The American Antitrust Institute (AAI) filed an amicus brief in the U.S. Court of Appeals for the Fifth Circuit in X v. World Federation of Advertisers, No. 26-10394, urging the court to clarify the distinction between the antitrust injury requirement and the substantive elements of an antitrust violation. AAI filed in support of neither party.
The case arises from allegations by Elon Musk’s X (formerly Twitter) that major national advertisers, acting through the World Federation of Advertisers’ Global Alliance for Responsible Media (GARM), violated Section 1 of the Sherman Act by collectively withholding advertising from X. The district court dismissed X’s claims, finding both that X failed to allege harm to competition and that it failed to allege antitrust injury.
AAI’s brief takes no position on whether X’s complaint should ultimately be dismissed. It argues that the district court conflated two distinct inquiries. Antitrust injury asks whether a private plaintiff’s claimed injury stems from a competition-reducing aspect of the alleged violation and is therefore the type of injury Congress authorized plaintiffs to redress. Whether the challenged conduct actually harms competition, by contrast, goes to the merits of the alleged antitrust violation.
AAI explains that courts applying the antitrust injury doctrine should assume the existence of an antitrust violation and ask whether the plaintiff’s alleged injury flows from the competition-reducing aspect of that violation. Fifth Circuit and Supreme Court precedent follow that approach. If a court instead determines that the complaint does not plausibly allege harm to competition, AAI argues, it should resolve that issue on the merits under the pleading standard established in Bell Atlantic Corp. v. Twombly, rather than recast the deficiency as a lack of antitrust injury, which is an element of antitrust standing.
Applying that distinction, AAI argues that X has adequately alleged antitrust injury. X alleges that a group of buyers with collective monopsony power boycotted X as a seller of digital advertising space, preventing X from competing for advertising sales and depriving it of resulting revenue. Assuming the alleged boycott unlawfully reduced competition, those losses flow from the competition-reducing aspect of the alleged conduct. Whether X has plausibly alleged that the boycott actually harmed competition is a separate question on which AAI takes no position.
AAI urges the Fifth Circuit to clarify that when a court concludes that a plaintiff has failed to plausibly allege harm to competition, it has no occasion to consider antitrust injury. The proper inquiry is instead whether the complaint states a substantive antitrust claim under Twombly.
The brief was written by AAI President Randy Stutz with assistance from AAI Senior Counsel David O. Fisher.
Read the full brief: AAI Amicus Brief in X v. World Federation of Advertisers
