Musk’s X reaches deal to drop Twitch from lawsuit over ad spending

By Mike Scarcella

(Reuters) - Elon Musk’s X has reached an agreement to resolve claims that live streaming service Twitch conspired with other companies and an advertising industry group to boycott the social media platform, causing it to lose ad revenue.

In a court filing on Monday, 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 meets certain unspecified conditions by the end of the year.

X sued Twitch in November as part of a larger lawsuit alleging about a dozen companies violated antitrust law by withdrawing advertising on the site. Twitch had not yet responded to the lawsuit.

Amazon, Twitch and X did not immediately respond to requests for comment.

The deal was at least the second by a defendant in the lawsuit, after X dismissed consumer goods giant Unilever from the case in October.

London-based Unilever said in a statement then that X as part of the agreement "committed to meeting our responsibility standards to ensure the safety and performance of our brands on the platform."

X’s lawsuit accused the World Federation of Advertisers and some of its corporate members of conspiring to withhold billions of dollars in advertising revenue from X, previously known as Twitter.

Advertising expenditure on X slumped for months after Musk bought the platform in October 2022.

Some advertisers had been wary of buying ads on X following Musk's acquisition amid concerns their brands would appear next to harmful content, such as racist or false posts, that under prior management might have been removed.

Other defendants remaining in the lawsuit include CVS, Pinterest and Colgate-Palmolive. They did not immediately respond to requests for comment.

(Reporting by Mike Scarcella; Editing by David Bario and Bernadette Baum)