Twitter's pre-Musk data mismanagement could inhibit company profitability for decades
FTC fined social media giant Twitter $150M, established audit requirement in May
Pantheon co-founder and CEO Zack Rosen discusses whether Elon Musk can turn around advertising on Twitter and whether he can solve the 'massive' bot problem, on 'The Claman Countdown.'
Twitter's executive mismanagement before Elon Musk's takeover could make profitability an uphill battle for the tech mogul.
Twitter is currently operating under intense scrutiny and regular auditing from the Federal Trade Commission due to a controversy that arose under the previous leadership.
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BERLIN, GERMANY - MARCH 10: The logo of Twitter as seen on a smartphone on March 10, 2022, in Berlin, Germany. (Photo Illustration by Thomas Trutschel/Photothek via Getty Images) (Thomas Trutschel/Photothek via Getty Images) / Getty Images)
The FTC slapped Twitter with a hefty fine for illicit data collection in May — before Musk took over the company. With that fine came mandatory audits of Twitter and probes into how the social media titan earns revenue.
"Under the terms of the settlement, Twitter will be barred for 20 years from misleading consumers about the extent to which it protects the security, privacy, and confidentiality of nonpublic consumer information, including the measures it takes to prevent unauthorized access to nonpublic information and honor the privacy choices made by consumers," the FTC wrote of the settlement.
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FILE PHOTO: The U.S. Federal Trade Commission seal. (REUTERS/Yuri Gripas/File Photo / Reuters Photos)
The FTC added, "The company also must establish and maintain a comprehensive information security program, which will be assessed by an independent auditor every other year for 10 years."
Twitter was accused by the FTC of disingenuously profiting off of user data such as phone numbers and email addresses. Twitter presented the request for user data as necessary for account security before turning around and selling the information to third-party marketers. The issue was settled, with Twitter paying a $150 million fine.
Despite his lack of involvement in the May scandal, Musk will be forced to continue working with the FTC, and auditors are set to investigate internal Twitter affairs for the next two decades.
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A class-action lawsuit was reportedly filed against Twitter on Thursday on behalf of workers claiming that the company’s intended layoffs violate a federal law requiring 60 days' notice for employees.
Several top executives have already left the company amid the impending layoffs, including former CEO Parag Agrawal, Chief Financial Officer Ned Segal, and policy chief Vijaya Gadde.
Tesla CEO Elon Musk smiles as he addresses guests at the Offshore Northern Seas 2022 meeting in Stavanger, Norway, on Aug. 29, 2022. (Carina Johansen / NTB / AFP/ Getty Images / Getty Images)
According to Twitter's agreement with Musk, laid-off employees must receive severance and benefits on par with what they would have received before his takeover, the Los Angeles Times reported.
Fox News' Brie Stimson contributed to this report.