Judge rejects X's attempt nullify its FTC privacy settlement

Elon Musk can't avoid a deposition that's part of an FTC investigation, either.


In May 2022, just months before Elon Musk acquired Twitter (now X), the Federal Trade Commission (FTC) hit the platform with a $150 million fine and consent decree that imposed stipulations for safeguarding users' personal data. The ruling was imposed after the FTC found that Twitter had violated a previous consent decree by inappropriately sharing user phone numbers and email addresses with advertisers.

After acquiring Twitter, Elon Musk went to court in an attempt to overturn that consent decree, arguing that the FTC had increased scrutiny on X and pressured a third-party assessor to find fault with its security practices. In a post on X at the time, Musk called the FTC's actions "a shameful case of weaponization of a government agency for political purposes and suppression of the truth."

However, a federal judge just rejected that motion, ruling that his court lacked the authority to block the FTC's court order, while also blocking Musk's request to avoid a deposition that's part of a separate investigation, The Washington Post reported. In other words, X must still adhere to the strict privacy reporting standards imposed by the FTC last year.

The judge listed other issues with X's argument, noting that the FTC had good reason to increase scrutiny on X after Musk took over. "The government says this increase in investigative activity should not be surprising because Musk directed at least five rounds of terminations, layoffs or other reductions in X Corp.’s workforce, which affected the security, governance, risk and compliance team," he wrote in the ruling.

He added that the third-party assessor said he faced steady delays due to executive turnover at X. Finally, the judge ruled that Musk can't avoid being deposed by the FTC, as "the government argues that the major changes to the company appear to have been initiated by Musk himself."

Musk's FTC problems started shortly after his acquisition of X, when key executives on Twitter's privacy and security teams departed. Still, Musk seemed willing to comply with the rules, telling employees at the time that "Twitter will do whatever it takes to adhere to both the letter and spirit of the FTC consent decree."

Back in March, though, the FTC stepped up its probe into Musk's actions in an effort to get more information about the company’s handling of layoffs, X Premium subscriptions, the "Twitter Files" and other issues.

Meanwhile, the platform can't seem to stay out of the news, as IBM recently said it would pull advertising on X after discovering its ads were being placed next to pro-Nazi content. Musk himself faced criticism after he appeared to endorse an antisemitic post on the platform.