By Sheila Dang
(Reuters) - Social media company X on Monday sued media watchdog group Media Matters, alleging the organization defamed the platform after it published a report that said ads for major brands had appeared next to posts touting Adolf Hitler and the Nazi party.
X, formerly Twitter, has faced growing outrage since Media Matters published the report on Thursday, which led IBM (NYSE:IBM), Comcast (NASDAQ:CMCSA) and several other major advertisers to pull ads from the platform in response. The report also came a day after X owner Elon Musk expressed agreement with a post on the platform that falsely claimed Jewish people stoked hatred against white people.
In the lawsuit filed in a U.S. District Court in Texas, X claimed Media Matters "manipulated" the social media platform by using accounts that exclusively followed major brands or users known to produce fringe content, and "resorted to endlessly scrolling and refreshing" the feed until it found ads next to extremist posts.
Media Matters' report misrepresented the typical experience on X "with the intention of harming X and its business," the company said in the lawsuit.
Media Matters' President Angelo Carusone called the lawsuit "frivolous" in an emailed statement and said it was "meant to bully X's critics into silence."
"Media Matters stands behind its reporting and looks forward to winning in court," he added.
In an interview with Reuters earlier on Monday, Carusone said the nonprofit's findings flew in the face of X's statements that it had introduced safety protections to prevent ads from appearing next to harmful content.
"If you search for white nationalist content, there are ads flourishing. The system they say exists is not operating as such," he said.
Shareholders of Tesla (NASDAQ:TSLA), which Musk also runs, have raised concerns that Musk's actions could harm the electric car company's business.
New York City Comptroller Brad Lander told Reuters on Tuesday that Tesla's board of directors should sanction Musk if he does not apologize for endorsing an antisemitic comment on X.
X said in the lawsuit on Monday that ads for IBM, Comcast and Oracle (NYSE:ORCL) only appeared alongside hateful content for one viewer, which the company said was Media Matters.
"Data wins over manipulation or allegations. Don't be manipulated. Stand with X," X Chief Executive Linda Yaccarino posted on Monday.
Texas Attorney General Ken Paxton said on Monday his office was opening an investigation into Media Matters and that he was "extremely troubled" by allegations that the group manipulated data on X.
Since Musk purchased Twitter for $44 billion in October 2022, a stream of advertisers have fled the platform, wary of some of Musk's controversial posts and layoffs of employees who worked to moderate content.
The platform's U.S. ad revenue has declined at least 55% year-over-year each month since Musk's takeover, Reuters previously reported.
Yaccarino told employees in a note on Sunday that while some advertisers had paused their investments following the report's publication, the company had been clear about its efforts to fight antisemitism and discrimination.