The EU fires a warning shot at Musk over Twitter content moderation

Under Elon Musk, Twitter must abide by Europe’s heightened new standards for content moderation or else risk fines or even a possible ban, according to a top European Union official. 

Thierry Breton, an EU commissioner and a leading digital regulator, tweeted Tuesday that all companies operating in the EU have to play by the bloc’s rules. That includes the Digital Services Act, a forthcoming law Breton and other policymakers announced last week governing social media and other tech platforms. 

“Mr. Musk knows this well,” Breton tweeted. “He is familiar with European rules on automotive, and will quickly adapt to the Digital Services Act.”

While the DSA has not yet taken effect, the legislation has been agreed to by the European Commission, the European Parliament and EU member states, paving the way for it to become law in the coming months. One of the first laws of its kind, the DSA sets out new requirements for social media platforms’ handling of illegal content, as well as speech that may be legal but threatens universal priorities such as public health. The largest tech platforms will be required to undergo independent content moderation risk assessments and audits, and to develop systems to act on those risks. The sweeping legislation also restricts some forms of targeted advertising and altogether bans ads targeted to minors. 

The coming rules could frustrate Musk as he seeks to pivot to a more laissez-faire Twitter, where content is moderated less, not more. While Musk has recently said Twitter is “obviously … bound by the laws of the country it operates in,” he has also argued for a more permissive approach to content where “we want to be very reluctant to delete things.”

Still, some provisions of the DSA may align more closely with Musk’s vision of greater transparency for Twitter, including having to provide company data to researchers so that they can better understand how the platform’s algorithms work, and giving users explanations for content removals and ways to appeal content decisions.

Companies that violate the DSA face fines of up to 6% of their annual revenue. In an interview with the Financial Times, Breton said Twitter will be no exception to that rule.

“The board [of Twitter] will have to make sure that if it operates in Europe it will have to fulfil the obligations, including moderation, open algorithms, freedom of speech, transparency in rules, obligations to comply with our own rules for hate speech, revenge porn [and] harassment,” Breton told the FT. “If [Twitter] does not comply with our law, there are sanctions — 6 per cent of the revenue and, if they continue, banned from operating in Europe.”

Twitter’s board convened on Sunday and met with Elon Musk to discuss his bid for Twitter. The board’s discussions had turned more serious after Musk last week revealed how he planned to finance the deal.

On Sunday, Musk sent a letter to Twitter Board Chairman Bret Taylor reiterating that his offer to buy the company for $54.20 per share was his “best and final,” according to a new SEC filing on Tuesday. Read the full letter here:

Bret Taylor

Chairman of the Board, 

Thank you for the conversation yesterday.

We remain committed to our transaction with Twitter at $54.20 and appreciate your contact on the matter. As we discussed, $54.20 has been and will remain my best and final offer, period. This is binary – my offer will either be accepted or I will exit my position.  At the time my $54.20 offer was made, it represented a 54% premium to Twitter’s share price prior to the day before my investment in Twitter began, and a 38% premium to the day before my investment in Twitter was announced. Since that time, the attractiveness of my proposal has only increased given the market’s continued correction. Had your stock traded inline with comparable social media companies, my offer would represent approximately 90% and 70% premiums to those times.

While I strongly believe that you should recommend my offer to shareholders based upon its superior value to the value of Twitter without my offer and my equity position, I recognize that you may elect not to do so. As such, I have attached a merger agreement that is “seller friendly” and that does not require you to recommend in favor of my offer. This will provide all shareholders a voice, and allow for a democratic decision consistent with Twitter’s ethos. With your cooperation, we can negotiate changes that you require to be able to announce a transaction before the market opens tomorrow that the shareholders can then vote on. I would respect the outcome of that vote if the shareholders prefer the management plan to my $54.20, and exit my position entirely if that is the outcome of the vote. 

In order to provide further value and choice to shareholders (within the legal boundaries of a private, unlisted company), we are willing to explore options that allow existing shareholders (including convertible securities and other related instruments) to invest all or a portion of their proceeds into the proposed transaction. Any such rollover transaction would be structured as a separate negotiated transaction consistent with laws and regulations and not be a public offer, and would not affect the proposed $54.20 cash offer transaction.

My strong preference continues to be a negotiated transaction with you at $54.20 per share. 

I look forward to the board’s response to my proposal.

 /s/ Elon Musk

Twitter cofounder and former CEO Jack Dorsey responded to Elon Musk’s acquisition of the platform in a somewhat cryptic tweet thread Monday night, which kicked off with a link to the Radiohead song “Everything In Its Right Place.”

Dorsey also noted that Twitter has been “my sole issue and my biggest regret,” saying, “It has been owned by Wall Street and the ad model. Taking it back from Wall Street is the correct first step.”

In recent weeks, Dorsey has criticized Twitter’s board and suggested he takes issue with its stance as a public company.

In his Monday thread, Dorsey said he doesn’t believe “in principle … anyone should own or run Twitter.”

“It wants to be a public good at a protocol level, not a company,” he said. “Solving for the problem of it being a company however, Elon is the singular solution I trust.”

Dorsey and Musk have also developed something of a billionaire bromance over the years. When then-Twitter CEO Dorsey was under fire from activist investors, Musk tweeted, “Just want [to] say that I support @Jack as Twitter CEO. He has a good ❤️.” More recently, Musk complimented Dorsey’s new “Block Head” title at his financial services firm, Block.

Elon Musk’s fellow tech billionaire and sometimes rival Jeff Bezos took an apparent swipe at Musk and the Twitter deal on Monday evening. Bezos questioned on Twitter — where else — whether Tesla’s financial ties to China could give the Chinese government new “leverage over” the social media platform.

