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After Twitter Takeover, Elon Musk Has More Legal Battles to Deal With

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By Reuters | Updated: 29 October 2022

Elon Musk was forced through a months-long court battle to buy Twitter on Thursday, but numerous lawsuits remain against the world’s richest person and electric carmaker Tesla, where he is chief executive.

Twitter Lawsuit

Twitter investors sued Musk in May in San Francisco federal court, claiming he manipulated Twitter’s stock price by failing to disclose in March he was amassing shares in the social media platform. The Securities and Exchange Commission has also said it is investigating the timing of Musk’s disclosures.

Musk’s attorneys have asked the court to dismiss the lawsuit, arguing it is barred by federal securities law.

$55 Billion Tesla Pay Lawsuit

A shareholder of Tesla wants a judge to find that Musk’s Tesla pay package, which is estimated to be worth $55 billion (roughly Rs. 4,52,600 crore), unjustly enriches Musk. The case is scheduled to go to trial on November 14 in Delaware’s Court of Chancery. Tesla has said the pay aligns Musk’s incentives with shareholders and has benefited investors.

Employment Disputes

Tesla and Musk are defending numerous allegations of workplace harassment and discrimination, including a lawsuit by California’s Department of Fair Employment and Housing (DFEH).

In 2021, a jury awarded a Black elevator operator who worked at Tesla’s factory in Fremont, California, $137 million (roughly Rs. 1,130 crore) in damages before a new trial was ordered. Separately, a Tesla shareholder has sued the company, claiming it has not adequately tackled workplace discrimination and harassment.

Tesla has said it does not tolerate discrimination and has taken steps to address workers’ complaints.

Lawsuits Sparked by Musk’s Tweets

In August 2018, Musk sent a tweet that he had “funding secured” to take Tesla private, sending shares sharply higher. The tweet sparked a series of lawsuits.

A 2018 lawsuit by the US Securities and Exchange Commission ended with Musk stepping down as Tesla chairman, paying fines and having a lawyer approve some of his tweets before posting them.

Tesla shareholders are suing in Delaware to tighten oversight of Musk’s tweets about the company. In a separate ongoing case alleging Musk inflated Tesla stock by making false statements, a US District Court in San Francisco found the 2018 tweet was inaccurate and reckless.

JPMorgan Chase also sued Tesla in November for $162.2 million (roughly Rs. 1,330 crore), saying it was forced to reprice Tesla stock warrants after the 2018 tweet. Tesla said the tweet was a personal statement by Musk and countersued the bank, arguing it was seeking a “windfall” and should have terminated the warrants rather than reprice them.

Investigations of Tesla Driver Assistance

Tesla has reported 273 vehicle crashes since July 2021 involving advanced driving assistance systems, sparking investigations including a US criminal probe over claims that the cars can drive themselves, sources told Reuters.

Tesla has said Autopilot “enables your car to steer, accelerate and brake automatically within its lane,” while Full-Self Driving also enables vehicles to obey traffic signals and make lane changes.

SolarCity Litigation

Tesla investors are appealing an April ruling by a Delaware judge who ruled that Musk did not unjustly enrich himself when he guided the company in 2016 to acquire SolarCity, where Musk was chairman and the largest shareholder.

The investors had sought more than $10 billion (roughly Rs. 82,290 crore) in damages.

The SEC opened an investigation in December over a whistleblower complaint that Tesla failed to properly notify shareholders and the public of fire risks of its solar panel systems.

© Thomson Reuters 2022

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Elon Musk Calls Donald Trump’s Twitter Ban ‘Grave Mistake’, Condemns Violence

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By Reuters | Updated: 26 November 2022

Twitter’s ban on then President Donald Trump after January 6, 2021, attack on the US Capitol by his supporters was a “grave mistake” that had to be corrected, Chief Executive Elon Musk said on Friday, although he also stated that incitement to violence would continue to be prohibited on Twitter.

“I’m fine with Trump not tweeting. The important thing is that Twitter correct a grave mistake in banning his account, despite no violation of the law or terms of service,” Musk said in a tweet. “Deplatforming a sitting President undermined public trust in Twitter for half of America.”

