Eliza Labs and founder Shaw Walters filed a federal antitrust law against social media platform X on August 27th.
According to the lawsuit, the plaintiff alleges that the social media platform fraudulently extracted technical information about AI agents and fraudulently extracted competing products before launching them.
The complaint calls for more than $75,000 in damages and an immediate recovery of the account.
In a statement on August 28th, Walters described the lawsuit as a last resort after months of failing to negotiate.
He said:
“X and Xai know this to some extent. They filed a lawsuit alleging that Apple and Openai are committing the same anti-competitive behavior that X is doing to us.”
Walters added that X first widely adopted Eliza’s open source AI agent framework before inviting collaboration.
Following a meeting at X headquarters in February, the platform called for Eliza to purchase an annual enterprise license of $600,000, despite already paying more than $20,000 a year.
Antitrust claims
Antimonopoly laws challenge practices that harm fair competition, such as monopolies and anti-competitive behavior, to protect consumers and secure open markets.
Eliza’s complaints allege X violated section 2 of the Sherman Act by leveraging its short social media monopoly to curb AI competition.
The lawsuit details how X suspended Eliza’s account in June 2025, and called for extensive technical documentation under the pretense of account recovery.
Walters claims that X used this information to develop nearly identical AI features including 3D avatars, voice integration and telephone capabilities, and was launched through Xai’s products.
He added that X requested a detailed explanation of Eliza’s framework architecture, endpoint features and implementation details while developing competing products.
Relief includes restoring the platform
The suit seeks X for multiple forms of relief, including an immunity of Section 230 of anti-competitive exhaustion, an injunction that prevents future exclusive conduct, and a repair of accounts through full platform access.
Financial remedies include unfair enrichment from copies of Eliza’s technology, compensation for unfair misrepresentation, damages of unfair competition, and damages of high notes under the provisions of the Sherman Act.
The plaintiff also requires punitive damages and attorney’s fees. The lawsuit comes days after Elon Musk’s Xai sued Apple and Openai on August 25th.
Musk’s lawsuit alleges that companies conspired to curb AI competition through Apple’s exclusive ChatGPT integration and the goodwill of the App Store. The lawsuit argues that the partnership between Apple and Openai makes it impossible for non-Openai AI companies to reach #1 on the App Store.
The parallel lawsuit emphasizes escalating the legal battle over AI market management, and Musk pursues antitrust claims while facing very similar allegations from Eliza Labs.
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