Elon Musk's X Corp. on Monday sued nonprofit Media Matters for driving advertisers away from the platform formerly known as Twitter by portraying it as rife with anti-Semitic content.
In a lawsuit filed in U.S. federal court in Texas, X accuses the organisation of "tricking the algorithm into thinking Media Matters wanted to view both hateful content and content from large advertisers."
Apple, Comcast, NBC Universal and IBM were among high-profile brands that paused advertising on X last week after Media Matters reported finding ads displayed with pro-Nazi content.
The advertising exodus also came in the wake of Mr. Musk endorsing an anti-Semitic conspiracy theory.
"This is a frivolous lawsuit meant to bully X's critics into silence," Media Matters president Angelo Carusone said in response to an AFP inquiry.
"Media Matters stands behind its reporting and looks forward to winning in court."
The White House has condemned Mr. Musk, the world's richest person, for "abhorrent promotion" of anti-Semitism.
The White House was reacting to a post by Mr. Musk in which the controversial Tesla and SpaceX tycoon replied to an anti-Semitic post on X with the words: "You have said the actual truth."
The original post has been widely seen as a reference to a longtime false conspiracy theory among White supremacists that Jews have a secret plan to bring illegal immigrants into the United States to move U.S. demographics away from a white majority.
Most notoriously, the idea was promoted by the man who carried out a mass shooting at a synagogue in Pittsburgh in 2018, killing 11 persons.
Referring to Mr. Musk's post, White House spokesman Andrew Bates said it was "unacceptable" to repeat such a "hideous lie."
The suit filed on Monday does not mention Mr. Musk's endorsement of the conspiracy theory, instead blaming recent ad woes on Media Matters.
"Media Matters knowingly and maliciously manufactured side-by-side images depicting advertisers' posts on X Corp.'s social media platform beside Neo-Nazi and white-nationalist fringe content and then portrayed these manufactured images as if they were what typical X users experience," the lawsuit contended.
X accused Media Matters of duping its algorithm by following only accounts known for extreme, fringe content along with big-name brands.
The result was a feed "precision-designed" to produce the kind of side-by-side ad and content pairings that alienated X advertisers, the suit maintained.
X asked the court to order Media Matters to pay unspecified cash damages and to take down the report.
In the year since taking over Twitter, now rebranded as X, Mr. Musk has gutted content moderation, restored accounts of previously banned extremists, and allowed users to purchase account verification, helping them profit from viral -- but often inaccurate -- posts.
An X executive told AFP that it did a "sweep" of accounts pointed out by Media Matters and they will no longer be able to make money from ads.
The posts themselves will be labeled "sensitive media," according to the executive.