Last week, Musk announced the reactivation of Trump’s account after a slim majority voted in a Twitter poll in favor of reinstating Trump, who said, however, that he had no interest in returning to Twitter. He added he would stick with his own social media site Truth Social, the app developed by Trump Media & Technology Group.

Republican Trump, who 10 days ago announced he was running for election again in 2024, was banned on January 8, 2021, from Twitter under its previous owners.

At the time, Twitter said it permanently suspended him because of the risk of further incitement of violence following the storming of the Capitol. The results of the November 2020 presidential election won by Democrat Joe Biden were being certified by lawmakers when the Capitol was attacked after weeks of false claims by Trump that he had won.

Trump repeatedly used Twitter and other sites to falsely claim there had been widespread voter fraud, and had urged supporters to march on the Capitol in Washington to protest.

The attack is being investigated by US prosecutors and a congressional committee.

Twitter did not immediately respond to a request for comment on Friday on Musk’s statement that Trump did not violate any Twitter terms of service when his account was suspended.

Earlier on Friday, Musk tweeted that calling for violence or incitement to violence on Twitter would result in suspension, after saying on Thursday that Twitter would provide a “general amnesty” to suspended accounts that had not broken the law or engaged in spam.

Replying to a tweet, Musk said it was “very concerning” that Twitter had taken no action earlier to remove some accounts related to the far-left Antifa movement. In response to another tweet asking if Musk considered the statement “trans people deserve to die” as worthy of suspension from the platform, the billionaire said: “Absolutely”.

Change and chaos have marked Musk’s first few weeks as Twitter’s owner. He has fired top managers and it was announced that senior officials in charge of security and privacy had quit.

© Thomson Reuters 2022

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Elon Musk Says Twitter Will Grant ‘General Amnesty’ for Suspended Accounts From Next Week

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By Reuters | Updated: 25 November 2022

Elon Musk said on Thursday that Twitter will provide a “general amnesty” to suspended accounts starting next week after running a poll on whether to do so for users who had not broken the law or engaged in egregious spam. In a poll Musk posted on Twitter on Wednesday, 72.4 percent of the more than 3.16 million users who took part voted in favour of bringing back those who had been suspended by the social media platform.

“The people have spoken,” Musk, who acquired Twitter last month, tweeted on Thursday. “Amnesty begins next week.”

Last week, Musk, the world’s richest person, reinstated some previously suspended accounts, including former US President Donald Trump, satirical website Babylon Bee and comedian Kathy Griffin.

He tweeted in October that Twitter would form a content moderation council “with widely diverse viewpoints.” Musk said no major content decisions or account reinstatements would happen before the council convened.

Change and chaos have marked the billionaire’s first few weeks as Twitter’s owner. He has fired top managers, including former Chief Executive Parag Agarwal, and it was announced that senior officials in charge of security and privacy had quit.

Those resignations drew scrutiny from the US Federal Trade Commission, whose mandate includes protecting consumers and which said it was watching Twitter with “deep concern.”

He tweeted in October that Twitter would form a content moderation council “with widely diverse viewpoints.” Musk said no major content decisions or account reinstatements would happen before the council convened.

Change and chaos have marked the billionaire’s first few weeks as Twitter’s owner. He has fired top managers, including former Chief Executive Parag Agarwal, and it was announced that senior officials in charge of security and privacy had quit.

Those resignations drew scrutiny from the US Federal Trade Commission, whose mandate includes protecting consumers and which said it was watching Twitter with “deep concern.”

© Thomson Reuters 2022

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Twitter, Other Social Media Apps Fail to Remove Hate Speech, Says EU Review

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By Associated Press | Updated: 25 November 2022

Twitter took longer to review hateful content and removed less of it in 2022 compared with the previous year, according to European Union data released Thursday.

The EU figures were published as part of an annual evaluation of online platforms’ compliance with the 27-nation bloc’s code of conduct on disinformation.

Twitter wasn’t alone — most other tech companies signed up to the voluntary code also scored worse. But the figures could foreshadow trouble for Twitter in complying with the EU’s tough new online rules after owner Elon Musk fired many of the platform’s 7,500 full-time workers and an untold number of contractors responsible for content moderation and other crucial tasks.

The EU report, carried out over six weeks in the spring, found Twitter assessed just over half of the notifications it received about illegal hate speech within 24 hours, down from 82 percent in 2021.

