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Musk's X sues advertisers over alleged 'massive advertiser boycott'.
(www.voanews.com)
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this post was submitted on 06 Aug 2024
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I can't wrap my head around the ridiculousness of it. Or grasp why some US political figures are lapping it up.
Imagine McDonald's suing you because you didn't buy enough big macs this quarter. It's crazy. You're not automatically entitled to having customers.
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Pure speculation on the only real way it could have merit:
Sometimes there actually are contracts for minimum spending. This happens with actual physical products in exchange for a better bulk price, and would usually take extraordinary events to breach the contract on the manufacturer's side to break as the purchaser, because it may involve stuff like building up manufacturing capacity. In that context, it's a perfectly legitimate business practice.
The economics of websites are different, but (without direct knowledge of anyone's practices) it's within the realm of plausibility that similar contracts exist on big advertising platforms. It's valuable for larger advertisers to keep price down, and it's valuable for the platforms to have a steady base level of advertising.
If those contracts do exist, then the case might have the potential to be interesting. How badly does a platform have to materially degrade the value of their advertising before advertisers are able to back out of pre-existing deals? (The other option is collusion, but good luck showing cause for that.)