(By You Yunting) In April 2024, Elon Musk’s X platform sued the World Federation of Advertisers (WFA) and major advertisers including Unilever and Mars for their concerted boycott against the X platform with the organization of Global Alliance for Responsible Media (GARM), constituting a horizontal monopoly agreement in violation of antitrust law and causing it billions of dollars in losses. In March 2026, the U.S. District Court for the Northern District of Texas dismissed the lawsuit at the preliminary hearing. Today we will explore how this case might be handled if it were brought under Chinese law.
I. Case Background
GARM (which was dissolved after the lawsuit was filed), established by WFA together with companies including Unilever and Mars, developed comprehensive “brand safety” standards to define when to keep brand ads from certain online content and how to categorize the risk levels of sensitive content. After Elon Musk acquired Twitter in 2022, WFA organized a boycott against the platform for its potential failure to comply with these standards. X (formerly Twitter), the plaintiff, argued that the boycott had caused it billions of losses in ad revenue and damaged its profitability, equity value, and goodwill.
However, the court held that the antitrust law is intended to protect competition, not competitors. To prevail, the plaintiff must prove that the defendants unlawfully restrained competition and ultimately harmed consumers’ interests, which X failed to establish. Therefore, the commercial losses it suffered did not necessarily constitute antitrust injury. The core reasoning of the judgment was that X failed to establish the antitrust injury, as the court recognized the antitrust law to protect competition rather than competitors. Typical antitrust injury includes price increases or output reductions, ultimately harming consumers. In this case, X’s losses were viewed as the natural result of competition itself: advertisers simply chose X’s competitors over X. The defendant advertisers were pursuing their own collective interests, rather than the interests of X’s competitors, i.e., other social media platforms. Moreover, no competitor was found to have directed or participated in the boycott.
II. Challenges of Initiating Civil Litigation to Address the Case in China
If this case occurred in China, how might a Chinese court rule? We shall first refer to the legal provisions. In this case, advertisers act as competitors on the demand side of the advertising market. The collective refusal by advertisers to place ads on X arranged by WFA and GARM constitutes a typical joint boycott of transactions. Under Article 17 of China’s Anti-Monopoly Law, competing operators are prohibited from reaching monopoly agreements involving joint boycotts of transactions. Article 12 of the Provisions on Prohibiting Monopoly Agreements further bans competing operators from reaching monopoly agreements on joint boycotts of transactions to jointly refuse to purchase or sell commodities of specific operators. In addition, WFA and GARM may be legally classified as industry associations, and Article 21 of China’s Anti-Monopoly Law explicitly prohibits such associations from arranging for operators in the industry to engage in any monopolistic conduct prohibited by law.
However, in such cases, seeking legal remedies through civil litigation is difficult due to the heavy burden of proof and high threshold for liability finding. Although Article 17 of China’s Anti-Monopoly Law provides that a monopoly agreement on joint boycotts of transactions concluded among competing operators constitutes a violation of law per se, Chinese courts still apply traditional tort reasoning in civil litigation, requiring the plaintiff to prove: (1) the defendant engaged in monopolistic conduct; (2) the conduct had the effect of excluding or restricting competition; (3) the plaintiff suffered losses as a result; and (4) there is a causation between the losses and the conduct. Thus, X shall show that the advertisers’ boycott has caused it financial losses and establish the causation between the losses and the monopolistic conduct. Furthermore, X shall demonstrate that the advertisers’ boycott has caused actual harm to market competition or consumer interests.
A typical antitrust case published by the Supreme People’s Court in 2024 illustrates these difficulties where the plaintiff lost the case at first instance and reversed the judgment on appeal. In that case, a company in Yunnan (Company R), together with seven other rice noodle manufacturers and individuals, entered into exclusive supply agreements with distributors and vendors, forcing them to purchase only from designated manufacturers and imposing penalties or supply cut-offs on violators. The eight manufacturers also unified supply and retail prices and enforced the joint boycott through guarantees and reward-punishment mechanisms. As a result, the original manufacturer, Company Y, lost customers and was forced to cease production and exit the market.
Company Y then sued the eight manufacturers and individuals for their conclusion and implementation of horizontal monopoly agreements involving price fixing and joint boycotts of transactions, claiming for economic losses. The first-instance court found that the defendants had concluded but not implemented a horizontal monopoly agreement on price fixing and had not concluded an agreement on joint boycotts of transactions. It ordered the defendants to jointly pay Company Y RMB 20,000 in reasonable expenses and dismissed the rest of the claims.
Company Y appealed. Despite the plaintiff’s failure to provide concrete evidence of losses, the Supreme People’s Court, taking into account factors such as the defendants’ subjective malice, the duration of the alleged monopolistic conduct and its impact on Company Y, finally overturned the first-instance judgment and ordered Company R to compensate Company Y RMB 1.1 million, with the other defendants jointly and severally liable for Company R’s compensatory obligations.
