In a noteworthy turn of events, Elon Musk’s platform, X, has entered into a preliminary agreement to drop its lawsuit against Twitch. This development comes after X initiated legal action against the streaming service in November 2024. Musk has accused Twitch of collaborating with other entities, including the Global Alliance for Responsible Media (GARM), to intentionally refrain from advertising on X.
According to reports from Reuters, the court filing revealed that X has signed a “memorandum of understanding”outlining that the case against Twitch can be dismissed if certain undisclosed conditions are fulfilled by the end of 2025:
“X told a federal judge in Texas that it signed a ‘memorandum of understanding’ to drop its case against Twitch if the Amazon.com subsidiary met certain unspecified conditions by the end of the year.”
This agreement follows X’s earlier settlement with Unilever, which was also withdrawn from the lawsuit after committing to specific brand safety measures on the platform.
However, Musk’s legal pursuits continue with other companies, including CVS, Pinterest, and Colgate-Palmolive. The original lawsuit claimed that these businesses deliberately ceased advertising on X, particularly in the wake of Musk’s acquisition of the platform in October 2022.
Impact of Twitch’s Advertising Boycott on X
The advertising boycott initiated by Twitch and its partners has reportedly caused substantial financial repercussions for X, leading to a staggering almost 40% decrease in advertising revenue during the first half of 2023. Notable advertisers like Disney and Apple have paused their ad placements due to concerns regarding their brands being associated with inappropriate content.
Moreover, internal documents have revealed that more than 200 different advertising units from major brands, including Airbnb, Coca-Cola, and Microsoft, have either halted or are contemplating stopping their advertisements on X. This situation has put an estimated $11 million in revenue at risk.
On a separate note, Musk has been promoting X as a viable platform for live streaming, encouraging streamers from other platforms to explore multi-streaming opportunities. His advocacy extends from personal experience; Musk has engaged in live streaming himself, notably sharing his gameplay of Path of Exile 2. In a controversial admission in 2024, he acknowledged account boosting for achieving high rankings, which sparked backlash from both the gaming community and notable streamer Asmongold.
As this legal saga unfolds, the focus on advertising practices and platform safety continues to be critical for the future of X in an increasingly competitive landscape.