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Musk's X Fights Old FTC Data Privacy Settlement
4 Jun
Summary
- X seeks to void a 2022 data privacy settlement from Twitter.
- The settlement involved a $150 million penalty and privacy program.
- X argues the order is costly and outdated for the current company.
Elon Musk's social media company, X, is actively seeking to invalidate a 2022 data privacy settlement that was imposed on Twitter before its acquisition. The Federal Trade Commission announced on Wednesday that it is accepting public comments regarding X's petition to either void or modify this order.
The original settlement, agreed upon in May 2022 with the FTC and Justice Department, addressed Twitter's use of phone numbers provided for two-factor authentication for ad targeting—a practice deemed deceptive. The order mandated a $150 million penalty, a comprehensive privacy program, and limitations on data access.
X asserts that the settlement is excessively costly, diverting approximately $17 million to administrative tasks. The company argues that the entity responsible for the violations no longer exists, and X has since implemented a robust privacy program. Furthermore, X claims the settlement could be leveraged to stifle its hosted viewpoints and impede innovation, particularly in AI development, by diverting engineering resources from critical technologies to compliance paperwork.
The FTC has initiated a public comment period, which will conclude on July 2, before a final commission vote on the petition. Despite X's claims, some public commenters have criticized the company's argument that $17 million in compliance costs is excessive.
