X, formerly known as Twitter, has intensified its legal fight against advertisers by adding Twitch, the Amazon-owned livestreaming platform, as a defendant in its ongoing lawsuit. According to the lawsuit, a group of companies planned to boycott X, severely harming its advertising revenue.

Allegations of an illegal boycott

X initially filed the lawsuit in August 2023, targeting several companies and organizations including the World Federation of Advertisers (WFA) and its now-disbanded Global Alliance for Responsible Media (GARM). According to the platform, these organizations planned a “group boycott” that broke antitrust laws in the United States. According to the lawsuit, Twitch endorsed GARM’s brand safety standards and has refrained from advertising on X in the U.S. since November 2022.

“This marked a departure from previous activity,” the lawsuit states, accusing Twitch and others of withholding billions in ad dollars. With CEO Stephan Loerke emphasizing the organization’s adherence to competition regulations, the WFA has refuted the accusations.

Struggles under Musk’s leadership

X has faced declining ad revenue since Musk’s acquisition in late 2022, with brands pulling out due to concerns over hate speech and controversial moderation policies. Musk’s comments, including telling advertisers to “go f*** yourself” in late 2023, further strained relationships. Despite efforts to regain trust, such as offering premium ad products, X’s top advertisers have cut spending by 64% compared to 2022.

A broader advertising challenge

X is still dealing with the consequences of the alleged boycott. Due to the platform’s connection to risky content, numerous advertisers are still apprehensive. As a result of X’s dissatisfaction rivals like Threads and Bluesky are acquiring users.

The result of X’s legal struggle with Twitch and other defendants may give Musk temporary validation. But the platform has more serious problems regaining users and sponsors. “The lawsuit is just one step in a larger struggle to secure the platform’s future,” industry analysts suggest.