Over the Thanksgiving break, I finally got to catch up on the latest legal news in the world of social media. Two major lawsuits were on my radar. The first was Elon Musk’s suit against the nonprofit Media Matters for America, alleging that Media Matters defamed X Corp. in its story showing that the platform ran ads from major companies alongside racist and anti-Semitic content. The second was a lawsuit filed by 33 attorneys general against Meta for knowingly inducing young people to use its product in violation of state consumer protections laws and its own terms of service. Spoiler alert: Only one of these lawsuits is worth your attention.
Let’s start with Musk and X. This brouhaha began two weeks ago, when Media Matters published an article stating that ads from major corporations were appearing alongside neo-Nazi accounts. The article included screenshots of these juxtapositions, including ads from companies like Apple, Xfinity, and IBM. The article used the ad placements to counter the claim made by X CEO Linda Yaccarino that the company was combating antisemitism on the platform and that brands would be “protected from the risk” of appearing alongside such content. As an aside, the article notes that Musk himself had endorsed a post on X promoting “replacement theory” (not to be confused with the conspiracy that Musk also amplified accusing a 22-year-old Jewish man of being a neo-Nazi). In response, several major companies, including Apple and IBM, pulled their ads from the site. Predictably, the thin-skinned Musk filed a lawsuit.
Musk’s suit alleges tortious interference of contract by Media Matters – basically, an allegation that the nonprofit had induced these major companies to break their advertising agreements with X. The problem for Musk is that tortious interference typically involves a state of mind requiring some intentionality – knowing interference – to deter or prevent a party to the contract from fulfilling their side of the agreement. Publishing an article that has some spillover consequences doesn’t quite rise to that standard. The lawsuit also alleges that Media Matters engaged in “business disparagement” (basically a form of corporate defamation) by falsely stating that X had “placed” the ads next to the far-right content, when the ads were generated by X’s algorithm based on the specific accounts Media Matters decided to follow. One wrinkle here is that Musk concedes that ads did appear next to neo-Nazi content. This concession hurts Musk’s claim; as with defamation, truth is a defense to a claim of disparagement. Finally, Musk is claiming interference with prospective economic advantage, which is similar to the tortious interference of contract, but with contracts that have not yet been formed (in other words, that Media Matters’ article has scared off potential advertisers from doing business with X).
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