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Below: An appeals court is set to hear arguments in an Apple antitrust case, and an impostor’s tweet about insulin may have cost Twitter millions of dollars. First:
Musk brushes off early Twitter scrutiny from Congress
Elon Musk has owned Twitter for less than three weeks, but his controversial and chaotic takeover of the social media company is already drawing congressional scrutiny.
Yet it’s unclear whether the pressure will have any impact on Musk, who brushed aside one top lawmaker’s concerns Sunday and has shrugged off federal oversight in the past.
Here are the early friction points between Congress and Musk’s Twitter — and why lawmaker pressure may yield limited returns:
Misinformation and impostor accounts
Twitter has long faced criticism from Democratic lawmakers that it has done too little to curb misinformation. But those concerns appear to have increased since Musk took the reins of the platform, which has been inundated with “verified” accounts impersonating prominent users and brands in recent weeks.
Rep. Raja Krishnamoorthi (D-Ill.):
On Thursday, my colleague Geoffrey A. Fowler created an account impersonating Sen. Edward J. Markey (D-Mass.) — with Markey’s blessing — and received a “verified” status on Twitter.
Markey bashed Musk in a letter Friday, writing that his “rapid and haphazard imposition of platform changes, removal of safeguards against disinformation, and firing of large numbers of Twitter employees have accelerated Twitter’s descent into the Wild West of social media.”
He responded to Markey’s letter in a tweet by dismissing the senator’s concerns around faker accounts and mocking the senator for wearing a mask in his Twitter profile picture, as my colleague Steven Zeitchik reported.
Markey shot back that if Musk didn’t “fix” his companies, “Congress will.” But the threat belies the fact that lawmakers have failed for years to deliver on pledges to rein in the alleged misconduct of major tech companies like Twitter.
A slew of rapid-fire product changes and departures by high-ranking executives since Musk’s takeover have stoked fears that Twitter may be putting users’ privacy at risk.
The Federal Trade Commission, which placed privacy restrictions on the company as part of prior settlements, issued a rare warning in response, as my colleagues reported Friday.
Lawmakers on Capitol Hill are also demanding answers from the company regarding what steps it’s taking to protect users as its platform and company structure undergo major changes.
Rep. Jan Schakowsky (D-Ill.), who chairs a key House panel with purview over online privacy, said in an emailed statement that Musk’s purchase of Twitter “has made matters even worse” for consumers and that under him the company had violated its privacy pact with the FTC.
Democratic lawmakers have voiced concern about Musk’s business dealings with foreign investors in Saudi Arabia and China, including part of his bid to buy Twitter.
In a letter last month, Sen. Chris Murphy (D-Conn.) called on the federal government to probe the “potential national security concerns arising from the recently completed takeover of Twitter,” including financing received by “members of the Saudi Arabian royal family.” President Biden echoed those concerns Wednesday, saying the ties are “worthy of being looked at.”
Sen. Mark R. Warner (D-Va.), the chair of the Senate Intelligence Committee, has also sounded the alarm about Musk’s reliance on China. “I don’t think there is another American more dependent upon the largesse of the Communist Party than Elon Musk,” he said.
But Republicans pushed back on the criticisms and defended Musk, offering a potential preview of how they might approach oversight of Twitter under Musk.
Sen. John Cornyn (R-Tex.) and Rep. Marjorie Taylor Greene (R-Ga.):
Lawmakers are expressing alarm over Musk’s abrupt firing of roughly half of Twitter’s workforce, including whether the mass layoffs are in violation of federal and state notification laws.
A group of former Twitter employees filed a class-action lawsuit against the company alleging it failed to give proper advance notice in violation of labor laws before laying off scores of workers.
Rep. Mark DeSaulnier (D-Calif.):
Twitter did not respond to a request for comment.
