tesla stock, but rather his ownership of some advertising firms who were defendants. The case got reassigned to Judge Boyle, and X still lost. In an ironic twist, X then tried to transfer the case to the Southern District of New York, only to have the court deny that motion because X couldn’t even prove they did business in that specific district. So X handpicked a forum, lost its judge, and then couldn’t escape to a different one. Great lawyering.

But the legal dismissal, satisfying as it is, doesn’t capture the most important part of what actually happened here. Because while the court correctly found that X suffered no antitrust injury, GARM itself suffered a very real injury: it was killed.

GARM shut down within days of the lawsuit being filed, following Rep. Jim Jordan’s misleading congressional investigation that painted the organization as some kind of anti-conservative censorship machine. Jordan’s pressure campaign, combined with the threat of expensive litigation from the world’s richest man, made it untenable for GARM to continue operating. The organization that existed to help advertisers make informed decisions about brand safety — a fundamentally expressive activity, protected by the First Amendment — was destroyed through government jawboning and litigation threats.

There was only one attack on free speech involved here and it came from Jim Jordan and Elon Musk, not GARM or its advertiser members.

X filed this lawsuit wrapped in the language of free speech. Former X CEO Linda Yaccarino literally wore a necklace that said “free speech” while announcing the case, claiming that advertisers not giving X money was somehow an attack on users’ ability to express themselves. The actual speech suppression ran the other direction entirely. A private organization exercising its speech rights to help its members make informed business decisions was bullied out of existence through a combination of congressional intimidation and frivolous litigation.

Jordan celebrated GARM’s dissolution as a victory for free speech — par for the course for the censorial MAGA GOP. A congressman used the weight of his office to pressure a private organization into shutting down, and called that free speech. Meanwhile, the lawsuit that was part of that same ecosystem of intimidation has now been found to have no legal merit whatsoever.

This is what actual jawboning looks like in practice. The lawsuit didn’t need to succeed to accomplish its goal. GARM is gone. The organization that facilitated conversations among advertisers about how to protect their brands has been silenced. The chilling effect on any future organization that might want to do something similar is obvious and intentional. Any industry group that tries to coordinate around brand safety now knows that it might face a billionaire-funded lawsuit and a congressional investigation for its trouble.

The court’s ruling is a vindication of basic antitrust law. But the more important point is about what the actual free speech dynamics were in this whole saga.

X can appeal, of course, and given that this falls within the Fifth Circuit, stranger things have happened. But the fundamental problem remains what it’s always been: the theory that advertisers owe you their business because you exist, and that organizing around brand safety is a criminal conspiracy, has never been a viable legal argument. The court said so plainly. Dismissed with prejudice. Nothing to fix, because the whole premise was broken from the start.

Filed Under: advertising, antitrust, boycott, elon musk, free market, jim jordan, linda yaccarino, marketplace of ideas, shakedown

Companies: garm, wfa, x