Elon Musk’s social media company X filed a lawsuit against liberal advocacy group Media Matters for America on Monday, saying it manufactured a report to show advertisers’ posts alongside neo-Nazi and white nationalist posts in order to “drive advertisers from the platform and destroy X Corp.”

Media Matters, a Washington, D.C.-based non-profit, called the lawsuit “frivolous.”

Advertisers Fleeing the Site

Advertisers have been fleeing the site formerly known as Twitter over concerns about their ads showing up next to pro-Nazi content — and hate speech on the site in general — while billionaire owner Musk has inflamed tensions with his own posts endorsing an antisemitic conspiracy theory.

IBM, NBCUniversal and its parent company Comcast said last week that they stopped advertising on X after the Media Matters report said their ads were appearing alongside material praising Nazis. It was a fresh setback as the platform tries to win back big brands and their ad dollars, X’s main source of revenue.

Media Matters Report

The Media Matters report pointed to ads from Apple and Oracle that also were placed next to antisemitic material on X. On Friday, it said it also found ads from Amazon, NBA Mexico, NBCUniversal and others next to white nationalist hashtags.

But San Francisco-based X says in its complaint filed in federal court in Fort Worth, Texas, that Media Matters “knowingly and maliciously” portrayed ads next to hateful material “as if they were what typical X users experience on the platform.”

X’s complaint claims that Media Matters manipulated algorithms on the platform to create images of advertisers’ paid posts next to racist, incendiary content. The juxtapositions, according to the complaint, were “manufactured, inorganic and extraordinarily rare.”

It says Media Matters did this by using X accounts that just followed X users known to produce “extreme fringe content” and accounts owned by X’s major advertisers. This, the complaint says, led to a feed aimed at producing side-by-side placements that Media Matters could then screen shot in an effort to alienate X’s advertisers.

Media Matters said Monday that it stands by its reporting and expects to prevail in court.

“This is a frivolous lawsuit meant to bully X’s critics into silence,” the non-profit’s president, Angelo Carusone, said in a prepared statement.

Texas Investigation

Meanwhile, Texas Attorney General Ken Paxton announced his office is launching an investigation into Media Matters for possible fraudulent activity related to the group’s report.

Advertisers have been skittish on X since Musk’s takeover more than a year ago.

Musk has also sparked outcry this month with his own posts responding to a user who accused Jews of hating white people and professing indifference to antisemitism. “You have said the actual truth,” Musk tweeted in a reply last Wednesday.

Musk has faced accusations of tolerating antisemitic messages on the platform since purchasing it last year, and the content on X has gained increased scrutiny since the war between Israel and Hamas began.

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X CEO’s Statement

X CEO Linda Yaccarino said the company’s “point of view has always been very clear that discrimination by everyone should STOP across the board.”

“I think that’s something we can and should all agree on,” she wrote on the platform last week.