Elon Musk’s rebranded Twitter has accused an anti-hate speech group of costing the social media app “tens of millions of dollars” in revenue after advertisers paused spending on the platform, according to a lawsuit.
ONE legal filing by the owner of X, the new name for Twitter as of last month, accuses the Center for Countering Digital Hate (CCDH) of harming the company financially through its research of content on the social media service.
The lawsuit filed in US District Court claimed that 16 unnamed advertisers had stopped using the platform, paused advertising plans or decided not to reactivate campaigns after reading the CCDH work.
It said at least eight organizations and companies, including multinationals that have historically advertised on X, had paused spending on the platform in June and July after reading CCDH reports. The lawsuit added that another five separate companies, including large multinationals, had paused advertising spending around November of last year — shortly after Musk bought the company — after reading CCDH research. Another three companies did not reactivate ad campaigns because of CCDH, the lawsuit states.
The filing said the cost of the ad placements ran into the tens of millions of dollars.
“Based on the historical spending of those 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 revenue from the date of this complaint, with these amounts, which may increase as time goes on,” the lawsuit states.
Advertising accounted for 90% of revenue in Twitter’s most recently published annual results, which covered 2021. Since then, ad revenue has plummeted, with Musk tweeting recently that it had halved.
CCDH, a US-UK group, has regularly published research into X’s contents since it was bought by Musk for $44bn (£34.4m) last October. Advertisers that have paused spending on the platform include carmaker Audi and pharmaceutical company Pfizer.
The suit, filed Monday in the U.S. District Court for the Northern District of California, seeks unspecified damages for breach of contract, violation of the Computer Fraud and Abuse Act, intentional interference with contract and breach of contract.
Among other allegations, the lawsuit accuses CCDH of “improperly” scraping data from Twitter for its “flawed” research. CCDH research includes a recent study claiming that 99% of hate speech posted by a selection of subscribers to Twitter Blue – X’s premium service – was not traded by the platform. The lawsuit also accuses CCDH of gaining unauthorized access to data from Brandwatch, a consumer research firm.
On Monday, the CCDH published a letter from Musk’s legal representative, Alex Spiro of the US law firm Quinn Emanuel, threatening legal action under Lanham Act, a piece of US law covering trademark law. However, the California lawsuit uses a different law firm, White & Case, and relies on a different piece of legislation.
CCDH chief executive Imran Ahmed said Musk was trying to “bully us into silence”. In a statement, he said: “Elon Musk’s latest legal threat is straight out of the authoritarian playbook – he is now showing that he will stop at nothing to silence anyone who criticizes him for his own decisions and actions.”
Ahmed added: “Musk is trying to ‘shoot the messenger’ who is highlighting the toxic content on his platform instead of dealing with the toxic environment he has created.”