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Elon Musk Takes Witness Stand, Defends 2018 Buyout Tweets in Tesla Shareholder Trial

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Elon Musk's latest headache stems from the inherent brevity on Twitter, a service that he has been running since he acquired it last year.
By Associated Press | Updated: 21 January 2023

Elon Musk took the witness stand Friday to defend a 2018 tweet claiming he had lined up the financing to take Tesla private in a deal that never came close to happening.

The tweet resulted in a $40 million (roughly Rs. 323 crore) settlement with securities regulators. It also led to a class-action lawsuit alleging he misled investors, pulling him into court for about a half hour Friday to deliver sworn testimony in front of a nine-person jury and a full room of media and other spectators.

The trial was then adjourned for the weekend and Musk was told to return Monday to answer more questions.

In his initial appearance on the stand, Musk defended his prolific tweeting as “the most democratic way” to distribute information even while acknowledging constraints of Twitter’s 240-character limit can make it difficult to make everything as clear as possible.

“I think you can absolutely be truthful (on Twitter),” Musk asserted on the stand. “But can you be comprehensive? Of course not,”

Musk’s latest headache stems from the inherent brevity on Twitter, a service that he has been running since completing his $44 billion (roughly Rs.3,56,300 crore) purchase of it in October.

The trial hinges on the question of whether a pair of tweets that Musk posted on August 7, 2018, damaged Tesla shareholders during a 10-day period leading up to a Musk admission that the buyout he had envisioned wasn’t going to happen.

In the first of those two 2018 tweets, Musk stated “funding secured” for what would have been a $72 billion (roughly Rs. 5,83,100 crore) buyout of Tesla at a time when the electric automaker was still grappling with production problems and was worth far less than it is now. Musk followed up a few hours later with another tweet suggesting a deal was imminent.

After it became apparent that the money wasn’t in place to take Tesla private, Musk stepped down as Tesla’s chairman while remaining CEO as part of the Securities and Exchange Commission settlement, without acknowledging any wrongdoing.

When shown communications from Tesla investors urging him to curtail or completely stop his Twitter habit before the 2018 buyout tweet, Musk said he couldn’t remember all those interactions from years ago, especially since he gets a “Niagara Falls” of emails.

Even before Musk took the stand, U.S. District Judge Edward Chen had declared that the jurors can consider those two tweets to be false, leaving them to decide whether Musk deliberately deceived investors and whether his statements saddled them with losses.

Musk has previously contended he entered into the SEC settlement under duress and maintained he believed he had locked up financial backing for a Tesla buyout during meetings with representatives from Saudi Arabia’s Public Investment Fund.

An expert on corporate buyouts hired by shareholder lawyers to study the events surrounding Musk’s proposal to take Tesla private spent the bulk of his three hours on the stand Friday deriding the plan as an ill-conceived concept.

“This proposal was an extreme outlier,” said Guhan Subramanian, a Harvard University business and law professor for more than 20 years. “It was incoherent. It was illusory.”

In a lengthy cross examination that delayed Musk’s appearance, a lawyer for Tesla’s board of directors tried to undermine Subramanian’s testimony by pointing out that it relied on graduate student assistance to review some of the material related to the August 2018 tweets. The lawyer, William Price, also noted Subramanian’s $1,900-per-hour (roughly Rs. 1,53,900) fee for compiling his report for the case.

The trial over his Tesla tweets come at a time when Musk has been focusing on Twitter while also serving as the automaker’s CEO and also remaining deeply involved in SpaceX, the rocket ship company he founded.

Musk’s leadership of Twitter — where he has gutted the staff and alienated users and advertisers — has proven unpopular among Tesla’s current stockholders, who are worried he has been devoting less time steering the automaker at a time of intensifying competition. Those concerns contributed to a 65 percent decline in Tesla’s stock last year that wiped out more than $700 billion (roughly Rs. 56,68,900 crore) in shareholder wealth — far more than the $14 billion (roughly Rs. 1,13,400 crore) swing in fortune that occurred between the company’s high and low stock prices during the August 7-17, 2018 period covered in the class-action lawsuit.

Tesla’s stock has split twice since then, making the $420 (roughly Rs. 34,000) buyout price cited in his 2018 tweet worth $28 (roughly Rs. 2,300) on adjusted basis now. The company’s shares were trading around $133.42 (roughly Rs. 10,800) Friday, down from the company’s November 2021 split-adjusted peak of $414.50 (roughly Rs. 33,600).