In comparison, the amount of flagged material Facebook reviewed within 24 hours fell to 64 percent, Instagram slipped to 56.9 percent and YouTube dipped to 83.3 percent. TikTok came in at 92 percent, the only company to improve.

The amount of hate speech Twitter removed after it was flagged up slipped to 45.4 percent from 49.8 percent the year before. TikTok’s removal rate fell by a quarter to 60 percent, while Facebook and Instagram only saw minor declines. Only YouTube’s takedown rate increased, surging to 90 percent.

“It’s worrying to see a downward trend in reviewing notifications related to illegal hate speech by social media platforms,” European Commission Vice President Vera Jourova tweeted. “Online hate speech is a scourge of a digital age and platforms need to live up to their commitments.”

Twitter didn’t respond to a request for comment. Emails to several staff on the company’s European communications team bounced back as undeliverable.

Musk’s acquisition of Twitter last month fanned widespread concern that purveyors of lies and misinformation would be allowed to flourish on the site. The billionaire Tesla CEO, who has frequently expressed his belief that Twitter had become too restrictive, has been reinstating suspended accounts, including former President Donald Trump’s.

Twitter faces more scrutiny in Europe by the middle of next year, when new EU rules aimed at protecting internet users’ online safety will start applying to the biggest online platforms. Violations could result in huge fines of up to 6 percent of a company’s annual global revenue.

France’s online regulator Arcom said it received a reply from Twitter after writing to the company earlier this week to say it was concerned about the effect that staff departures would have on Twitter’s “ability maintain a safe environment for its users.”

Arcom also asked the company to confirm it can meet its “legal obligations” in fighting online hate speech and that it is committed to implementing the new EU online rules. Arcom said it received a response from Twitter and that it will “study their response,” without giving more details.

Tech companies that signed up to the EU’s disinformation code agree to commit to measures aimed at reducing disinformation and file regular reports on whether they’re living up to their promises, though there’s little in the way of punishment.

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Twitter Responds to France Communication Regulator’s Query on Deadline

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By Reuters | Updated: 25 November 2022

Twitter has met a Thursday deadline to respond to France’s communications regulator about whether the company can meet its legal obligations, a spokesperson for the regulator said.

Arcom sent a letter on Monday to Twitter asking if it can meet its legal obligation to guarantee transparent information in spite of steep job cuts at the firm.

“Twitter responded to our letter,” the spokesperson for Arcom said. “We will analyse their response. The dialogue is continuing.”

A few days back, it was reported that Twitter’s head of French operations, Damien Viel, said he was quitting the social media platform, whose new owner Elon Musk recently fired top executives and enforced steep job cuts at the company.

“It’s over,” Viel tweeted on Sunday, thanking his team in France, which he led for the last seven years.

Viel confirmed he was leaving Twitter in a separate message to Reuters.

He didn’t elaborate on the circumstances of his departure and declined to say how many people Twitter employed in France either before or after Musk’s takeover of the company last month.

Labour laws in France prevent companies from firing permanent employees overnight. France-based companies have to formally tell staff they aim to dismiss about their plans ahead of time, typically via a letter with acknowledgement of receipt.

They also have to respect certain notice periods, depending on the nature of the dismissal and the seniority of the staff.

For dismissals affecting several employees within 30 days, companies must also follow certain procedures, which entail informing staff, staff representatives and the ministry of labour.

This means the whole process takes at least several weeks and up to several months.

A spokesperson for Twitter in France hasn’t replied to messages seeking comment since Musk’s takeover in October.

© Thomson Reuters 2022

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Elon Musk Polls Users on ‘General Amnesty’ for Suspended Twitter Accounts

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By Agence France-Presse | Updated: 24 November 2022

New Twitter owner Elon Musk on Wednesday polled users on whether the site should offer a general amnesty to suspended accounts, using the same method he used to handle the case of Donald Trump.

The move comes as Musk has faced pushback that his criteria for content moderation is subject to his personal whim, with reinstatements decided for certain accounts and not others.

“Should Twitter offer a general amnesty to suspended accounts, provided that they have not broken the law or engaged in egregious spam?” Musk asked in a tweet.