The Amazon founder retweeted commentary from a reporter pointing out that Tesla’s second-biggest market in 2021 was China, and that the Chinese Communist Party government has had no leverage over Twitter after banning it in the country in 2009. The reporter suggested that this could soon change as Musk takes the helm at Twitter.

“Interesting question. Did the Chinese government just gain a bit of leverage over the town square?” Bezos said in a tweet. 

“My own answer to this question is probably not. The more likely outcome in this regard is complexity in China for Tesla, rather than censorship at Twitter,” he added in a follow-up post. “But we’ll see. Musk is extremely good at navigating this kind of complexity.”

Four years ago, Twitter cofounder and then-CEO Jack Dorsey laid out four key focus areas that would propel the company’s growth. Among them: promoting “healthy conversation” on the platform.

After years of criticism for Twitter’s apparent failures to prevent its platform from turning toxic, Dorsey acknowledged the scourge of “abuse, harassment, troll armies,” as well as bots, misinformation campaigns and “increasingly divisive echo chambers” on the social network, and he called on researchers to help improve the situation.

“We think it is a growth vector over the long term,” Dorsey said.

In the years since, Twitter (TWTR) has made significant progress toward that goal, including banning many accounts promoting abuse and spam, adding labels for false or misleading information, banning the misgendering of transgender people and launching a team dedicated to studying and increasing transparency around the technology that determines what content is promoted on the site. Just last week, Twitter said it would embrace third-party tools for users to help prevent harassment.

But some who’ve been following the work Twitter has done in recent years worry it could be unraveled now that billionaire Elon Musk has succeeded in his bid to acquire Twitter in a deal worth about $44 billion.

“I would be worried as to how this would change Twitter’s values,” said Kirsten Martin, professor of technology ethics at Notre Dame’s Mendoza College of Business.

Read the full story here.

Some billionaires buy newspapers, magazines and sports teams. Elon Musk is buying a social network that he himself admits might cause much of the world to hate him.

Sounds promising. So why exactly does the world’s richest man — who is already running multiple companies with ambitious goals like taking humans to Mars — want to buy Twitter, a social media platform which, for all its benefits, is facing scrutiny for content issues like hate speech and misinformation, and also fighting to reignite user growth?

Musk has repeatedly stressed in recent days that his goal is to bolster free speech on the platform and work to “unlock” Twitter’s “extraordinary potential.” Others have suggested that Musk — who has 83 million followers on Twitter and has long used it to bolster his personal brand — may be more interested in boosting attention for himself.

To hear Musk tell it, the goal of his Twitter offer is nothing less than protecting civilization as we know it. “My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” Musk said at the TED conference.

Among Musk’s plans for the platform are making its algorithm open source and making it more transparent to users when, for example, a tweet has been emphasized or demoted in their feed. He also said he would want to have more lenient content moderation policies. “I think we want to be very reluctant to delete things and just be very cautious with permanent bans; timeouts are better,” Musk said.

However, it’s not clear that his plans are all that much different from Twitter’s existing strategy. Although Twitter’s algorithm is not currently open source — a term that describes code that is publicly available for anyone to see — leaders at Twitter have expressed support for moving in that direction, and the company often makes clear when it is demoting certain tweets or types of content. Twitter has also erred on the side of labeling, rather than outright removing, much of the content often considered problematic, including some types of misinformation. And it offers several short suspensions to users who violate its rules before removing them.

Read the full story here.

Twitter has agreed to sell itself to Elon Musk in a deal valued at around $44 billion, the company said Monday.

The deal caps off a whirlwind news cycle in which the Tesla and SpaceX CEO became one of Twitter’s largest shareholders, was offered and turned down a seat on its board and offered to buy the company — all in less than a month.

The deal comes after Musk revealed last week he had lined up $46.5 billion in financing to acquire the company. Twitter’s board met Sunday to evaluate Musk’s offer.

The deal would put the world’s richest man in charge of one of the world’s most influential social media platforms. Musk has repeatedly stressed in recent days that his goal is to bolster free speech on the platform and work to “unlock” Twitter’s “extraordinary potential.”

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk said his offer letter to Twitter. “However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”

In the days following Musk’s bid, Twitter’s board put in place a so-called poison pill that would make it more difficult for Musk to acquire the company without its approval. There were also questions about whether the company would try to find another buyer.

However, CFRA senior equity analyst Angelo Zino said Monday that Twitter’s board more seriously considering Musk’s offer may have come “from the Board’s realization that an alternative bid from a ‘white knight’ may be difficult to come by, especially following the decline in asset prices from social media companies in recent weeks/months.”

In a tweet midday Monday ahead of the deal announcement, Elon Musk said he hopes his critics will keep using the platform.

Musk has repeatedly called for the removal of some of Twitter’s content moderation practices.

“Is someone you don’t like allowed to say something you don’t like? And if that is the case, then we have free speech,” Musk said in an interview at the TED conference earlier this month.

However, Musk is also known for targeting critics of his companies, and once tried to pay off a teenager who tracked Musk’s private jet on Twitter to remove his account.

Twitter may not be a traditional media company, but it has an outsized impact on the media industry. And with his deal to acquire Twitter, Musk is the latest tech billionaire to buy his way to greater influence in the media industry.

Amazon founder Jeff Bezos acquired The Washington Post personally (not through Amazon) for $250 million back in 2013. The move rattled the media industry and beyond at the time, as concern mounted over how the billionaire could potentially influence the company. A few years out, however, Bezos’ investment in tech and talent has been lauded for driving web traffic and making the news outlet profitable.

Bezos and Musk are not the only tech titans besotted by the idea of owning a media giant. Salesforce founder Marc Benioff bought Time magazine in 2018 for $190 million.