Washington DC - A US court on Monday rejected social network X's lawsuit against a nonprofit that had reported a spike in misinformation and hate speech on the platform since billionaire Elon Musk's takeover.

X, previously known as Twitter, sued the Center for Countering Digital Hate (CCDH) last July, accusing it of a smear campaign by cherry-picking data that damaged the company's relationship with advertisers and resulted in revenue losses of tens of millions of dollars.

The California court said it was evident the lawsuit was filed to "punish" the nonprofit for publishing research critical of the social network and likely dissuade others from doing so.

"It is impossible to read the complaint and not conclude that X Corp. is far more concerned about CCDH's speech than it is its data collection methods," the court said in its 52-page ruling.

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"It is impossible to imagine that X Corp. would have been motivated to bring suit had CCDH not spoken."

X did not immediately respond to a request for comment.

"We hope this landmark ruling will embolden public-interest researchers everywhere to continue, and even intensify, their vital work of holding social media companies accountable for the hate and disinformation they host and the harm they cause," Imran Ahmed, chief executive and founder of CCDH, said in a statement.

According to misinformation researchers, falsehoods, as well as hateful and racist speech, have sharply risen on X since Musk completed his $44 billion takeover in October 2022.

Since then, the Tesla boss has fired thousands of the platform's employees, cut content moderation, and reinstated many previously banned accounts.

Musk has also seen major advertisers flee the site over the increase in troublesome content and has struggled to build a strong enough subscription base to make up the lost revenue.