Almost simultaneously, Texas Attorney General Ken Paxton opened an investigation into the Media Factors for “potential fraudulent activity.” Musk posted the news on his X account, stating that “fraud has civil and criminal penalties.” Musk previously responded to a tweet by former Trump advisor Stephen Miller suggesting conservative attorneys general (like Paxton) seek fraud charges.
Neither Paxton nor X would dispute that Media Factors falsely claiming to have seen ads with pro-Nazi content. In fact, the suit proves that the screenshots posted by the organization are real. But it says the organization “manipulated” the service to make X serve offensive ads. “Media Factors manipulated the algorithms that manage the X user experience to bypass the protections and create images of the largest advertisers paid posts next to racist, incendiary content, leaving the false impression that this pairings are anything but what they are: manufactured, inorganic, and incredibly rare.” The alleged manipulation included creating an account that exclusively followed a combination of big brands and extremist content, then “endlessly scrolling and refreshing his unrepresentative, hand-selected feed” until the two met.
“We will continue our work without interruption.”
Alleged in the lawsuit Media Factors of interference with contract, harm to business, and interference with future economic advantage — claims that can be difficult to prove because of the First Amendment’s high bar for legally prosecuting speech. (Musk famously defeated a libel suit after falsely calling one of his critics a “pedo guy.”) “We’ll continue our work undeterred. If he sues us, we’ll win, ”said the president of the organization, Angelo Carusone The Verge in a previous statement, saying that “Elon Musk has spent the last few days making idle legal threats, raising outlandish conspiracy theories, and lobbying the vicious personal attacks against his ‘enemies’ online.” Carusone echoed the sentiment after the lawsuit was filed. “This is a frivolous case aimed at bullying X’s critics into silence,” he said. “Media Factors stands behind its reporting and looks forward to winning in court.”
As one of the richest men in the world, however, Musk has plenty of resources at his disposal – and X seems to be doing some forum shopping to increase its odds. The company filed its lawsuit in Texas, which it did not Media Factors’ main place of business. As legal blogger Ken White notes, a Texas filing protects X from claims it filed a strategic lawsuit against public participation (or SLAPP), a something it might face at home in California. Another organization that X sued, the Center for Countering Digital Hate, recently filed an anti-SLAPP motion in that state. The case’s transfer also puts it under the Fifth Circuit Court of Appeals, which has proven very sympathetic to conservative figures who claim they were censored — something Musk has made central to his publicity strategy around X.
Yaccarino, on the other hand, insisted that the advertisers will not permanently restore their presence on X. “Some advertisers may have temporarily stopped but I want to record, I have many good conversations today ,” he told employees on all hands after the case, according to luck. But he suggested employees “be as financially responsible as possible” to offset potential losses from advertisers and urged them to “by all means, put your heads down to bring the new company income.”
Update 9:15PM ET: Added statement from Media Factors.
