Musk should be questioned as he had "unique, first-hand knowledge about the current state and direction of the company’s data practices and efforts to comply” with the FTC order, the Justice Department said. — Photo by Alain JOCARD/AFP
Elon Musk’s X Corp. said it’s been "vindicated” by an independent consulting firm’s findings that it addressed privacy concerns raised by the Federal Trade Commission, the latest volley in a court fight over the company’s claims that the agency is "harassing” its billionaire owner.
X, formerly Twitter, disclosed a report by FTI Consulting Inc. which the company says shows it appropriately fulfilled requirements in a standing order for the FTC to supervise its privacy practices. X says the report bolsters its July request that a federal judge pare back or terminate the FTC’s oversight and shield Musk from being questioned by agency lawyers.
The consent order stems from the social media platform’s agreement last year to pay a US$150mil (RM708mil) fine over alleged misuse of user data. But X contends the agency has engaged in a biased and overzealous investigation, saying in a filing Wednesday that a flurry of FTC demands for information "have focused almost entirely on what happened after Mr. Musk acquired the company” last year.
The showdown between the world’s richest person and the FTC isn’t the only instance in which one of his companies has pushed back against the US government. Musk, who is known for snubbing corporate norms, unsuccessfully challenged his 2018 agreement with the Securities and Exchange Commission that requires him to have his Twitter posts about Tesla Inc. screened.
In its latest court filings, X reiterated its claim from July that a senior partner at Ernst & Young LLP, the consulting firm that it first hired to examine its compliance with the FTC order, admitted that the agency had been "pressuring” the firm to reach a specific outcome.
The Justice Department last month opposed X’s request to end the FTC order, arguing that the company "cherry-picked excerpts” from the EY partner’s deposition. The agency also said that EY, which never produced a report on the platform’s compliance, had terminated its engagement due to employee departures and lack of support from the company.
Musk should be questioned as he had "unique, first-hand knowledge about the current state and direction of the company’s data practices and efforts to comply” with the FTC order, the Justice Department said.
The FTI report, which was heavily redacted in a court filing, said that Twitter "identified the relevant control frameworks to be leveraged in protecting the privacy, security, confidentiality, and integrity” of information covered by the FTC consent order.
The report also pointed "a number of exceptions and areas where” Twitter can improve and to "gaps” in certain operations, including in user data retention and deletion and employee training, which it partly attributed to "sudden” organisational changes after Musk took over the company and a mass exodus of staff.
Twitter executives, including Linda Yaccarino, who took over as chief executive officer in June, were interviewed as part of the assessment, according to the report.
A hearing on X’s request for an order to end the FTC order and block a deposition of Musk is set for Nov 16.
The case is US v. Twitter Inc., 3:22-cv-03070, US District Court. Northern District of California (San Francisco). – Bloomberg
