Musk is waving the threat of Twitter bankruptcy. Even without verification seals, fake accounts have been ordered by a Portuguese court in the past

There was no talk of a blue verification seal and Elon Musk was still better known for driving Tesla and SpaceX, when the Lisbon Intellectual Property Court decided to notify Twitter. In this action, the Portuguese court ordered the social network to block an account managed by unknown persons, who used the name and brand image of the Institute for Educational Evaluation (IAVE), responsible for preparing school exams. The case dates back to 2017 and the verdict was implemented. But only now, with the purchase of the most famous “bird” on the Internet by the richest businessman in the world, the wholesale scale takes on a new meaning.

“This case confirms that Twitter is not exempt from complying with the rules, even where there is no seal to verify account holders,” explains Manuel Lopez Rocha, a specialist in intellectual property and technologies at law firm RBMS.

Being an avowed supporter of freedom, López Rocha does not hide the reticence resulting from the emergence of a new authorship and identity verification system, which was launched on Twitter after Elon Musk paid 44 billion euros (€ 42.49 billion) to buy the company. . But this is not the only legal “loophole” in the social network’s new business model.

Yoel Roth, who is in charge of the Security and Integrity District, took on the task of reassuring sponsors and advertisers about the Twitter operation at Musk’s newly opened consulate — but ended up leaving shortly after trying to carry out the task. Even worse: Leah Kessner, director of information security, Damien Kieran, director of privacy, and Marian Fogarty, director of regulatory compliance (“Compliance”), also knocked on the door, according to North American media.

The departures took the company’s crisis to a new level: The Federal Trade Commission (FTC) quickly tried to warn the company to comply with the still-secret agreement, which was concluded after a lawsuit led to the social network paying a $150 million fine for using the personal contacts of various account holders. Commercial Purposes – When informed that he wants this data for security purposes only.

The penalty was applied to the abusive commercial use of 140 million user accounts between 2014 and 2019 — but the case is still fresh in memory, as a court agreement between Twitter and the FTC dates back to May 2022. And it has important legal implications: Musk wants to transform the network’s business model Social from the top down, but since it is determined to be under the jurisdiction of the US courts, it has to perform pre-impact analyzes in terms of privacy, before proceeding with any changes in the business model.

The departure of four professionals with critical jobs to a company with a prime mover in personal data management may indicate that almost no one thinks the South African businessman is prepared to comply with the agreement – or even with the laws. Added to this is another note: Contrary to what Musk initially expected, changes in Twitter’s business model will always be subject to legal restrictions that may even have international dimensions, as the Federal Trade Commission indicated in a statement pointing an accusing finger at social media. Network to deceive Internet users by making sure they comply with the procedures of the Privacy Shield agreement, which allowed the rapid flow of data between the European Union and the United States.

The Privacy Shield is currently invalidated by a ruling by the Court of Justice of the European Union (CJEU), and Washington and Brussels have begun new rounds of negotiations for an Atlantic consensus based on the development of the digital economy. Tiago Félix da Costa, who works in the privacy area of ​​Sociedade de Advogados Morais Leitão, recalls that in October, the Joe Biden administration launched an executive order with the aim of implementing measures that help comply with European requirements in terms of terms when it comes to data protection. The result: A change to Twitter’s rules could also have a knock-on effect in negotiations that are increasingly important on both sides of the Atlantic.

“Concerns that have been raised recently relate to the departures of people who have worked in the field of privacy and ‘compliance’ (compliance with regulations and laws), but we must not forget that there has been tension between the US and the EU over personal data flows,” says the lawyer.

According to various media outlets, the South African millionaire has already shown signs that he is ready to take on the FTC – if only because there is an idea that he managed to break borders the same way he crossed skies by sending missiles from the United States. SpaceX in space missions, and restored the ability for the United States to launch space missions, during a period when it was partly dependent on Russian missiles.

It remains to be seen whether the audacity works as an element of pressure on the authorities, or whether it will return as a rebound force capable of bringing down Twitter. Elon Musk may be a superstar, but he’s just entered the market [das redes sociais] which it does not control has come under intense scrutiny in recent times, as we have seen with the investigations launched against Facebook. Musk doesn’t fully understand what kind of world this is, and instead of a slow and gradual transition, he’s making a business transformation from the root,” says David Quinta, Digital Area Manager at BBDO Portugal Marketing Agency.

