Twitter Executives Could Face Big FTC Fines, Former US Officials Say
Elon Musk’s lawyer late last week sought to assure Twitter employees that they would not be held liable if the company ignores the agency’s mandate to monitor and protect user privacy when introducing new features.
Former FTC officials don’t think it’s so clear.
In a May 2022 agreement with the US regulator, Twitter agreed to improve its privacy practices and place responsibility on people who held certain positions. But compliance has come into question as Musk pursues a rapid rollout of features to steer the debt-ridden, money-losing company into profitability. In addition, several managers in charge of following orders have quit or been fired.
Former officials differed on whether the settlement would put Twitter executives at legal risk if the company failed to honor the agreement or if the agency would have to take additional steps, such as new investigations and settlements, before formally pursuing individuals.
Howard Beales, former director of the FTC’s Bureau of Consumer Protection, said that since the Obama administration, the agency has wanted to hold executives accountable for the decisions they made in their companies.
He said that the FTC has always had the authority to appoint officials who violate the directives and punish them with penalties, but it rarely does so.
David Vladeck, former director of the FTC’s Bureau of Consumer Protection, said there may be another investigation, and possibly another enforcement action before Twitter executives are charged. But he added, “the FTC will move quickly if it thinks consumers’ privacy is at risk.”
Several former FTC officials said the agency’s current chair, Lina Khan, has shown interest in going after the administration if the consent orders are violated.
The FTC on Thursday said it is “following recent developments at Twitter with deep concern. No CEO or company is above the law, and companies must follow our consent laws.”
Twitter did not respond to requests for comment.
Last Thursday, Twitter’s attorney advised employees to seek whistleblower protection “if you feel uncomfortable with anything you’re being asked to do,” after managers responsible for complying with FTC rules resigned, according to a memo posted on an internal Twitter Slack channel and seen. by Reuters.
The attorney warned that due to the speed of software development, the legal team has shifted the responsibility of compliance to developers to “make sure” that the changes comply with the requirements of the FTC. This may put those workers at legal risk, said the lawyer.
“I expect that all of you will be forced by the administration to reject changes that may cause major incidents,” said the paper.
Twitter’s agreement requires a “written plan and any assessment” to be provided by Twitter’s board of directors, which Musk dissolved when he took over the company. In the absence of a board, oversight should be done by a “chief executive officer” at Twitter.
Musk’s attorney, Alex Spiro, wants to minimize the potential risk to individual employees. “I understand that there have been employees at Twitter who are not even working on the FTC issue saying they could go to jail if we don’t comply – that doesn’t work,” Spiro wrote to Twitter employees. Thursday.
“Only one party to this law is Twitter – not the people who work at Twitter. Twitter itself (not individual employees) is a group and therefore only Twitter can be held responsible,” he wrote.
Musk also sought to reassure employees in an email, according to the technology news site, The Verge: “I cannot stress enough that Twitter will do whatever is necessary to comply with the letter and spirit of the FTC’s consent decree,” he wrote. “Anything you read to the contrary is false. It’s the same with other government-controlled issues where Twitter operates.”
Potential debt can add up quickly. Failure to comply with May’s order could leave Twitter vulnerable to civil penalties, which could include: fines are levied at $46,517 (about Rs. 37,74,700) “per violation,” which can be defined as every user and every day. Making false statements to the government on separate compliance reports can open employees up to criminal prosecution.
In 2019, Facebook, the world’s largest social media platform, agreed to pay $5 billion (roughly Rs. 40,560 crore) after violating a 2012 privacy notice.
In the May settlement, Twitter agreed to pay $150 million (roughly Rs. 1,216 crore) and examine potential aspects of privacy and data security issues. It settled allegations that the company misused private information, such as phone numbers, for advertising after telling users the information would be used for security reasons.
© Thomson Reuters 2022