After Musk dropped the idea of a Tesla buyout, the company overcame its production problems, resulting in a rapid upturn in car sales that caused its stock to soar and minted Musk as the world’s richest person until he bought Twitter. Musk dropped from the top spot on the wealth list after the stock market’s backlash to his handling of Twitter.

When asked Friday about the challenges that Tesla faced in 2018, he recalled spending many nights sleeping at the automaker’s California factory as he tried to keep the company afloat.

“The sheer level of pain to make Tesla successful during that 2017, 2018 period was excruciating,” he recalled.

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Meta, Twitter, YouTube, TikTok Issued Orders by FTC to Provide Information on Misleading Advertisements

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Snap, Amazon.com-owned Twitch, Pinterest and Instagram are the other companies which are all required to provide information.
By Reuters | Updated: 17 March 2023

The US Federal Trade Commission (FTC) on Thursday issued orders to eight social media and video streaming firms including Meta Platforms, Twitter, TikTok and YouTube seeking information on how the platforms screen for misleading advertisements.

Snap, Amazon.com-owned Twitch, Pinterest and Instagram are the other companies which are all required to provide information such as ad revenue and number of views including those in categories of products and services more prone to deception.

The companies did not immediately respond to Reuters’ requests for comment.

The regulator is seeking to scrutinize and restrict paid commercial advertising that is deceptive or exposes consumers to fraudulent healthcare products, financial scams, counterfeit and fake goods, or other fraud.

“Social media has been a gold mine for scammers who tout sham products and other scams that have cost consumers enormously in recent years,” said Samuel Levine, director of the FTC’s consumer protection bureau.

“This study will help the FTC ensure that social media and video streaming companies are doing everything they can to keep scammers and deceptive ads off their platforms.”

The order comes after the FTC asked Twitter to turn over some internal communications related to owner Elon Musk and other detailed information about business decisions as part of an investigation earlier this month.

Last month, FTC voted to withdraw an antitrust complaint challenging Meta Platforms’s purchase of virtual-reality startup Within Unlimited, officially closing the agency’s case.

The FTC sued to block the deal last year, filing twin complaints in federal court and its in-house court. Following a December trial in a San Jose federal court, US District Judge Edward Davila found in favour of Meta, ruling the FTC didn’t offer enough evidence to prove that the acquisition would harm competition in the nascent virtual-reality industry.

© Thomson Reuters 2023

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TikTok’s Bold Glamour Filter Sparks Warnings Over AI and Toxic Beauty Standards

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TikTok's Bold Glamour filter gives users plumped up lips, a well-chiselled chin and fluffy eyebrows worthy of a fashionista.

By Agence France-Presse | Updated: 10 March 2023

TikTok’s latest sensation is a real-time filter called Bold Glamour that sashays right past debates over toxic beauty standards on social media, going all in on giving users a new face.

Quietly released to the app’s more than a billion users, Bold Glamour convincingly blends a user’s real face with an AI-generated ideal of a supermodel, drawing both laughs and alarm.

Millions of posts on TikTok capture the shock at Bold Glamour’s superpowers, with users marveling at their plumped-up lips, well-chiseled chin, and fluffy eyebrows worthy of a fashionista.

“It’s the new onslaught of the ‘beauty myth’,” said Kim Johnson, associate professor of nursing at Middle Georgia State University in the United States.

Effects like Bold Glamour “lead to unhealthy behaviors such as excessive dieting, comparison, and low self-esteem,” Johnson said.

Filters and effects have been a stalwart of TikTok, Instagram, and Snapchat for years, but the latest generation of features like Bold Glamour is supercharged.

“It is not subtle. It is instantaneous. It is powerful,” said Gwendolyn Seidman, professor of psychology at Albright College, in Psychology Today.

Those yearning for social approval, like under-pressure teens, “won’t like what they see when they turn the filter off, and that’s the problem,” she added.

‘So cool’ –

But beyond Bold Glamour’s troubling aesthetic, observers are scratching their heads about the technology itself and wondering if the app is an unsung advance in artificial intelligence.

Earlier filters overlayed an effect — like joke lenses on Snapchat — over an onscreen face and were easily discernible with a sudden movement or by waving a hand in front of the image.

