• by Wendy Davis , 6 hours ago

A trio of Senate Democrats is urging the Federal Trade Commission to reject Elon Musk's bid to vacate a 2022 consent decree resolving allegations that X -- formerly Twitter -- misled users by asking for their phone numbers and email addresses for security purposes, but then drawing on the information for ad targeting.

"X has not shown, or even come close to showing, that the order is obsolete, unfair, or contrary to the public interest," Senators Ed Markey (Massachusetts), Richard Blumenthal (Connecticut) and Ron Wyden (Oregon) say in a letter sent Wednesday to FTC Chairman Andrew Ferguson.

Their letter comes in response to a petition filed by X in May, arguing that the settlement should be set aside for several reasons -- including that the company, acquired by Musk in 2022, had significantly changed in the last four years.

The settlement, which the FTC unanimously agreed to, required X to pay $150 million and follow a number of conditions.

Among others, the company promised to create a privacy and security program, obtain biennial evaluations of that program by an independent assessor, conduct risk assessments before implementing or modifying new products, and respond to the FTC's requests for information.

X argued in its May petition that those terms were "imposed on a company that no longer exists," and that the people responsible for what it called the "underlying failures" are no longer employed at the company.

"There is no consumer-protection rationale to maintain a twenty-year regulatory regime over an entity that did not commit the underlying violations, and has never violated the order," X wrote in the petition.

X also claimed that complying with the settlement cost the company "close to $17 million" in paperwork, and diverted resources from developing artificial intelligence (AI) technology.

In addition, X argued that the order gave the government "a vehicle" to suppress free speech.

"Maintaining a sweeping consent decree with standing subpoena-like powers over such a platform creates precisely the kind of ongoing coercive pressure that risks chilling the marketplace of ideas," the company wrote.

The lawmakers criticize those arguments, writing that they "amount to a request that the Commission disregard X’s history of misconduct and replace independent accountability with self-regulation."

"The company makes the extraordinary claim that rebranding Twitter as X somehow frees the company from the privacy obligations it inherited, an argument that would enable any bad actor to evade FTC oversight by changing its name," Markey and the others write.

"X's other arguments -- about free speech, routine compliance costs, (artificial intelligence) development, and internal privacy programs -- are similarly frivolous," they add.

The senators elaborate that the FTC and Twitter agreed to the settlement in May 2022 -- five months before Musk purchased the company.

Musk "knew what he was buying: a company with a history of violating its users’ privacy and subject to bipartisan consent decrees intended to avoid future misconduct," the lawmakers write.

They add that the order addresses privacy issues, and doesn't regulate speech on the platform.

"X’s attempt to recast privacy oversight as censorship does not change the conduct that made the order necessary," the letter says.

The lawmakers also urge the FTC to reject the claim that compliance costs of around $4.25 million a year are too high.

Musk "is the richest person in the world, with sufficient personal wealth to support the company," they write.

"More importantly, independent privacy and security oversight is not an optional expense to be cut when it becomes inconvenient."

Earlier this year, the FTC sought comments from the public on Musk's request.

Fifteen advocacy groups -- including the Electronic Privacy Information Center, Consumer Federation of America, Electronic Frontier Foundation and Public Citizen -- urged the FTC to "unequivocally reject" the petition.

The organizations argued the company still poses a threat to privacy, citing a Forbes report that 2.8 billion records were leaked by X last year.

Others, including a 13-state coalition led by Iowa, said the consent decree should be terminated.

Among other arguments, those states contend the Biden-era FTC "weaponized" the consent order "to interrogate core First Amendment activities."

They support that claim by referencing a December 2022 letter from the FTC to Twitter in which the agency sought information regarding material shared with journalists who reported on the so-called “Twitter Files” -- which involved the company's prior editorial decisions -- including the brief suppression of a New York Post story about Hunter Biden's laptop.

Former FTC Chair Lina Khan later told lawmakers the agency was specifically investigating a privacy issue -- whether Twitter disclosed users' private communications to the journalists -- in violation of the earlier consent decree.

She added that the FTC's probe revealed that Musk told employees to take action that would have violated the consent decree, but “longtime information security employees” at the company intervened and instituted privacy safeguards.

The underlying consent decree stemmed from the tech platform's 2019 disclosure that it inadvertently allowed marketers to target users based on phone numbers and emails collected for security purposes.

The company said at the time that the emails and phone numbers were mistakenly incorporated into an ad platform that allows companies to use their own marketing lists -- which include customers' email addresses and phone numbers -- to target ads.

When X settled the matter, it did not admit or deny the FTC's allegations.