Elon Musk said former X advertisers may have violated the RICO Act. Here’s what a RICO lawyer thinks.

Elon Musk’s relationship with advertisers has reached a new low.

Musk’s X filed an antitrust lawsuit against advertisers last week, accusing them of illegally boycotting the platform to “collectively withhold billions of dollars in advertising revenue.”

Musk then went on to encourage companies that have been “systematically boycotted by advertisers” to sue, claiming there could be “criminal liability through the RICO Act.”

The RICO Act is a federal law that targets crimes such as fraud, theft, bribery, gambling, extortion, and arson. It stands for Racketeer Influenced and Corrupt Organizations Act and was originally used to take down the mafia.

Jeffrey Grell, a lawyer specializing in RICO, told Business Insider that RICO only deals with torts and that’s not the case here. “You don’t have the right to do business with anybody,” he said.

He added that there is “absolutely no reason” why lawyers should not file a civil claim if they believe they have a case.

“I think Musk is trying to get some PR benefit out of RICO without actually filing a RICO claim here,” Grell said. “If his lawyers thought he had a civil RICO claim, they most likely would have included it in the claim they filed.”

Musk took over Twitter, which he later renamed X, in October 2022. Musk quickly removed features that moderated inflammatory speech and disinformation. Within a year, X’s top advertisers stopped buying space on the platform, fearing their products and services would be associated with questionable content.

Advertising is an important part of a social media site’s profitability.

While Musk called himself a champion of free speech, he was accused of promoting anti-Semitism on X, which did not help his situation with advertisers. And When asked what he would do about the hateful content, he publicly told advertisers who had pulled out to “fuck off.” His efforts to lure them back haven’t paid off yet. And now he’s suing them.

The antitrust lawsuit filed by X named the Global Alliance for Responsible Media and the World Federation of Advertisers as defendants, along with its members CVS Health, Unilever, Mars and Ørsted. After the lawsuit was filed, GARM announced that it would fight the lawsuit but also cease operations.

X argues in his lawsuit that the advertisers “acted in parallel by ceasing their purchases of advertising on Twitter, which is a clear departure from their previous purchasing pattern.”

But trading in parallel with others is not criminal, Grell said, likening it to the way gas stations monitor each other’s prices and adjust them without consulting each other.

Similarly, Grell said advertisers might see competitors pull ads from Musk’s X and think, “‘I’m going to get off Twitter. I don’t want to get blacklisted if I advertise on a platform that gets canceled.'”

“That’s just parallel behavior,” he said.

The post Elon Musk Said Former X Advertisers May Have Violated the RICO Act. Here’s What a RICO Lawyer Thinks appeared first on Business Insider.