In May 2022, Twitter, now known as X after its acquisition by entrepreneur Elon Musk, was fined $150 million by the Federal Trade Commission (FTC). This was due to the platform’s violation of a previous consent decree by inappropriately sharing user phone numbers and email addresses with advertisers. The ruling also imposed stipulations for safeguarding users’ personal data.
After acquiring Twitter, Elon Musk attempted to overturn the consent decree by going to court. Musk argued that the FTC had increased scrutiny on X and pressured a third-party assessor to find faults with its security practices. He referred to the FTC’s actions as “a shameful case of weaponization of a government agency for political purposes and suppression of the truth” in a post on X. However, a federal judge rejected Musk’s motion, ruling that his court lacked the authority to block the FTC’s court order. The judge also blocked Musk’s request to avoid a deposition that’s part of a separate investigation into Twitter. The judge emphasized that X must still adhere to the strict privacy reporting standards imposed by the FTC last year.
The judge listed other issues with X’s argument, including Musk’s direction of terminations, layoffs, or other reductions in X Corp.’s workforce, which affected the security, governance, risk, and compliance team. The judge also noted that the third-party assessor faced delays due to executive turnover at X. Lastly, the judge ruled that Musk can’t avoid being deposed by the FTC, as “the government argues that the major changes to the company appear to have been initiated by Musk himself.”
Musk’s problems with the FTC started when key executives on Twitter’s privacy and security teams departed shortly after his acquisition of the platform. Despite this, Musk seemed keen on complying with the rules, assuring employees that “Twitter will do whatever it takes to adhere to both the letter and spirit of the FTC consent decree.”
However, in March, the FTC stepped up its probe into Musk’s actions in an effort to gather information about the company’s handling of layoffs, X Premium subscriptions, the “Twitter Files,” and other issues.
Meanwhile, the platform faced more controversies as IBM suspended advertising on X after discovering its ads were being placed next to pro-Nazi content. Musk also faced criticism after appearing to endorse an antisemitic post on the platform.
These developments raised concerns about X’s governance and operational practices. The ongoing challenges faced by X under Musk’s leadership underscored the importance of ensuring the security and privacy of user data, as well as the responsible and ethical use of the platform for advertising and content dissemination.
Moving forward, Musk and the leadership at X need to address the multiple issues raised by the FTC and other stakeholders. This includes ensuring compliance with privacy and security standards, addressing internal governance and workforce management, and establishing effective measures to prevent the placement of ads next to inappropriate content. By taking proactive steps to address these concerns, X can work towards rebuilding trust with its users, advertisers, and regulatory authorities. Additionally, Musk and X’s leadership must demonstrate a commitment to responsible and ethical conduct in their operations, communications, and interactions on the platform. Only through concerted efforts to rectify these issues can X regain its standing as a reliable and trustworthy platform for users and advertisers.