Fee or bankruptcy?

What’s wrong could get worse — and Elon Musk, the world’s unpredictable richest human being who is also the account with the most followers on Twitter, has been quick to show signs that he is not immune from suspicion or fear.

“Without significant revenue from subscriptions, there is a high probability that Twitter will not survive the next economic recession,” the entrepreneur warned in an email to professionals who remained with the company after layoffs that could affect half of the workforce. allocated. At the same time, he added, “we need to ensure that about half of our revenue comes from subscriptions.”

It remains to be seen whether the phrase was intended to intimidate the team that stayed on Twitter or if it resulted from the desperation of those who invested $44 billion after securing $13 billion in loans from banks and persuading entrepreneurs like Larry Ellison, the founder of Oracle, to invest two billion euros in half a dozen. From messages from electronic platforms or even SMS. In any case, it is important not to forget that Elon Musk will not cease to exist … Elon Musk.

“For people, it may seem that the end of the world is coming on social networks, but it’s just a normal day in the life of Elon Musk,” says Roberto Gomez, director of digital marketing platform Brenfer.

And due to more “ordinary days” in Musk’s life, a question is beginning to take shape: Is Twitter still the same social network that played a decisive role in the Arab Spring that led to revolutions and regime change in Egypt, in Tunisia, Syria or Libya?

Twitter has always been guided by a strong advocacy of democratic values, but now it gives an image of fragility or a platform without a king or a rock. This ends up affecting business confidence, David Quinta explains.

Pfizer, United Airlines, General Mills, Audi, Ford, Volkswagen and General Motors are among the first wave of companies to decide to suspend advertising investments on Twitter, without an announced deadline, perhaps after echoes of specialists and marketing agencies that have reportedly already begun advising on a wait-and-see attitude. on the social network.

“The news leads to the belief that the field of privacy and compliance is weakening, and these days no company can risk doing that (because the authorities and the market react instantly),” asserts Félix da Costa.

blue storm

Even within the plan designed by Musk, there are no shortage of setbacks: Once it began being made available, the blue verification seal was activated by several people, apparently without significant delays or verification procedures, which went beyond paying the fee of $7.99.

According to Reuters, the blue verification seal was used to launch fake accounts for Tesla and SpaceX, which Musk runs, as well as for Nestlé and Lockheed Martin. Eli Lilly, a pharmaceutical company that was also the target of a similar Twitter stunt, has come forward to apologize to consumers who believed tweets from a fake congener account that announced insulin would be free.

“It is somewhat unexpected that the first form of monetization on Twitter would be through account verification fees. It might make sense to charge for features that block ads or allow post-post editing of texts, but account verification is an initial tool.” To ensure the authenticity of the contents. It is very important to be part of a business model, ”adds Roberto Gomez.

On Wednesday, as the chaos unfolded, Musk announced that he had ended the blue seal check that was still beginning the first hours of life. On Friday, a new embarrassment follows: To avoid further confusion for the public, Twitter is restoring the old verification seals and applying them to the official accounts of previously recognized personalities, brands, and public entities on the social network.

Apparently, blue seal grants are now suspended, Musk warned two days ago. Fake accounts that don’t tell the public immediately after they are discovered have been banned, though the businessman bought Twitter, purporting to restore “absolute freedom”.

WeChat’s business model, which has added communication, social networking and payment features in China, risks turning into a mirage if Twitter develops at the pace of progress and setbacks due to legal or technical problems. Roberto Gomez admits that all these mishaps may be the result of Musk’s provocative style, which has not benefited the credibility of the messages he is conveying to the public. But he also remembers that it is too early to dictate the end of this story.

“Unless people leave on a large scale, I don’t expect companies to flee. The money goes wherever there is an audience,” says the Brenfer person in charge. “There’s no guarantee what Musk is doing on Twitter will go well, but we’re still a long way from knowing if it’s really going to go wrong,” he adds.

Elon Musk’s tweets will try to reveal the next chapters.