Elon Musk’s X Corp. Loses Battle Against FTC Privacy Protection
X Corp. was unsuccessful in convincing a federal judge to limit the US Federal Trade Commission’s monitoring of the social media platform’s data privacy regulations and prevent the agency from interrogating company CEO Elon Musk.
U.S. Magistrate Judge Thomas Hixson in San Francisco said in a ruling Thursday that he was legally powerless to exempt the company formerly known as Twitter from FTC oversight. X Corp. had complained that after the billionaire bought the platform last year, the agency continued an investigation that “has gotten out of hand and become tainted by bias.”
The judge also rejected X Corp.’s request to spare Musk the government’s legal fees.
X Corp. did not immediately respond to a request for comment.
The world’s richest man, who has previously challenged the authority of government regulators, is also resisting a challenge by the U.S. Securities and Exchange Commission as it investigates his purchase of Twitter stock before the company’s takeover.
The court is fighting X Corp.’s claims that the FTC is “bullying” Musk, stemming from the company’s agreement last year to pay a $150 million fine for allegedly misusing user data and agreeing to agency monitoring to protect its privacy.
Hixson said the federal district court “has no power” to grant X Corp. any relief from its obligations under the FTC’s consent decree because it is an administrative order.
“Nor does the court see how it could order the FTC not to oust Musk,” Hixson wrote in the ruling, which was released shortly after he held a brief hearing Thursday.
A whistleblower complaint filed by Twitter’s former security director in 2022 pointed to serious flaws in the company’s handling of users’ personal data. Musk, who paid $44 billion for the company, hired an outside law firm to conduct an internal investigation into allegations of lax computer security.
The FTC sought to oust Musk on July 25, according to a court filing by X Corp. FTC Chairwoman Lina Khan refused to meet with him in person until his company agreed to requests for information.
Justice Department attorney Zachary Cowan argued at the hearing that Khan’s office should question Musk because he had “first-hand knowledge” of the company’s data practices and compliance efforts relevant to the FTC’s investigation.
The agency’s actions during the investigation are “so insidious” and Musk was targeted because he has been a “vocal critic” of the Biden administration, Daniel Koffmann, an attorney for X Corp., told the judge.
Separately, Bloomberg reported in October that the SEC was investigating how Twitter managed a 2018 security breach that exposed personal user data.
The case is US v. Twitter Inc., 3:22-cv-03070, US District Court. Northern District of California (San Francisco).
