Elon Musk’s X Threatens Advertisers With Lawsuits to Win Back Ad Dollars

A new report from The Wall Street Journal reveals how Elon Musk’s X, formerly Twitter, is using legal threats to pressure major advertisers back onto the platform. The campaign, led by Musk and CEO Linda Yaccarino, marks a shift from discounts and outreach to lawsuits and ultimatums. At stake: reversing a 43% drop in ad revenue since Musk’s $44 billion acquisition.

According to the report, companies including Verizon (VZ) and Ralph Lauren (RL) returned to X after receiving warnings that they could be added to an antitrust lawsuit unless they resumed ad spending. Verizon has pledged to spend at least $10 million in 2025, with the potential to increase that to $25 million, depending on performance and assurances of brand safety. In 2020, Verizon spent $80 million on the platform.

Who Else Is in X’s Crosshairs?

Pinterest (PINS), LEGO, and Twitch, which is owned by Amazon (AMZN), were added to the lawsuit after declining to meet X’s demands. The company sued the World Federation of Advertisers and its Global Alliance for Responsible Media (GARM) last August, accusing them of organizing an illegal boycott. GARM disbanded shortly after. X later subpoenaed major ad agencies, including Omnicom (OMC), Publicis (PUBGY), and WPP, demanding internal emails about X and watchdog Media Matters.

Some companies agreed to return quietly. Unilever (UL) was dropped from the lawsuit in October after a deal was reached, reportedly aided by board member and Musk ally Nelson Peltz. AMZN also resumed ad spending this year after months of negotiation, despite X having included Twitch in the initial complaint.

X’s lawyers have told advertisers they could be added to the lawsuit unless they commit to spending at least what they did before Musk’s takeover, or in some cases, double that amount. Publicis agreed to target $150 million in U.S. ad spend in 2025, up from $70 million in 2024. IPG signed a new deal with X shortly after being warned their pending $13 billion merger with Omnicom could face resistance.

Reputational Risk vs. Legal Risk

X’s ad revenue dropped from $4.6 billion in 2022 to $2.6 billion in 2024. When examining the overall numbers in the digital ad space, between $740 billion and $790 billion, it’s easy to understand why Musk is feeling aggravated. However, Research firm Emarketer expects modest growth this year, marking the first annual increase under Musk. While X has developed new tools to help advertisers avoid unsafe content and struck content deals with the NFL and NBA, the aggressive legal strategy is drawing criticism.

Industry consultants say some marketers feel caught between reputational risk and legal risk. Others worry that turning ad contracts into courtroom disputes could set a new precedent for how digital platforms manage boycotts.

For investors, the story touches several corners of the market. Consumer stocks like UL and RL, ad-heavy tech firms like PINS and AMZN, and agency giants like OMC and PUBGY are all tied up in this legal and financial standoff. While X remains private, its tactics and their results are likely to have a ripple effect across the estimated $800 billion global digital ad market in 2025.

As X targets various publicly traded companies, we’ve assembled all those mentioned in the piece, using Tipranks’ Comparison Tool, to gain a broader understanding of their current overall state.