Judge Refuses To Scrap X Corp. Deal With FTC Over Ad-Targeting Snafu

A federal judge has rejected X Corp.'s request to modify or terminate a Federal Trade Commission order that requires the platform to maintain a privacy and security program, and to obtain independent evaluations of that program.

In a ruling issued Thursday, U.S. District Court Judge Thomas Hixson in the Northern District of California essentially said he lacked authority to modify or terminate an order issued by the FTC. The decision came in response to claims by X Corp. (formerly Twitter) that the FTC's investigation into the company's compliance with the order had “spiraled out of control and become tainted by bias.”

The dispute between X Corp. and the FTC centers on a May 2022 “consent order” -- meaning an order issued by the FTC that X Corp. agreed to follow. The order resolved allegations by the FTC that Twitter misled users by asking for their phone numbers and email addresses for security purposes, but then drawing on the information for ad targeting. That allegedly deceptive activity violated a 2011 settlement over a security glitch, according to the FTC.



X Corp. alleged in a motion filed in federal court in July that after its acquisition by Elon Musk, the FTC “embarked on a new campaign of unceasing demands, demanding responses to long lists of wide-ranging questions and requiring burdensome document productions.”

The company specifically said that since the acquisition, the FTC issued 16 letters demanding information. By contrast, the agency issued a total of 28 demand letters between 2011 and last year, according to the complaint.

X Corp. also said the FTC was wrongly attempting to depose Musk, who has only a "high-level supervisory role" over the privacy program. 

"A reasonable observer easily can conclude that the FTC has no legitimate basis for deposing Mr. Musk," the company wrote in its petition.

The FTC countered in papers filed in September that it had legitimate reasons to investigate X Corp.'s compliance with the prior order given well-publicized recent changes at the company -- including the departures of key members of the privacy and security team.

Hixson said Thursday that even though the consent order was provided to him in May 2022, it didn't become a “court order,” but was instead an administrative order issued by the FTC.

He wrote that procedural rules allow the court “to modify its own orders, not another tribunal’s orders.”

“There is no modification the court can make ... that will relieve X Corp. of the obligation to comply with the administrative order,” he wrote.

Next story loading loading..