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FTC Again Raises Concern Over Twitter/X Data Security

By Michael DeRienzo, Esq. | Last updated on

There is no denying that Elon Musk has some visionary ideas. Whether he's building electric cars designed to curb the fossil fuel crisis or designing rockets to shepherd humankind to Mars, Musk is shaping the future of the world. Of course, he is not without fault and has been the subject of many legitimate scandals over his career. By and large though, most of his business ventures have been, at least publicly, geared towards the betterment of humanity.

That is why many were dumbstruck that the same man who promised to build a hypertunnel from New York to Washington, D.C. was going to spend $44 billion to buy Twitter. The same Twitter where nameless individuals from across the world engage in hate speech and illegal activities such as terrorism recruitment.

The purchase itself has netted Musk both financial loss and suspicions he may have failed to comply with a 2022 Federal Trade Commission order regarding Twitter's data security and privacy practices.

A Billionaire's Game of Political Chess

How it came to this possibly started with an entirely different world. Politics.

President Donald Trump's four years in office were anything but ordinary. However, one of his more unorthodox traits was his tendency to tweet his thoughts and actions at all hours of the day. President Trump used Twitter so often that he attempted to block certain foes on the social media site.

Then came January 6th when thousands of President Trump supporters stormed the Capitol Building in Washington, D.C. to protest the election results. Shortly thereafter, Twitter banned President Trump from Twitter for inciting a riot.

It is unclear if that incident caused Elon Musk to decide to purchase Twitter. However, before the purchase, Musk argued that he was a "free speech absolutist" who strongly despised the ban for being morally wrong. He also promised to reinstate the account.

The Purchase That Almost Wasn't

On April 5th, Musk accepted an offer to join the Twitter Board of Directors. On April 10th, he changed his mind. On April 14th, he instead made an offer to purchase the company. By April 25th, an agreement was put into place for Musk to purchase Twitter.

It would not end there. Musk later withdrew his offer and the fighting began. Twitter filed suit for breach of contract and the battle raged on for months.

Free Bird or Jail Bird?

On October 28th, Musk announced that the "bird is freed" and the purchase had been completed. In a very public showing, Musk began publicly cleaning house by terminating approximately 5,000 of the 7,500 total employees in a frenzy.

However, this public termination caused a "chaotic environment" that may have broken the agreement with the FTC. According to a filing by the government, Musk's shakeup at Twitter raised serious questions about compliance.

In that decree, Twitter had agreed with the Federal Trade Commission to adhere to strict and secure methods to protect the privacy and security of nonpublic consumer information. In a 2022 settlement, Twitter agreed to pay $150 million for violation of the decree.

One year later, the newly renamed X Corp. sought to terminate the decree.

In response, the government argued that X Corp., and specifically Musk, may have violated the decree again by failing to protect consumer information. The failure was caused by the chaotic environment imposed by Musk himself, which is the reason the FTC cited in investigating data security and privacy at X Corp. Musk had alleged in his filing that the FTC was asking too many questions for political reasons.

A hearing on the matter is scheduled for November.

For now, there are several questions remaining as to whether data security at Twitter/X has been lax. But a big question that may never be solved is why Musk embarked on this $44 billion journey in the first place. While maybe not as exciting as a reusable rocket perfecting its landing, you can still expect plenty of (legal) fireworks ahead for X Corp.

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