The FTC has telegraphed what appears to be a now inevitable investigation into Twitter’s internal data processing practices as the company continues to lay off key staff and improvise new features. “No CEO or company is above the law,” the agency said in a statement — and if Elon Musk’s Twitter continues its current spree, they could violate the FTC’s order and face dire consequences.
To be clear, the FTC has not announced an investigation into Twitter, Elon Musk, or even whether they are collecting information in the service of such an investigation. It also couldn’t confirm that the investigation was underway. But circumstantial evidence, common sense and the ominous statement released today leave no doubt that the company is in the crosshairs of the agency.
As part of its regular oversight duties, the FTC investigates complaints from consumers, businesses, and anyone with a business sense about such things as deceptive advertising, breached privacy promises, unauthorized business arrangements, and so on. But in 2011, Twitter agreed to a consent decree with the regulator after it was found to have misused user data. It was also found to have done this again for years in an investigation that culminated in a $150 million settlement earlier this year, so this is no red tape.
This decree required Twitter to establish and maintain a program to ensure and regularly report that the new features do not further misrepresent “the extent to which it protects the security, privacy, confidentiality or integrity of non- maintains and protects public consumer information.” The revised order provides more oversight and gives the FTC more power, as Twitter apparently needed both a stick and a carrot.
The gist of this is that Twitter is already in the doghouse with the FTC, and it has specific and legally binding requirements regarding what it can and cannot do with data, and how it checks for compliance.
Around the time of the settlement, Elon Musk took the stage and now we all have… this. But last night’s news various data processing executives, no doubt important to follow the line with a vigilant supervisor, reportedly all left at once. Literally minutes after I wrote this paragraph, Yoel Roth, the company’s head of trust and security, was also due to leave.
This would be troubling for any company, at any time, under any level of federal oversight. But for Twitter, the outgoing chiefs might as well have hired a skywriter to spell “INVESTIGATE ME” in big letters above Twitter headquarters. (Of course, that could apply to any number of downtown San Francisco businesses, but right now there’s little doubt.)
The amount of changes, new products, eliminations of various departments and processes (many of which had to do with privacy, fairness, data processing and other critical topics) does not mean that Twitter is necessarily in violation of the consent decree. But with things going as they are, it’s hard to imagine that it’s in agreement now, or that it is, will stay that way for long.
However, it is important to understand that the FTC is not like the FBI, kicking in doors and arranging evidence in damning dioramas. The FTC conducts its investigations privately and comprehensively – they cannot and will not publicize the fact that they are investigating a company for some violation until there is a legally binding consequence, such as a signed consent decree, a settlement or a decision to go through the Department. to be brought to justice by the judiciary.
While many expected the FTC led by tech skeptic and very smart person Lina Khan to be more proactive, what it can do is legally limited. It’s actually a little surprising that the agency got just as snappy as it did in the full statement:
We are following recent developments at Twitter with great concern. No CEO or company is above the law and companies must follow our consent decisions. Our revised consent brief gives us new tools to ensure compliance, and we are willing to use them.
While it stops by saying, “We’re sharpening our knives,” this statement nonetheless carries an equally strong implication that they’ll be calling Twitter as soon as possible. (A juicy tidbit discovered by Brian Fung from CNNwhile enticing, may involve ongoing discussions about the $150 million settlement, so don’t get too excited.)
If they decide to pursue an investigation, which would likely happen if there were any red flags at all, let alone so many, it will be done confidentially — but more importantly, it’s not secret.
That means that while the FTC’s policy is not to disclose or comment on an investigation, any company or individual under investigation can do so at any time if they wish. So if the FTC makes a formal request for certain information from Twitter, or fires its executives (current or former), they may decide to make that information public.
In fact, Twitter did this in late 2020, long before the settlement with the FTC was finalized. After all, you don’t want your investors to be the last to hear something like a $150 million indictment, even if you risk telling them you’re being discovered by astute journalists.
So if the FTC investigates Twitter, it’s much more likely we’ll hear about it from the company — in an investor filing or, more likely, from its careless and elaborate CEO at one of its increasingly frequent emergency meetings.
The state of chaos at Twitter makes the mundane comment that we don’t know what it will look like in six months is a gross understatement, meaning the entire company may have changed ownership or business model before the FTC does its (hypothetical) work. Still, that won’t take the swinging company off the hook. Twitter’s leadership, or what’s left of it, may want to prioritize survival and compliance from federal regulators before returning to the now regularly scheduled chaos.