Hiltzik: Musk tests a new way to alienate advertisers

Let’s play a parlor game titled “What’s the dumbest thing Elon Musk has ever done?”

Is it promoting tweets from outspoken antisemites and racists on X, formerly Twitter, the social media platform he owns? Embracing antisemitic tweets himself?

Or was it, telling some of the largest corporations in the world to, um, perform a sexual act on themselves because they stopped advertising on the platform? (Warning: Link not safe for work.)

Maybe the top prize goes to his reinstating thousands of accounts of Nazis, white supremacists and disinformation purveyors that had been banned from Twitter by its previous management?

Actually, my vote goes to the federal lawsuit X filed on Aug. 6 accusing big advertisers of colluding in a boycott of the platform, ostensibly because they disapprove of its content.

The filing was announced in a video tweet by Linda Yaccarino, the chief executive of X. Yaccarino’s hostage-like affect and her theatrical hand-wavings in the video are so eerie that some viewers speculated, also on X, that the video is an AI-generated deepfake. And why not? Musk himself promoted on X a deepfake fabricating a purported speech by Kamala Harris with the words, “This is amazing.”

The lawsuit targets the World Federation of Advertisers, a networking organization for big advertisers. It specifically names WFA and four companies — the Danish energy company Ørsted, CVS Health and the consumer companies Unilever and Mars. Why it singles out those companies isn’t entirely clear, though it’s notable that they are members or have leadership positions in the Global Alliance for Responsible Media.

GARM, as the lawsuit asserts, was founded to establish brand safety standards for advertisers on X and other social media platforms. In other words, standards to help advertisers keep their messages from showing up alongside posts and accounts promoting hate speech and other noxious messages.

The lawsuit and Yaccarino’s video assert that the advertisers colluded through GARM to boycott X, depriving it of its lifeblood, advertising revenue. “That puts your global town square, the one place that you can express yourself freely and openly, at long-term risk,” Yaccarino said.

Leaving aside this rather inflated and anachronistic description of X — its status as a “global town square” hasn’t survived Musk’s acquisition of the platform in 2022 — the idea that you can sue corporations for deciding not to advertise with you is beyond absurd.

A couple of points about all this:

First, the lawsuit piggybacks on a report issued last month by the Republican staff of the House Judiciary Committee, which is chaired by that outstanding blowhard, Rep. Jim Jordan of Ohio. One in an ever-lengthening line of useless, conspiracy-addled reports from the GOP House caucus — see, for example, its ignorantly anti-scientific screeds about the origins of COVID — this one was oh-so-cleverly titled “GARM’s Harm” and claimed that GARM members colluded to put X out of business.

“I was shocked by the evidence uncovered by the House Judiciary Committee that a group of companies organized a systematic illegal boycott against X,” Yaccarino says, ludicrously.

More to the point, this lawsuit reflects Musk’s habit of blaming X’s financial ills on everyone but himself. Over the last year or so, X has sued the watchdog organizations Media Matters for America and the Center for Countering Digital Hate for trying to “censor” X by asserting — inaccurately, X says — that the platform has become a haven for pro-Nazi content and other hate speech.

Musk also threatened to sue the Anti-Defamation League for purportedly pressuring companies to stop advertising on X because of the apparent rise in hate speech. That lawsuit never materialized. The Media Matters lawsuit is pending. The case against CCDH was thrown out by U.S. Judge Charles R. Breyer of San Francisco in March. More on that in a moment.

Put it all together, and it appears that Musk doesn’t realize that X needs advertisers more than they need X. The platform was generally an also-ran as an advertising medium online, trailing Meta and Google. Under Musk, it may have fallen further behind.

The first hint of the cynicism attending this lawsuit comes from where it was filed. As X notes in its complaint, among the defendants the World Federation of Advertisers is headquartered in Belgium, Ørsted in Denmark, Unilever in London, Mars in Virginia and CVS Health in Rhode Island. X itself is headquartered in San Francisco.

So of course Musk filed the lawsuit in Wichita Falls, a North Texas community with a population of 102,000, which makes it the 39th-largest city — in Texas. What Wichita Falls does offer litigants of a certain ideological slant, however, is a one-judge federal court.

That judge is Reed O’Connor, a right-wing George W. Bush appointee whose hit parade includes rulings invalidating government anti-discrimination laws protecting transgender rights, blocking a COVID vaccine mandate for Navy SEALs and declaring the entire Affordable Care Act unconstitutional. (That last ruling was overturned by the Supreme Court, 7 to 2.)

