Texas Attorney General Ken Paxton has opened an investigation into progressive non-profit media watchdog Media Matters for America relating to a potentially fraudulent report the company published about X and its advertising practices.
On Monday, the social media service acquired by Elon Musk last year, filed suit against Media Matters in federal court after the advocacy group published a report showing research that ads on X showed up next to antisemitic content.
Just hours after the suit was filed, Paxton's office announced its investigation into the organization's 'potential fraudulent activity.'
A statement from his office announcing the investigation read: 'Attorney General Paxton was extremely troubled by the allegations that Media Matters, a radical anti-free speech organization, fraudulently manipulated data on X.com.'
Paxton said: 'We are examining the issue closely to ensure that the public has not been deceived by he schemes of radical left-wing organizations who would like nothing more than to limit freedom by reducing participation in the public square.'
The watchdog report, in conjunction with a post last week written by Musk appearing to endorse a post that claimed Jews have pushed cultural hatred against whites, caused a fresh wave of advertisers to pause their spending on the platform.
X has dropped a 'thermonuclear' lawsuit on Media Matters for America after the progressive organization published research asserting that the company places ads next to antisemitic content
Brands such as Apple, IBM, Warner Bros. Discovery, and Sony have all suspended their ad spending on the platform.
X has rejected Media Matters' claims, arguing they do not represent the average user experience. And on Friday, Musk assured those watching that a 'thermonuclear lawsuit' against the advocacay group and its backers was soon to come.
Said suit was filed in the US District Court for the Northern District of Texas and claims that the progressive organization knowingly attempted to damage the company's relationship with advertisers.
'Media Matters has manipulated the algorithms governing the user experience on X to bypass safeguards and create images of X’s largest advertisers' paid posts adjacent to racist, incendiary content, leaving the false impression that these pairings are anything but what they actually are: manufactured, inorganic and extraordinarily rare,' X's attorneys wrote.
In a statement responding to the suit, Media Matters president Angelo Carusone dismissed the legitimacy of the lawsuit in a statement.
'Tihis is a frivolous lawsuit meant to bully X's critics into silence.'
He added that the organization 'stands behinds its reporting and looks forward to winning in court.'
Since Musk's dramatic takeover of the company formerly known as Twitter, brands have become hesitant to advertise on X because Musk made it clear he would relax its content-moderation practices.
Following the controversial X post last week, in which Musk agreed with an account that claimed Jewish communities push 'hatred against whites that they claim to want people to stop using against them,' Jewish groups were quick to condemn the SpaceX founder.
On Sunday, Musk wrote that the claims he is an antisemite could not be 'further from the truth.'
Texas Attorney General Ken Paxton announced Monday that he had launched an investigation into Media Matters for the potentially fraudulent report
X CEO Linda Yaccarino - a well-connected ad executive - said during a staff meeting that she had discussed the current issue with X's advertisers and was working to smooth things out
The lawsuit filed against Media Matters asks the organization to take down its published research, and is also aseeking unspecified monetary damages and attorneys' fees.
Linda Yaccarino, who was brought aboard X as CEO in June and is a longtime, well-connected advertising executive, said that the information posted by Media Matters was reflective of the experience of just one account.
'If you know me, you know I'm committed to truth and fairness,' she said in a statement. 'Data wins over manipulation or allegations. Don't be manipulated. Stand with X.'
On Monday, Yaccarino told X's employees that she had been in conversation with advertisers about the issue and remains committed to defending the company.
The New York Times reported that she said X wants to 'work with all of our partners who stand with us and believe in the power and the necessity of free speech.'
'Sometimes in life and in business, standing for your values is the truly defining thing that makes leaders, and we’re going to hold on to that and keep pushing forward. No critic is ever going to deter us from our mission to keep fighting and protecting free speech,' she continued.
She focused the blame surrounding X's current major issue on Media Matters and did not address Musk's post. She also encouraged employees to limit their business spending to absolute necessities only.