In a dramatic shift, X (formerly Twitter) has announced that it will no longer display advertisements to its Premium+ subscribers, marking a new chapter in its ongoing battle with advertisers and legal issues. Elon Musk, the owner of X, filed a lawsuit recently, prompting the social media platform to reveal this decision on August 8.
The change marks a significant shift from the platform’s previous advertising model, which exposed all users, including Premium+ subscribers, to ads, albeit at a lower frequency for Premium+ members. Now, Premium+ users will experience a completely ad-free environment. This change reflects the platform’s struggle to regain advertiser confidence and suggests that the anticipated return on ad revenue has yet to materialize.
The legal confrontation began when Musk and X took legal action against the Global Alliance for Responsible Media (GARM), accusing the organization of leading a systemic boycott against X. GARM, founded by the World Federation of Advertisers in 2019, aims to tackle the challenges of advertising on social media. X’s lawsuit claims that GARM’s coordinated efforts to discourage companies from advertising on the platform violate antitrust laws.
At the heart of the lawsuit are complex legal concepts involving the Racketeer Influenced and Corrupt Organizations (RICO) Act and the First Amendment. Designed to combat organized criminal activities, the application of RICO to advertising practices and First Amendment rights introduces layers of legal complexity. The First Amendment protects freedom of expression and the right to associate or disassociate, complicating any claims that might force advertisers to spend on X against their will.
Musk’s controversial statements, including his open disdain for advertisers who might try to leverage their advertising dollars to influence platform policies, have exacerbated the legal drama. His remarks have fueled the ongoing conflict, highlighting the tensions between the social media platform’s new direction and traditional advertising practices.
