Musk’s X battles India in court while advertisers continue to play hardball

Billionaire entrepreneur Elon Musk’s social media platform X, formerly Twitter, has once again locked horns with the Indian administration, filing a legal challenge against the Central government’s content-blocking mechanisms. Media reports state that in its petition to the Karnataka High Court, X Corp has argued that the government’s use of Section 79(3)(b) of the Information Technology (IT) Act to issue content takedown orders is legally untenable, as Section 69A remains the only valid legislative framework for blocking online content.

“The law mandates that information blocking can only be carried out under Section 69A, which provides for judicial scrutiny. By using Section 79(3)(b) as an alternative mechanism, the government is effectively nullifying the Supreme Court’s directives,” X Corp’s petition reportedly stated.

The platform ostensibly contends that the government's approach infringes on constitutional rights, particularly Article 14 (equality before the law) and Article 19(1)(a) (freedom of speech and expression). The dispute highlights concerns about the Sahyog Portal, a government-run platform that facilitates takedown requests by various government entities, including state police, bypassing legal due process.

Claiming that this system allows for unregulated censorship, X has reportedly challenged the mandate requiring it to appoint a ‘Nodal Officer’ for compliance. The platform argued that such directives lack statutory legitimacy.

X’s clash with the Indian government is not unprecedented. Former Twitter CEO Jack Dorsey mentioned how it was previously embroiled in controversy during the 2021 farmers’ protests, and how the government ordered it to remove tweets and block accounts that were allegedly linked to Sikh separatist groups.

However, these statements were debunked by Rajeev Chandrasekhar, former Union Minister of State for Electronics and Information Technology, Skill Development and Entrepreneurship and Jal Shakti

This is an outright lie by @jack - perhaps an attempt to brush out that very dubious period of twitters history

Facts and truth@twitter undr Dorsey n his team were in repeated n continuous violations of India law. As a matter of fact they were in non-compliance with law… https://t.co/SlzmTcS3Fa

— Rajeev Chandrasekhar ���� (@RajeevRC_X) June 13, 2023

Musk’s takeover of Twitter in October 2022 for $44 billion ushered in a tumultuous phase for the platform. Musk himself acknowledged he had overpaid, only to drive down the platform’s value further by cutting content moderation, reinstating banned accounts, and making controversial statements, including an antisemitic tweet in 2023. These, coupled with a growth in hate speech on the platform, prompted major advertisers to pause their ad spending due to concerns over brand safety.

According to Kantar Media Reactions, trust in X among marketing professionals plummeted in 2024, with just 12% expressing confidence in ads on the platform. A net 26% of marketers planned to reduce their ad spend on X, with brand safety concerns cited as the primary reason.

“Advertisers have been moving their marketing spend away from X for several years. The stark acceleration of this trend in the past 12 months means a turnaround currently seems unlikely,” said Gonca Bubani, global thought leadership director–media at Kantar stated in a release.

In January 2024, Fidelity, a mutual fund that owns a stake in X, slashed the platform’s valuation to $12.5 billion—a sharp drop from Musk’s acquisition price of $44 billion. However, in a dramatic turnaround, Financial Times later reported that X’s valuation rebounded to $44 billion, a recovery many attribute to Musk’s proximity to US president Donald Trump.

America’s changing political landscape could also have played a significant role in X’s reviving advertising fortunes. With Trump in the White House, and Musk by his side, some brands appear to be cautiously resuming ad spending on the platform.

Apple, for instance, had stopped advertising on X after Musk’s controversial endorsement of an antisemitic tweet in 2023. However, in February 2024, Apple’s @Apple and @AppleTV accounts resumed running ads, promoting Safari’s privacy features and Apple TV+ content.

Other former top advertisers, including Comcast, IBM, Disney, Warner Bros. Discovery, and Lionsgate Entertainment, also returned to X, though at significantly reduced spending levels. Data from MediaRadar revealed that these brands collectively spent under $3.3 million on X between January and September 2024, a staggering 98% decline from the $170 million spent in the same period the previous year.

Frustrated by the reluctance of advertisers to fully return, X sued several major corporations and the World Federation of Advertisers’ Global Alliance for Responsible Media (GARM) in August 2024. The lawsuit accused Unilever, Mars, CVS Health, Ørsted, Twitch, and other advertisers of conspiring to boycott X, alleging that their collective action violated U.S. antitrust laws.

“We tried peace for 2 years, now it is war,” Musk tweeted on the day the lawsuit was filed.

We tried peace for 2 years, now it is war https://t.co/elgT62uDtF

— Elon Musk (@elonmusk) August 6, 2024

Musk’s lawyers argued that GARM’s member companies unlawfully pressured social media platforms to adhere to brand safety standards, forcing X to adopt measures that were unfavourable to its business model. The complaint alleged that some advertisers even celebrated X’s failure to meet revenue targets, further exacerbating the platform’s financial struggles. In February 2025, X expanded its lawsuit, adding Nestlé, Abbott Laboratories, Colgate-Palmolive, Lego, Pinterest, Tyson Foods, and Shell International to the list of defendants.

Since Musk’s acquisition, X’s relationship with advertisers has remained strained. CEO Linda Yaccarino attempted to mend fences by publishing an open letter emphasising the platform’s commitment to advertisers, but skepticism persists.

The platform’s ongoing legal battles—both in India and against advertisers—underscore the precarious state of its business model. Much of this hinges on the delicate balance between free speech advocacy and the need for advertising revenue.

With Musk continuing to push his vision of an unmoderated social media landscape, X faces an uphill battle in regaining advertiser confidence while simultaneously challenging government-imposed restrictions. Whether the Karnataka High Court rules in its favour or not, X’s latest legal challenge against the Indian government is yet another chapter in its fraught journey under Musk’s ownership.