O’Connor, by the way, is also presiding over the lawsuit against Media Matters. A year ago he reported owning shares worth $15,001 to $50,000 in Tesla, the electric vehicle company Musk controls.

Unsurprisingly, none of these lawsuits alludes, even in passing, to the possibility that the steep decline in revenues or advertising from major consumer firms at X might have something to do with Musk’s policies and behavior.

The lawsuits generally describe their goal as the protection of free speech and open debate online, and present X as the innocent target of one cabal or another.

Judge Breyer in San Francisco made short of that claim in his dismissal of the lawsuit against CCDH; indeed, he found that the shoe was on the other foot. “This case is about punishing the Defendants for their speech,” he ruled. (My emphasis.) He rejected X’s assertion that it had lost “at least tens of millions of dollars” because of CCDH’s reports of the presence of hate speech on X, finding that the platform couldn’t document that its losses were traceable to CCDH reporting or that the money could be recovered even if it could do so.

“X Corp.’s motivation in bringing this case is evident,” Breyer ruled. “X Corp. has brought this case in order to punish CCDH for CCDH publications that criticized X Corp. — and perhaps to dissuade others who might wish to engage in such criticism.” X’s demand for tens of millions of dollars in compensation, he found, seemed designed to “torpedo the operations of a small nonprofit … because of the views expressed in the nonprofit’s publication.”

That brings us to the new lawsuit, against the World Federation of Advertisers and the four corporations. These are defendants that might not blanch at the cost of defending what might be a frivolous lawsuit, but at some level it seems to have made them nervous: The federation said last week that it is “discontinuing” the Global Alliance for Responsible Media.

Musk and his peanut gallery crowed that this represented a victory, but it’s hardly that. The four corporate defendants — like any members of the federation or GARM — always have the right to make their own decisions about where to place their ads. Indeed, it’s inconceivable that a $60-billion multinational such as Unilever would cede those decisions on its hundreds of brands, which include Ben & Jerry’s, Dove beauty products and Hellmann’s mayonnaise, to outsiders.

It’s true that GARM developed standards to help members assess whether they wanted their ads to appear on social media platforms and methods to ensure that the platforms understood the brands’ concerns. It’s also true that advertisers expressed concerns after Musk’s acquisition, and his firing of most of the staff responsible for trust and safety at X, that the chances their ads would end up cheek by jowl with posts from malodorous tweeters would rise.

But the GOP report acknowledges that GARM offered advice, not mandates, and that its advice was typically solicited by the advertisers themselves. What may have irked the Republicans and Musk is that most of the content that scared advertisers away tended to come from the right-wing fever swamp, which no self-respecting corporation would want to be seen endorsing.

One variety of content involved claims that evidence found on a laptop purportedly belonging to Hunter Biden, the president’s son, suggested Hunter was involved in wrongdoing. “Unilever, through GARM, … expressed issues with Mr. Musk exposing the truth about how Twitter, prior to Mr. Musk’s acquisition, censored the Hunter Biden laptop story,” the GOP report says.

The Biden allegations are cherished by the Republican right wing even though no connection to President Biden has ever been established. The GOP report says claims that “incriminating evidence about the Biden family’s influence peddling was found on Hunter Biden’s laptop … have since been authenticated,” which is untrue; that only underscores that the GOP report was a partisan smear, and not something on which X should rest its legal case.

In any event, the GOP report acknowledges that Unilever is “free to unilaterally stop spending its advertising money on [X],” which apparently has happened. Shed a tear for Musk, if you’re so inclined.

Musk may have turned into the biggest obstacle to the survival of X. Directing a profane insult at big advertisers and treating their refusal to spend their ad dollars at his hobbyhorse as “blackmail,” as he did in November, is hardly a way to cozy up to them.

Musk tried a charm offensive this summer at the Cannes Lion Festival, which brings together international advertisers, telling them they “have a right to appear next to content that they think fits with their brand.” But whatever goodwill he might have generated then evaporated last week with his lawsuit. “We tried peace for 2 years, now it’s war,” he said in announcing the lawsuit.

Meanwhile, Musk’s behavior gets worse. Just last week, the CCDH, freed from the financial burden of defending itself against his lawsuit, reported that his “false or misleading claims about the U.S. elections” have been viewed nearly 1.2 billion times on X, “with no fact checks” such as the “community notes” that often debunk disinformation from other accounts.

Why would any advertisers hoping to attract and keep customers want their ads to be seen on a platform that has become a source of informational sewage? To ask the question is to answer it.