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Biden appointee-led FTC goes after Elon Musk

By Sarah May
|
March 8, 2023

The Biden administration, by way of the Federal Trade Commission, has been pursuing a far-reaching probe of Twitter and its new CEO, Elon Musk, as CNN reports, looking into the company's privacy practices and personnel decisions, among other things.

Acknowledgment by the agency of the ongoing investigation comes amid disclosures made this week in a staff report from the House Select Subcommittee on the Weaponization of the Federal Government about what panel members referred to as the FTC's efforts to “harass” Twitter and Musk.

FTC probe acknowledged

According to CNN, the FTC is in the process of probing potential violations of a settlement agreement into which Twitter entered back in 2011.

The purpose of that agreement was to compel Twitter to bolster user data protections, and the investigation of suspected breaches of the pact has the potential to cause the social media giant serious problems, including greater restrictions on operations, costly fines, and more.

As part of its review, the FTC has requested testimony from Twitter concerning staff changes in the wake of Musk's takeover, has asked about the company's release of internal communications to a select group of journalists responsible for the so-called “Twitter files” expose, and has sought information regarding the Twitter Blue subscription program and other revenue-generating initiatives.

The House panel noted that over the course of correspondence that included a dozen demand letters to Twitter, the FTC has issued 350 requests for information, a volume that has led committee Republicans to accuse the agency of harassment.

Panel report blasts FTC

In a Tuesday press release, the House subcommittee took direct aim at the administration agency's probe, stating that the unwieldy and repeated information requests sent to the firm and its head show “how the FTC has been attempting to harass Twitter and pry into the company's decisions on matters outside of the FTC's mandate.”

Furthermore, the committee opined, the “timing, scope and frequency of the FTC's demands to Twitter suggest a partisan motivation to its action.”

“When Musk took action to reorient Twitter around free speech, the FTC regularly followed soon thereafter with a new demand letter. The ostensible legal basis for the demand letters – including monitoring Twitter's privacy and information security program under a revised consent decree between the company and the FTC – fails to provide adequate cover for the FTC's action,” the release continued.

The panel further noted, “A number of FTC's demands have little to no nexus to user's privacy and information” and cited the agency's demands for things such as every internal communication “relating to Elon Musk” since the day he bought Twitter, information relating to journalists' First Amendment-protected work concerning the company, details about why the company is “selling its office equipment,” and reasons behind the termination of former company employee and FBI alumnus Jim Baker.

FTC responds

Not surprisingly, the FTC took issue with the panel's characterization of its probe, releasing a statement suggesting that the inquiry into Twitter and Musk is in keeping with the agency's mission and its formal legal duty to enforce the terms of the aforementioned consent decree related to safeguarding user data, as CNN noted.

“Protecting consumers' privacy is exactly what the FTC is supposed to do,” maintained Douglas Farrar, a spokesperson for the agency.

Farrar continued, “It should come as no surprise that career staff at the commission are conducting a rigorous investigation into Twitter's compliance with a consent order that came into effect long before Mr. Musk purchased the company.”

Last year, FTC Chair Lina Khan said in Senate testimony that Twitter executives could face personal liability if the agency discovered violations of an FTC consent agreement, though she did not reveal the existence of the current probe.

Musk, panel concur

For his part, Musk has responded to the panel's staff report by declaring the FTC's acknowledged probe of Twitter to be “a shameful case of weaponization of a government agency for political purposes and suppression of the truth.”

The Twitter CEO also described the investigation as “a serious attack on the Constitution by a federal agency.”

Musk's take appears to be in close alignment with that of the Republicans on the House subcommittee's report, which said that the “strong inference” to be gleaned from the FTC's conduct “is that Twitter's rediscovered focus on free speech is being met with politically motivated attempts to thwart Elon Musk's goals.”

“The FTC's demands did not occur in a vacuum. They appear to be the result of loud voices on the left – including elected officials – urging the federal government to intervene in Musk's acquisition and management of the company,” the report continued, but precisely what actions the panel might take to address the agency's allegedly partisan scrutiny of Twitter, only time will tell.