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Rumble Inc. (NASDAQ:RUM) in conjunction with Elon Musk’s X, formerly Twitter, has lodged antitrust lawsuits alleging a conspiracy to withhold advertising revenue.
What Happened: On Tuesday, the U.S. District Court for the Northern District of Texas received the filing from Rumble, which named the World Federation of Advertisers, advertising agency WPP, and its subsidiary GroupM Worldwide as defendants.
Sharing the development on X, Rumble’s official account stated, “Rumble has joined X to sue a cartel of advertisers and ad agencies who conspired to block ad revenue from going to certain platforms and content creators.”
Sharing the post, Musk said, “Everyone who has been boycotted should file a lawsuit in every country they've been boycotted.”
In another post, the tech mogul said he strongly encourages companies that have faced systematic boycotts by advertisers to file a lawsuit. “There may also be criminal liability via the RICO Act.”
The RICO Act is a federal law that helps prosecutors go after organized crime by targeting groups involved in ongoing illegal activities.
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Earlier in the day, Musk’s social media platform, which he acquired in October 2022 for $44 billion, also shared that they sued companies including Unilever, Mars, and CVS Health, and Global Alliance for Responsible Media.
“The illegal behavior of these organizations and their executives cost X billions of dollars,” stated an open letter to advertisers which was posted by X CEO Linda Yaccarino.
Musk also shared the open letter and said, “We tried peace for 2 years, now it is war.”
Why It Matters: Advertising revenue at X has dropped significantly in the year following Musk’s acquisition. Several brands have become cautious due to the rapid changes implemented under Musk’s ownership.
Last month, it was reported that major advertisers, such as McDonald's and YouTube, reduced their spending on X by 55% during this year’s Super Bowl compared to the last year.
Watchdog groups have reported a significant increase in antisemitic content on X, including ads appearing alongside posts with pro-Nazi sentiments.
In November last year, multiple big tech companies including Apple, Disney, Warner Bros. Discovery, and IBM withdrew their advertisements from X. Later in the month, in an interview, the tech mogul warned that if If advertisers don't return, “it's going to kill the company.”
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Posted In: RUM