When introducing the significance of the case, the Supreme People’s Court noted: rice noodle is a daily consumer product beloved by local people in Yunnan; by properly handling this “small but important matter” concerning people’s vital interests, the judgment has demonstrated the spirit of antitrust rule of law and has positive significance for regulating monopolistic conduct in livelihood-related sectors. From this perspective, the dispute between X—a global mass media platform owned by the world’s richest man—and multinational advertisers clearly has little connection to people’s livelihood. If the case were heard in China and dismissed at first instance, it would be uncertain whether it could be overturned on appeal.
III. Difficulties of Case Filing in Administrative Complaints in China
If X were to file an antitrust complaint with the State Administration for Market Regulation (SAMR) or provincial market regulation authorities, as long as the relevant authorities were willing to file a case for investigation, there would be a high possibility of finding a violation. The focus of investigation would be whether the conduct constituted a horizontal monopoly agreement involving joint boycotts of transactions by law.
Where advertisers has coordinated through an industry association to collectively decide not to place advertisements on X, Article 12 of the Provisions on Prohibiting Monopoly Agreements, prohibiting competing operators from jointly refusing to purchase or sell commodities of specific operators, shall apply. Chinese enforcement and judicial practice tends to apply the per se rule for preliminary findings, which means that once evidence shows the existence of such an agreement or concerted practice, its effect of excluding or restricting competition can be presumed, without requiring the enforcement agency first to prove consumer harm or specific anti-competitive effects.
Advertisers can only defend themselves by claiming legitimate purposes. However, legitimate purpose is not an independent defense under Chinese antitrust law unless the conduct meets the exemption conditions under Article 20 of the Anti-Monopoly Law.
The advertisers may argue for an exemption under Term 2 of Article 20, claiming that their conduct aims to improve product quality, reduce costs, enhance efficiency, unify product specifications or standards, or implement specialization of labor. However, “brand safety” is difficult to be established as unified standards. It is better understood as unilateral commercial preference of advertisers rather than product specifications or technical standards. Even if treated as an act of standardization, the re is still a threshold to apply the provision: operators shall also prove that such conduct will not severely restrict competition and will enable consumers to share the resulting benefits.
In practice, it is extremely difficult to meet the threshold. If the joint boycott leads to a sharp decline in X’s advertising revenue and market share, it may be deemed to have severely restricted competition in the advertising supply market. Consumers—including advertisers and ordinary users—may also be adversely affected by fewer platform choices and reduced diversity in the advertising market.
Considering the relatively clear facts regarding joint boycotts, and multiple major advertisers involved with the arrangement of the industry association, enforcement authorities are highly likely to find the conduct constitutes an illegal antitrust agreement. The advertisers’ claims for exemption are unlikely to fully meet the required criteria. Accordingly, the sanctions they may face include an order to cease the illegal conduct, disgorgement of illegal gains, and a fine ranging from 1% to 10% of the preceding year’s sales revenue.
However, the difficulty in filing an administrative complaint in this case lies primarily in placing the case on file for investigation. Antitrust cases are technically complex and typically time-consuming, but there are fewer than 1,000 antitrust enforcement officers nationwide. As a result, although SAMR receives numerous complaints regarding illegal monopolistic conduct each year, relatively few are formally filed and sanctioned. If a case falls within SAMR’s priority enforcement scope, the likelihood for the case to be placed on file would be correspondingly higher. In the present case, two key aspects have a negative impact on case filing: first, regulation on the platform economy; and second, an organized horizontal cartel.
While the platform economy is indeed a regulatory focus, the emphasis is on joint boycotts of transactions conducted by platforms themselves. The Guidelines on Antitrust Compliance for Internet Platforms issued in February 2026 stipulates that platform operators with competitive relationships shall avoid entering into horizontal monopoly agreements through joint boycotts of transactions. In the present case, however, it is the advertisers within the platform—not the platform itself—who have engaged in the joint boycotts of transactions, which falls outside the primary regulatory focus.
The case also involves cartel behavior organized by an industry association. Yet, for such cases, regulators are more concerned with livelihood-related sectors. Unlike previous livelihood-related cases which are prioritized for investigation, such as cases in pharmaceuticals, utilities, building materials, or financial services that directly impact people’s cost of living, the joint boycott of transactions involved in the present case primarily affects the platform’s interests and has only an indirect impact on consumers’ legitimate rights and interests.
Finally, antitrust law is not a cure-all. Returning to the case itself: the advertisers’ boycott arose after Elon Musk’s acquisition of Twitter and his subsequent relaxation of platform oversight, particularly with respect to politically incorrect speech. When a joint boycott implicates public interests such as content safety or protection of minors, courts and regulators will naturally be more cautious. If the “Hardcore Alliance”, the largest alliance of Chinese smartphone manufacturers, collectively refused to pre-install an app due to “vulgar content” potentially harming minors, would regulators view this as a reasonable response or an abuse of market power? In my view, the former is more likely. After all, such conduct is closely tied to the fulfillment of corporate social responsibility.
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