Should Twitter offer a general amnesty to suspended accounts, provided that they have not broken the law or engaged in egregious spam?

— Elon Musk (@elonmusk) November 23, 2022

The poll was open until 17:46 GMT (11:16 IST) on Thursday and mimicked the strategy used just days ago for the former US president Trump.

Trump’s Twitter account was reinstated Saturday after a narrow majority of respondents supported the move

Polls on Twitter are open to all users and are unscientific and potentially targeted by fake accounts and bots.

A blanket decision on suspended accounts could potentially alarm government authorities that are keeping a close look at Musk’s handling of hateful speech since he bought the influential platform for $44 billion (roughly Rs. 3,59,460 crore).

It could also spook Apple and Google, tech titans that have the power to ban Twitter from their mobile app stores over content concerns.

Trump was banned from the platform early last year for his role in the January 6 attack on the US Capitol by a mob of his supporters seeking to overturn the results of the 2020 election.

‘No mercy’

Musk’s reinstatement of Trump followed that of other banned accounts including a conservative parody site and a psychologist who had violated Twitter’s rules on language identifying transgender people.

The CEO of Tesla and SpaceX has said that conspiracy theorist Alex Jones will not be returning to Twitter and will remain banned from the platform.

Musk on Sunday said he had “no mercy for anyone who would use the deaths of children for gain, politics or fame” due to his own experience with the death of his first child.

Jones has been ordered to pay hundreds of millions of dollars in damages for his lies about the 2012 Sandy Hook Elementary School shooting that killed 26 people, mostly children.

Musk, who closed his buyout of Twitter in late October, did not make clear whether the bans to be covered by the poll were permanent suspensions or temporary ones.

The future of content moderation on Twitter has become an urgent concern, with major advertisers keeping away from the site after a failed relaunch earlier this month saw a proliferation of fake accounts, causing embarrassment.

Meanwhile the teams in charge of keeping nefarious activity off the site have been gutted, victims of Musk-led layoffs that saw half of total employees leave the company.

John Wihbey, a media professor at Northeastern University, speculated that all the chaos might be because Musk is seeking to “buy himself time.”

“Regulators are certainly going to get come after him, both in Europe and maybe the United States… and therefore a lot of what he’s doing is trying to frame those fights,” Wihbey said.

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Meta Spokesperson Denies Report of CEO Mark Zuckerberg Resigning in 2023

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By Reuters | Updated: 23 November 2022

Meta spokesperson Andy Stone said in a tweet on Tuesday that a report on Chief Executive Officer Mark Zuckerberg stepping down next year was false. A report on Tuesday stated that Zuckerberg would resign as the company’s CEO next year, and came weeks after the company announced it would lay off over 11,000 employees, or nearly 13 percent of its workforce. The Facebook parent firm has doubled down on its risky metaverse bet, under Zuckerberg’s leadership, amid a crumbling advertising market and decades-high inflation.

News website The Leak earlier in the day reported that Zuckerberg was set to resign in 2023, citing an unnamed insider source. The report briefly sent the company’s shares up 1 percent. Meta spokesperson Andy Stone responded on Twitter, stating “this is false.” in response to a tweet with the story.

Earlier this month, Meta announced it would cut more than 11,000 jobs, or 13 percent of its workforce in what could be one of the biggest mass layoffs this year, and the first in the company’s 18-year history. Firms like Twitter, Microsoft, and Snap have all laid off thousands of employees this year. At the time, the company said that affected employees will also receive shares that were set to vest on November 15 and healthcare coverage for six months, according to Meta, which had 87,314 employees as of the end of September.

Meta, once worth more than $1 trillion (roughly Rs. 81,78,125 crore), is now valued at $256 billion (roughly Rs. 20,93,600 crore) after losing more than 70 percent of its value this year alone.

At the time, the company said that other than the job cuts, which will impact units across Meta with a disproportional hit to the recruiting and business teams, the company will also reduce office space, lower discretionary spending, and extend a hiring freeze into the first quarter to rein in expenses.

Meanwhile, the company expects to pour leftover resources into its Reality Labs unit that is responsible for its metaverse investments. The business lost $9.44 billion (roughly Rs. 77,200 crore) from January to September this year, with losses expected to grow significantly in 2023.

© Thomson Reuters 2022

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