“What’s so cool about this is that you can … take your hand and put it in front of your face and it (continues to look) pretty darn real,” mixed reality artist Luke Hurd explained on TikTok.

And while the technology has been available on powerful computers, real-time video filters are now on smartphones, ready for all.

“This is AI for the masses to alter one’s appearance and that’s what’s catching so many people’s attention,” said Andrew Selepak, a social media professor at the University of Florida.

Contacted by AFP, TikTok declined to discuss the technology behind the app, leaving an air of mystery on how Bold Glamour actually works.

The company did insist that “being true to yourself is celebrated and encouraged” on the site and that effects help empower “self-expression and creativity.”

“We continue to work with expert partners and our community, to help keep TikTok a positive, supportive space for everyone,” TikTok said in a statement.

According to experts, Bold Glamour is using generative AI, following the same idea behind ChatGPT or Dall-E, apps that can churn out poems or art and designs on demand almost instantaneously.

Petr Somol, the AI research director at Gen, a tech security firm, said these type of filters have existed for a couple of years, but TikTok’s latest version is “pretty fine-tuned and well done”.

Crucially, if Bold Glamour were indeed generative AI’s latest iteration, it would mean that the filter depends on goldmines of data to deliver its increasingly perfect effects.

This dependency on big data comes as the Chinese-owned firm is under intense scrutiny by the United States and other western governments that fear the company’s ties to communist authorities in Beijing.

“The question is whether TikTok is really concerned with the implications of this new shiny thing,” said Selepak.

Path to ‘deep fake’ –
Catfishing, scams, deep fakes: some wonder whether state-of-the-art filters are pointing to a world where the ability to misuse the technology is now at the fingertips of anyone with a smartphone.

The latest filters “are not necessarily a deep fake technology as such, but there is a relatively straightforward path extending in that direction,” said Somol.

Siwei Lyu, professor of computer science at the State University of New York at Buffalo, said it was unlikely that the major platforms like TikTok or Meta-owned Instagram would knowingly provide dangerous tools.

But “what makes them more dangerous is people who understand the technology could change it to help users evade being identified online”, opening new avenues for misuse, he added.

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Meta Exploring Decentralised Social Networking App With ActivityPub Support Like Mastodon

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Meta's new app will reportedly be Instagram-branded and will allow users to register or login through their Instagram credentials.
By Reuters | Updated: 10 March 2023

Meta is exploring a standalone decentralized social network for sharing text updates, a company spokesperson said on Friday, in what could be a direct competitor to billionaire Elon Musk’s Twitter.

“We’re exploring a standalone decentralized social network for sharing text updates. We believe there’s an opportunity for a separate space where creators and public figures can share timely updates about their interests,” a Meta spokesperson told Reuters in an emailed statement.

Earlier in the day, the Indian business news website Moneycontrol.com first reported the news, citing sources. The report said Meta’s new content app would support ActivityPub, the decentralized social networking protocol that powers Twitter-rival Mastodon and other federated apps.

While Twitter and Facebook are controlled by one authority – a company – decentralized platforms such as Mastodon are installed on thousands of computer servers, largely run by volunteer administrators who join their systems together in a federation.

Meta’s new app would be Instagram-branded and will allow users to register or login through their Instagram credentials, according to the Moneycontrol report.

Earlier this week, Bloomberg News reported that Meta would cut thousands of jobs as soon as this week in a fresh round of layoffs, only a few months after the Facebook-parent reduced more than 11,000 people from its workforce.

The new round of job cuts is being driven by financial targets and is separate from the “flattening,” the report said, citing people familiar with the matter.

Meta declined to comment on the Bloomberg report when contacted by Reuters.

Last month, the Washington Post newspaper reported that Meta was planning to cut jobs in a reorganization and downsizing effort.

Meta, at that time, declined to comment, but spokesperson Andy Stone in a series of tweets cited several previous statements by Chief Executive Officer Mark Zuckerberg suggesting that more cuts were on the way.

© Thomson Reuters 2023

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Social Media, Video Streaming Firms Could Face Probe by US FTC Into Deceptive Advertising

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The US FTC's inquiries could lead to enforcement actions, based on the results of the probe.
By Reuters | Updated: 10 March 2023

The US Federal Trade Commission is expected to vote next week on whether to send demands for information about deceptive advertising to eight social media and video streaming companies, the agency said on Thursday.

