Elon Musk's X Corp. has filed a petition to nullify a 20-year-old Federal Trade Commission (FTC) order that restricts its data use and requires regular independent audits. The FTC imposed the order in 2022 after Twitter, which was acquired by Musk in 2022, disclosed a coding error that allowed phone numbers and email addresses shared for two-factor authentication to be used for targeted advertising.
The order, which remains in effect until 2042, requires X Corp. to allow the FTC to monitor its data-handling practices and grants the agency authority to request documents as needed to ensure compliance. Musk has argued that the order is no longer necessary since Twitter no longer exists as a separate entity, having been merged into xAI and then folded into SpaceX.
What Happened
In 2022, Twitter disclosed a coding error that had allowed phone numbers and email addresses shared for two-factor authentication to be used for targeted advertising. The company agreed to pay $150 million in a settlement with the FTC, which imposed the order restricting its data use and requiring regular audits.
Musk has tried to get the order revoked twice before, but was unsuccessful both times. In his latest petition, he argues that the order is no longer necessary since Twitter no longer exists as a separate entity, having been merged into xAI and then folded into SpaceX.
Background and Context
The FTC's order was imposed after Twitter disclosed a coding error that had allowed phone numbers and email addresses shared for two-factor authentication to be used for targeted advertising. The company agreed to pay $150 million in a settlement with the FTC, which imposed the order restricting its data use and requiring regular audits.
Musk has been critical of the FTC's actions, accusing the agency of being "tainted by bias" and arguing that the order is no longer necessary since Twitter no longer exists as a separate entity. However, the FTC has pointed out that Musk's takeover of Twitter raised genuine questions about the company's ability to comply with the order.
One engineer confirmed in a deposition that layoffs and other "cost-cutting pressure and decisions" impaired X Corp.'s ability to put technical restrictions and controls in place around the company's use of contact data. The FTC argued that no one was responsible for about 37 percent of X Corp.'s privacy program controls.
Why It Matters
The case has implications for the adult industry, which relies heavily on data collection and analytics to operate its platforms and services. If Musk is successful in getting the order revoked, it could set a precedent for other companies to disregard similar regulations.
The FTC's order was imposed after Twitter disclosed a coding error that had allowed phone numbers and email addresses shared for two-factor authentication to be used for targeted advertising. The company agreed to pay $150 million in a settlement with the FTC, which imposed the order restricting its data use and requiring regular audits.
Musk has argued that the order is no longer necessary since Twitter no longer exists as a separate entity, having been merged into xAI and then folded into SpaceX. However, the FTC has pointed out that Musk's takeover of Twitter raised genuine questions about the company's ability to comply with the order.
What Comes Next
The FTC is seeking public comments on X Corp.'s petition to nullify the order, which can be submitted until July 2. The agency will then make its determination based on the comments received.
Musk has argued that the order is no longer necessary since Twitter no longer exists as a separate entity, having been merged into xAI and then folded into SpaceX. However, the FTC has pointed out that Musk's takeover of Twitter raised genuine questions about the company's ability to comply with the order.
Key Facts
- The FTC imposed a 20-year-old order restricting X Corp.'s data use and requiring regular audits after Twitter disclosed a coding error in 2022.
- Musk has tried to get the order revoked twice before, but was unsuccessful both times.
- The order requires X Corp. to allow the FTC to monitor its data-handling practices and grants the agency authority to request documents as needed to ensure compliance.
- X Corp. has argued that the order is no longer necessary since Twitter no longer exists as a separate entity, having been merged into xAI and then folded into SpaceX.
- The FTC is seeking public comments on X Corp.'s petition to nullify the order, which can be submitted until July 2.
