Elon Musk’s Dumb Advertiser Lawsuit Dismissed With Prejudice

Elon Musk’s lawsuit against advertisers for failing to advertise on his platform has ended in predictable failure.

With the way things have been developing in the world these days, 2022-2024, feels like an absolute eternity ago. So, to offer a quick recap of what happened, in 2022, Elon Musk bought Twitter for $44 billion, a purchase he was totally going to do, then desperately tried to get out of, then totally intended to do with the publicity stunt of bringing a sink into the building to cap off the totally intended outcome on top of it all.

Ever since that moment, Musk was doing everything he could to burn the whole platform to the ground. Whether that was overturning the bans on some of the most vile users on the platform, ending free speech on the platform by banning users that dare disagree with neo-fascist movement in general (ala thought crimes), firing the staff who were doing what they could to keep the whole operation afloat, pulling random wires out of servers and otherwise seeing random downtime because of doing stupid things on the technical side of things, renaming the platform to the incredibly stupid name of “X” (forcing many to deadname the platform in response so people knew what people were talking about), and, of course, driving advertising dollars away from the platform altogether. Musk’s stupidity in all of this was so legendary, it sparked memes like the one below:

With respect to advertisers, many of them were discovering that they were funding neo-nazi hate. Whether that is antisemitism, Islamophobia, bigotry, and other forms of racism and hate speech. So, many of those advertisers began dropping X/Twitter. Musk and his team told advertisers that they are totally brand safe in a bid to coax those advertisers back. Some gave the platform another chance only to find that their advertisements was still sponsoring hate.

Along the way, Musk grew frustrated and said that the platform doesn’t need those stinking advertisers in the first place. He famously told those advertisers to “fuck off”. So… fuck off they did. They dropped all advertising with no intention of ever returning. When Musk later discovered that the platform depends on advertising dollars and that revenues were plummeting as a result of his pure stupidity, Musk proceeded to file a lawsuit against those advertisers, claiming anti-trust violations for failure to advertise with the platform. Experts at the time hailed this as arguably the dumbest lawsuit filed by Musk yet. There was no contractual obligation for them to keep advertising with X/Twitter, so there was no inherent right to keep getting advertising dollars from them. Yet, Musk sued anyway much to the collective facepalms of legal experts.

The only thing that the lawsuit accomplished was to silence GARM, a non-profit organization that offers advice on what is and is not brand safe. It marked a major victory for Musk in his war on free speech, but that appears to be the limit to Musk’s success in this case.

Recently, a decision came down regarding the lawsuit and it was pretty much the only outcome that could ever come from this one: dismissed with prejudice. From TechDirt:

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.

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.

Hopefully, this is the end of this ridiculous saga. People advertise with you because they have an interest in forming a business partnership with you. You, as the platform, don’t magically have a right to those advertising dollars no matter how big you are. If advertisers don’t want to advertise with you, that is their right. None of this is rocket science, but at least we see the silver lining of Musk getting absolutely destroyed in the courts for his stupid shenanigans.

Drew Wilson on Mastodon, Twitter and Facebook.