The agency did not say which social media companies would receive the demands but said that the information would be used to determine what steps they have taken to detect and remove deceptive advertising from their platforms.

Some of the biggest social media companies are Facebook and its subsidiaries Instagram and WhatsApp. Top video streaming platforms include Alphabet’s YouTube and TikTok.

The commissioners will also vote on issuing demands for information to five business credit reporting agencies, which were not named, regarding how they collect data and market their products.

The inquiries could lead to enforcement actions, depending on what it turned up, but are designed to lead to studies that could underpin future legislation or rules.

The votes are set for an open meeting on March 16.

Meanwhile, TikTok recently announced a new data security regime, nicknamed “Project Clover”, amid growing pressure from lawmakers on both sides of the Atlantic.

The European Parliament, European Commission and the EU Council recently banned TikTok from staff phones due to growing concerns about the company, which is owned by Chinese firm ByteDance, and whether China’s government could harvest users’ data or advance its interests.

Meanwhile, the White House has backed legislation granting the administration new powers to ban Chinese-owned video app TikTok and other foreign-based technologies if they pose national security threats.

© Thomson Reuters 2023

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TikTok ‘Screams’ of National Security Concerns, FBI Director Tells US Senate Intelligence Committee

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FBI Director Christopher Wray said China's government could use TikTok to control data on millions of US users.
By Reuters | Updated: 9 March 2023

China’s government could use TikTok to control data on millions of American users, FBI Director Christopher Wray told a US Senate hearing on Wednesday, saying the Chinese-owned video app “screams” of security concerns.

Wray told a Senate Intelligence Committee hearing on worldwide threats to US security that the Chinese government could also use TikTok to control software on millions of devices and drive narratives to divide Americans over Taiwan or other issues.

“Yes, and I would make the point on that last one, in particular, that we’re not sure that we would see many of the outward signs of it happening if it was happening,” Wray said of concerns China could feed misinformation to users.

“This is a tool that is ultimately within the control of the Chinese government – and it, to me, it screams out with national security concerns,” Wray said.

The White House backed legislation introduced on Tuesday by a dozen senators to give President Joe Biden’s administration new powers to ban TikTok and other foreign-based technologies if they pose national security threats. The endorsement boosted efforts by a number of lawmakers to ban the popular app, which is owned by Chinese company ByteDance and used by more than 100 million Americans.

Other top US intelligence officials including Director of National Intelligence Avril Haines, CIA Director William Burns and National Security Agency Director Paul Nakasone agreed at the hearing that TikTok posed a threat to US national security.

Nakasone on Tuesday expressed concern during Senate testimony about TikTok’s data collection and potential to facilitate broad influence operations.

© Thomson Reuters 2023

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Instagram Down? Thousands of Users Report Issues Accessing Meta’s Photo and Video Sharing Service

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Over 46,000 users said they were unable to access Instagram at the peak of the outage.
By Reuters | Updated: 9 March 2023

Instagram was down for thousands of users globally on Thursday, according to outage tracking website Downdetector.com.

More than 46,000 users reported issues with accessing the photo-sharing platform in the US at the peak of the outage, according to Downdetector, which tracks outages by collating status reports from a number of sources including user-submitted errors on its platform.

Downdetector showed about 2,000 affected users from the UK, and more than 1,000 reports each from India and Australia.

Instagram was down for thousands of users globally on Thursday, according to outage tracking website Downdetector.com.

More than 46,000 users reported issues with accessing the photo-sharing platform in the US at the peak of the outage, according to Downdetector, which tracks outages by collating status reports from a number of sources including user-submitted errors on its platform.

Downdetector showed about 2,000 affected users from the UK, and more than 1,000 reports each from India and Australia.

The board, which has 22 members, said it will now begin publishing decisions on some cases on an expedited basis. Rulings could come as quickly as 48 hours after accepting a case, while others could take up to 30 days.

Standard decisions, in which the Oversight Board reviews Meta’s content moderation actions in depth, can take up to 90 days.

Publishing more decisions and increasing the pace will “let us tackle more of the big challenges of content moderation, and respond more quickly in situations with urgent real-world consequences,” the board said in the blog post.

© Thomson Reuters 2023

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