In a lawsuit, Elon Musk's rebranded Twitter blamed an anti-hate speech organization that caused "tens of millions of dollars" in lost income from advertisers who stopped spending on the social media app.
'Tens of Millions of Dollars in Lost Revenues'
The company behind X (formerly Twitter) has filed a lawsuit against the US-UK group Center for Countering Digital Hate (CCDH), claiming that the latter's investigation into the social media site has caused financial harm to the company.
The complaint was filed in a district court in the US, claiming that 16 unidentified advertisers had elected not to resume spending on the site after learning about the CCDH's initiatives.
According to The Guardian, at least eight organizations and firms, including global enterprises that had consistently advertised on X, had halted spending on the platform in June and July after reading findings from the CCDH research. Five other businesses, including major multinationals, put advertising plans on hold after reading CCDH research in November 2022, not long after Musk purchased the firm. The complaint claims that CCDH was the reason why three further firms were not restarting their marketing campaigns on the app.
The advertising delays were estimated to have cost tens of millions of dollars, as per the lawsuit.
"Based on the historical spend of the companies and organizations that have paused paid advertising and/or paused plans for future paid advertising, X Corp estimates that it has lost at least tens of millions of dollars in lost revenues as of the date of this complaint, with those amounts subject to increasing as time goes on," the complaint states.
Since October 2022, when Musk paid $44 billion to buy the company, the CCDH has produced consistent studies into X's content. Audi, a vehicle manufacturer, and Pfizer, a pharmaceutical corporation, are two examples of advertisers that have halted spending on the platform.
Twitter's latest reported annual results were for 2021, showing that the majority (90%) of their earnings came from advertising. Ad income has been falling ever since, with Musk recently tweeting that it had dropped by half.
Elon Musk vs. CCDH
The complaint was filed on Monday, July 31, in the US District Court for the Northern District of California. It alleges breach of contract, violation of the Computer Fraud and Abuse Act, and deliberate interference with contractual relations, all of which are grounds for monetary damages of an unknown amount.
The complaint claims, among other things, that CCDH illegally scraped data from Twitter to support its flawed analysis. Recent CCDH studies, for example, have claimed that Twitter did nothing about 99% of hate speech uploaded by a random sample of users of Twitter Blue (X's subscription service). The suit also claims that CCDH improperly obtained data from the market research firm Brandwatch.
CCDH remarked on its website, "It's a move straight out of the authoritarian handbook to try to silence us and our work." Donations are being accepted to support them financially as they fight back.
