X halts ads for Premium+ users as Musk lawsuit challenges first amendment

The X social media platform announced on Aug. 8 that it would no longer serve advertisements to “Premium+” subscribers on the platform. The news comes in the wake of a lawsuit filed by X owner Elon Musk against advertisers over their alleged refusal to engage with the company. 

All users on the platform were served ads prior to the change, with those at the top tiers seeing fewer. Going forward, Premium+ will have a “fully ad free” experience. This move could be seen as a capitulation to the reality that advertisers still haven’t returned to the platform.

Legal actions

The update comes at a time when X owner Elon Musk is engaged in a long-standing feud with advertisers who refuse to conduct business with the social media platform.

In a video published on Aug. 7, X CEO Linda Yaccarino announced that the company had filed a lawsuit against the Global Alliance for Responsible Media (GARM) alleging that “a group of companies organized a systemic, illegal boycott against X.”

GARM is a voluntary community of advertisers established in 2019 by the World Federation of Advertisers. Its stated mission is to confront the emerging challenges associated with placing ads on social media networks.

Traditionally, advertisers pay to have their clients' products associated with what the industry refers to as “high value real estate.” Toy makers, for example, might pay a premium to have their advertisements shown in or near popular content aimed at kids.

Conversely, advertisers might be reluctant to place their clients’ ads on social media platforms lacking robust content moderation due to their unpredictable nature.

Racketeering and the First Amendment

At the crux of the X lawsuit lies two complex areas of US law: RICO and the First Amendment.

RICO refers to the Racketeer Influenced and Corrupt Organizations Act established in 1970. It’s typically used by prosecutors try crimes committed as part of an ongoing criminal enterprise as a single sweeping case.

But, in order to establish that it's illegal for the individual members of the GARM organization to choose not to advertise on X, and subsquenta court would presumably need to overcome the bar set by the first amendment to the US Bill of Rights. 

The First Amendment guarantees freedom of expression. Courts have ruled that “expression” includes speech, religion, and the freedom to associate or not associate with any individual, group, or organization within the boundaries of established law.

Essentially, the first amendment says that, barring legal action, the US government can’t force anyone to associate with anyone else. 

Complicating matters further is the fact that Musk said he hoped advertisers would flee his platform in profanity-laden commentary during an event in November of 2023.

“I hope they stop. Don’t advertise,” said Musk, adding “If somebody is going to try to blackmail me with advertising, blackmail me with money, go fuck yourself. Go fuck yourself. Is that clear? I hope it is.”

Related: EU watchdog sues Elon Musk’s X over alleged AI data violations