Appeals court set to hear arguments in antitrust battle between Apple and Epic Games
Lawyers for Apple, Epic Games, the Justice Department and the office of California’s attorney general will make their arguments today about whether the tech giant’s app store runs afoul of antitrust law before a three-judge panel of the U.S. Court of Appeals for the 9th Circuit, the Associated Press’s Michael Liedtke reports. The judges are expected to rule in the next six months or a year. However, the appellate ruling probably won’t be the last salvo in the case, because the losing company will probably appeal to the Supreme Court.
The arguments come more than a year after U.S. District Judge Yvonne Gonzalez Rogers ruled that Apple has to “steer” developers to alternatives to its payment processing service, which gets a 30 percent cut on most transactions. Gonzalez Rogers also ruled that Apple violated California competition laws by forcing developers into using its payment service without letting them tell customers that there are alternatives.
“A lawyer for the Justice Department will also get a chance to explain why the agency believes Gonzalez Rogers interpreted the federal antitrust law too narrowly, jeopardizing future enforcement actions against potentially anti-competitive behavior in the technology industry,” Liedtke writes.
An Eli Lilly impostor’s fake tweet may have cost Twitter millions of dollars
The nine-word tweet, which falsely announced that Eli Lilly was making insulin free, set off a panic at the pharmaceutical giant, but Twitter for hours didn’t react to the company’s demands that the viral spoof be taken down, Drew Harwell reports. Advertising giant Omnicom recommended that its clients pause their activity on Twitter because of the brand safety risks, the Verge first reported.
The episode came soon after Twitter rolled out a new component of its Twitter Blue subscription service that allowed users to get blue check marks, which were previously used to signal accounts’ authenticity. Twitter isn’t checking the identities of Twitter Blue users, and Musk has argued that impersonators would be dissuaded by the $8 fee and the suspension of their accounts. But Twitter paused the subscription service by Friday because of “impersonation issues” and began putting “official” labels on advertisers’ accounts. Musk didn’t respond to a request for comment.
“By Friday morning, Eli Lilly executives had ordered a halt to all Twitter ad campaigns — a potentially serious blow, given that the $330 billion company controls the kind of massive advertising budget that Musk says the company needs to avoid bankruptcy,” Drew writes. “They also paused their Twitter publishing plan for all corporate accounts around the world.” Eli Lilly, which has a robust presence on Twitter, declined to comment on the episode or its spending on Twitter ads.
Sam Bankman-Fried’s crypto empire imploded after a Washington charm offensive
Bankman-Fried, 30, is facing questions about his role in the cryptocurrency industry’s most catastrophic collapse yet, Tory Newmyer reports. He had been trying to sell Washington on a new regulatory regime and was the second-biggest donor to Democratic candidates in the midterm elections before his crypto exchange, FTX, collapsed.
“The bill Bankman-Fried was pitching — the Digital Commodities Consumer Protection Act, sponsored by Sens. Debbie Stabenow (D-Mich.) and John Boozman (R-Ark.) — has drawn criticism both from advocates of stricter financial regulation for not going far enough and from some crypto operators who say it is too draconian,” Tory writes. “Yet those close to the process say Bankman-Fried’s advocacy pushed the measure into potential consideration for year-end action by a Congress that remains, for now, under Democratic control.”
Critics are now calling for a pause in Washington in the wake of FTX’s collapse. “We don’t need more legislation. We need more money and support for regulators to go after what is fundamentally a lawless industry,” said Dennis Kelleher, the president of Better Markets, which advocates for tougher financial regulation. “We need elected officials to prioritize the public interest rather than campaign contributors and lobbyists.”
Twitter users aren’t confident that the latest batch of layoffs ― this time, affecting the company’s contractors ― won’t affect the site. Writer and editor Mike Masnick:
- FCC Commissioner Brendan Carr speaks at an R Street Institute event on spectrum allocation and auctions today at 1 p.m.
- Adrienne A. Harris and Pete Marton, the superintendent and virtual currency chief at New York state’s Department of Financial Services, speak at a Brookings Institution event on Tuesday at 2 p.m.