FTC Twitter Investigation Sought Elon Musk’s Internal Communications, Journalist Names
Documents obtained by a House panel shed light on the probe into Twitter’s compliance with settlement By Ryan Tracy March 7, 2023 4:30 pm ET
WASHINGTON—The Federal Trade Commission has demanded Twitter Inc. turn over internal communications related to owner Elon Musk and detailed information about layoffs and other business decisions as part of a wide-ranging investigation into the company, documents viewed by The Wall Street Journal show.
In 12 letters sent to Twitter and its lawyers since Mr. Musk’s Oct. 27 takeover, the FTC also asked the company to “identify all journalists” granted access to company records and to provide information about the launch of the revamped Twitter Blue subscription service, the documents show.
The FTC is also seeking to depose Mr. Musk in connection with the probe. The so-called demand letters were obtained by the Republican-led House Judiciary Committee, which planned to publish excerpts of them Tuesday in a staff report about the FTC’s investigation. The letters indicate Twitter responded to the FTC, but that the agency as of late January felt the company was engaging in a “troubling pattern of ongoing delay” that raises “serious concerns about its compliance.”
The inquiries by the FTC, which is led by Democrat Lina Khan, follow massive layoffs implemented by Mr. Musk that have raised concerns within the agency about the ability of the company to comply with a $150 million settlement related to alleged privacy violations.
In November, the FTC said its order accompanying the 2022 settlement “gives us new tools to ensure compliance, and we are prepared to use them…no CEO or company is above the law.”
The Judiciary panel’s report, the first by a new subcommittee examining what Republicans call “weaponization” of federal agencies, accused the FTC of overstepping its authority at the urging of progressive groups unhappy with Mr. Musk’s acquisition of the company.
“There is no logical reason, for example, why the FTC needs to know the identities of journalists engaging with Twitter,” the report said. “There is no logical reason why the FTC, on the basis of user privacy, needs to analyze all of Twitter’s personnel decisions. And there is no logical reason why the FTC needs every single internal Twitter communication about Elon Musk.”
The FTC, led by Lina Khan, is conducting a wide-ranging investigation of Twitter.Photo: Tom Williams/CQ-Roll Call/Getty Images
Asked in December about the Twitter investigation in an interview with the Journal, Ms. Khan declined to discuss specifics of the case but said the FTC wants “to make sure that we’re fully enforcing the orders that we have on the books.”
She said that the 2022 Twitter order is “much more prescriptive, much more detailed” than a previous FTC settlement with the company from 2011.
Twitter and the FTC didn’t immediately respond to requests for comment.
Mr. Musk told Twitter employees in November the company will do whatever it takes to follow both the letter and the spirit of the FTC order, the Journal reported at the time.
Mr. Musk said in December that the company’s workforce had been reduced to roughly 2,000 from 8,000, triggering debate on whether tech companies generally are overstaffed as well as questions about Twitter’s ability to comply with security practices and perform other functions.
“We are concerned these staff reductions impact Twitter’s ability to protect consumers’ information,” an FTC official wrote to Twitter’s lawyers on Nov. 10 following an initial wave of layoffs, according to a copy of the letter viewed by the Journal.
That letter was followed by 11 others dated through Feb. 1, each demanding more documents and information.
The FTC letters asked Twitter to quantify the number of layoffs and resignations across its departments. The agency sought a detailed accounting of the responsibilities of new executives, including who would be overseeing privacy and security matters.
One letter pressed for an explanation of the departure of Jim Baker, the former Justice Department official who until December was a senior Twitter lawyer with responsibilities for ensuring compliance with the FTC order.
The FTC also asked for all internal Twitter communications “related to Elon Musk,” or sent “at the direction of, or received by” Mr. Musk.
Mr. Musk was scheduled to be deposed by the FTC on Feb. 3 but had a potential conflict related to court testimony in a securities lawsuit, according to a Jan. 24 FTC letter. The deposition hasn’t happened, said a person briefed on the matter.
The Federal Trade Commission is seeking to depose Elon Musk in connection with its probe into Twitter.Photo: Jim Watson/Agence France-Presse/Getty Images
The FTC also pressed Twitter on whether it was conducting in-depth privacy reviews before implementing product changes such as the new version of Twitter Blue, as required under the 2022 order. The agency sought detailed records on how product changes were communicated to Twitter users.
It asked Twitter to explain how it handled a recently reported leak of Twitter user-profile data, to account for changes made to the way users authenticate their accounts, and to describe how it scrubbed sensitive data from sold office equipment.
On Dec. 13, the FTC asked about Twitter’s decision to give journalists access to internal company communications, a project Mr. Musk has dubbed the “Twitter Files” and that he says sheds light on controversial decisions by previous management.
The agency asked Twitter to describe the “nature of access granted each person” and how allowing that access “is consistent with your privacy and information security obligations under the Order.” It asked if Twitter conducted background checks on the journalists, and whether the journalists could access Twitter users’ personal messages.
The House panel’s report reflects the sharp partisan divide over Mr. Musk’s acquisition of Twitter.
Republicans assert that before the acquisition, Twitter censored conservative viewpoints—citing among other things its decision to ban former President Donald Trump from the platform, a decision Mr. Musk reversed. Twitter’s former executives have denied political bias.
Twitter’s new owner, Elon Musk, said in December the San Francisco-based company’s workforce was cut to roughly 2,000 from 8,000.Photo: Shelby Knowles for The Wall Street Journal
The GOP-led judiciary panel’s report says Mr. Musk “has reshaped Twitter to revitalize freedom of speech online.”
Democrats including President Biden have raised concerns about Mr. Musk’s ownership, saying it could potentially compromise the platform’s ability to secure the personal data of its users. Seven Democratic senators on Nov. 17 called the FTC to investigate, among other things, whether Twitter users could have been harmed by scam accounts created after changes to the launch of a new version of Twitter Blue that month.
“We fear that Mr. Musk’s reported changes to internal reviews and data security practices further put consumers at risk and could directly violate the requirements of the consent decree,” Sen. Richard Blumenthal (D., Conn.) and others wrote.
Concerns about potential violations of the FTC order were also raised in August 2022 by a former Twitter security executive-turned-whistleblower. The company at the time said the allegations weren’t accurate.
If the FTC concludes Twitter violated the 2022 order, the agency could seek financial penalties, business restrictions, or sanctions on responsible executives.
Write to Ryan Tracy at Ryan.Tracy@wsj.com