Twitter’s parent company, X Corp., and its owner, Elon Musk, have asked a federal court to terminate a decade-old agreement between the company and the Federal Trade Commission over its privacy practices, citing what the company said is ongoing harassment against it by the agency and an investigation that “has spiraled out of control and become tainted by bias.”In a filing in the Northern District of California — submitted just hours before the FTC’s embattled boss, Lina Kahn, was scheduled to testify on Capitol Hill — Twitter alleges that after Mr. Musk bought the company in October 2022, the agency deluged the company with letters demanding information about internal goings-on and pressured an outside auditor monitoring its privacy and data protection efforts.“There simply is no way to square the striking record of bias … with any semblance of the impartiality, due process, or equitable conduct that the law requires from administrative agencies like the FTC when they act pursuant to court-authorized and -supervised consent orders,” the filing states.Immediately after Mr. Musk took over Twitter, the filing states, officials at the FTC attempted to co-opt auditor Ernst & Young’s independent assessments in order to generate evidence of data protection shortfalls. The efforts included dictating the procedures Ernst & Young was required to take and conveying expectations that the outcome of its audits portray Twitter in a negative light.Ernst & Young executives deposed under oath by Twitter’s lawyers said they feared that if the company did not cooperate or resigned from its position to protest the heavy-handedness, federal regulators would penalize the company in other ways. “A private litigant who engaged in such conduct might well be facing charges of witness tampering,” the filing states. “This Court should intervene to stop the FTC’s ongoing improper conduct.”The consent order under which Twitter has been operating dates back to 2011, long before Mr. Musk became involved with the company, and was extended by the court in 2022. An investigation by the agency at the time found that the company insufficiently protected users’ data and required it to establish security protocols and engage a third party to monitor its efforts. In early 2022, Twitter hired Ernst & Young to conduct those reviews.In the summer of 2022, a whistleblower from Twitter alleged in complaints to the FTC that the company had willfully ignored many of the consent order’s decrees and made false statements to the agency about its compliance. The whistleblower’s allegations surfaced three months after Mr. Musk announced his intention to buy the company but before the acquisition was finalized in late October 2022.“Mr. Musk’s acquisition of Twitter produced a sudden and drastic change in the tone and intensity of the FTC’s investigation into the company,” Thursday’s filing states. “From that date until the present, the FTC has pummeled X Corp. with burdensome demand letters and requests for depositions.”Ms. Khan, the current head of the FTC and a star of President Biden’s liberal campaign to target Big Tech via anti-trust regulations, did not mention Twitter or Mr. Musk in her opening remarks to the House Judiciary Committee on Thursday. Her quest to hobble tech companies by blocking consolidation in the industry has so far been met with little success, the latest example being a federal judge’s refusal to allow the agency to block Microsoft’s acquisition of the video game company Activision earlier this week.In her opening statement to the committee, Ms. Khan defended her attempt to aggressively regulate the country’s biggest tech companies.“Our competition mission is driven by the tenet that vigorous antitrust enforcement is critical to the growth and dynamism of our economy, as well as to our shared prosperity and liberty,” she said. “Recent decades, however, have vividly illustrated how Americans lose out when markets become more consolidated and less competitive.”The chairman of the committee, Jim Jordan, has accused Ms. Kahn of targeting conservatives in her crusades against the tech companies, and singled out the agency’s actions against Twitter in his opening statements Thursday. He called Ms. Khan’s tenure at the agency a “disaster,” and singled out its treatment of Twitter for particular scorn.The FTC’s campaign against Twitter under Mr. Musk as outlined in Thursday’s filing, Mr. Jordan said, is outrageous and unacceptable. “It’s the kind of behavior that occurs in banana republics and not in the United States of America,” he said.
