X, formerly Twitter, has sued non-profit media watchdog group Media Matters for America after a report from the organization led to a brand exodus. Several companies have pulled ads from the social media platform after Media Matters reported last week that the firm “has been placing ads for major brands…next to content that touts Adolf Hitler and his Nazi Party.” X CEO Linda Yaccarino called the report “misleading and manipulated.”

X takes Media Matters to court over a “misleading” report

In its report, Media Matters provided several examples of ads from companies like Apple, Oracle, Xfinity, and IBM appearing on pro-Hitler, Holocaust denial, white nationalist, pro-violence, and neo-Nazi accounts or pro-Hitler posts. This is despite Yaccarino’s assurance that brands are “protected from the risk of being next to toxic posts on the platform” and that the firm is committed to “combating antisemitism.”

Media Matters also targeted X owner Elon Musk who recently endorsed an antisemitic conspiracy theory. He called a post attacking Jewish people the “actual truth.” Following these events, many companies have stopped advertising on X, including Apple, its biggest advertiser. Disney, IBM, Lionsgate, Paramount Global, NBCUniversal, and Warner Bros. Discovery are a few other big names that have pulled ads from the platform.

Following this brand exodus, Musk threatened to sue Media Matters. X has now followed up with a formal lawsuit against the non-profit. In its complaint, the firm said this is “a blatant smear campaign” from Media Matters to drive advertisers from X. The organization has “falsely portrayed” X as an unsafe platform for advertisers for the past several years, it alleged.

“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,” part of the complaint reads (via The Verge).

Yaccarino says this is a temporary pause from advertisers

According to X, Media Matters manufactured ads next to pro-Hitler posts using some clever tactics. It created an account that exclusively followed major brands and extremist content. Then, the organization started “endlessly scrolling and refreshing its unrepresentative, hand-selected feed” until it saw the desired result. “Media Matters chose to maliciously misrepresent the X experience with the intention of harming X and its business,” the firm said.

Yaccarino provided further proof that Media Matters manipulated X algorithms. According to the X CEO, “not a single authentic user on X saw IBM’s, Comcast’s, or Oracle’s ads next to the content in Media Matters’ article. Only two users saw Apple’s ad next to the content, at least one of which was Media Matters. Data wins over manipulation or allegations.”

In a note to employees, Yaccarino said that advertisers have temporarily paused investments because of the misleading and manipulated article. “I had several really good conversations today,” she told employees at a separate all-hands after the lawsuit, Fortune reports. X appears confident that it has a strong case against Media Matters and that advertisers will be back soon.

Texas Attorney General Ken Paxton has also opened an investigation into Media Matters for “potential fraudulent activity” after X complained that the non-profit manipulated data to harm its business. “We are examining the issue closely to ensure that the public has not been deceived by the schemes of radical left-wing organizations…” Paxton said in a press release.