Musk is brandishing Twitter’s bankruptcy risk. Even without verification seals, the Portuguese court has ordered the blocking of fake accounts in the past

 Musk is brandishing Twitter's bankruptcy risk.  Even without verification seals, the Portuguese court has ordered the blocking of fake accounts in the past

There was still no mention of the blue verification seal and Elon Musk was even better known as leader of Tesla and SpaceX, when the Intellectual Property Court in Lisbon decides to notify Twitter. In this action, the Portuguese court ordered the social network to block an account operated by unknown individuals who used the name and brand image of the Institute for Educational Assessment (IAVE), which is responsible for preparing school exams. The case dates back to 2017 and the verdict was carried out. But only now, with the purchase of the most famous “bird” on the Internet by the richest businessman in the world, the scope of the phrase takes on a new meaning.

“This case confirms that Twitter is not exempt from complying with the rules, even if there is no seal of verification from the account holders,” explained Manuel Lopes Rocha, an intellectual property and technologies specialist at the law firm RBMS.

An outspoken advocate for freedom, Lopes Rocha has made no secret of the hesitation generated by the appearance of a new authorship and identity verification system, which was launched on Twitter after Elon Musk paid out 44 billion euros (42.49 billion euros). for the purchase of the company. . But this isn’t the only legal “hole” in the social network’s new business model.

Yoel Roth, in charge of the security and integrity area, took on the mission of reassuring sponsors and advertisers about Twitter’s operation in Musk’s newly opened consulate, but eventually left shortly after attempting to carry out the mission. Even worse, Lea Kissner, Director of Information Security, Damien Kieran, Director of Privacy, and Marianne Fogarty, Director of Compliance with Regulation (“Compliance”), also refer to the North American media.

Since 2009, Twitter has been trying to implement an account verification system. Musk tried to renew it with a $7.99 fee and apparently had to back out.


The departure took the company’s crisis to a new level: the Federal Trade Commission (FTC) soon tried to warn the company that it must abide by the agreement, which is still confidential, which was closed after a lawsuit leading to led the social network to pay $150 million in fines for using the personal contacts of owners of various accounts for commercial purposes — even though he said he only wanted this data for security purposes.

The fine was imposed for misuse of 140 million user accounts between 2014 and 2019 — but the case is fresh in people’s minds, as the court settlement between Twitter and the FTC dates back to May 2022. And it has important legal implications: Musk wants to change the business model of the social network from top to bottom, but because of what was defined under the tutelage of the US courts, he must conduct prior privacy impact assessments before starting to change the business model.

The departure of four professionals with key roles for a company that is the company’s main driver of personal data management may indicate that hardly anyone believes the South African businessman is ready to break the deal – or even the laws. On top of that, contrary to what Musk may have initially predicted, changes in Twitter’s business model will always be subject to regulatory constraints that may even have international proportions, as the FTC recalled in a statement pointing the finger to the social network for misleading Internet users by ensuring that it complied with the procedures of the Privacy Shield treaty, which allowed accelerated data flows between the European Union and the United States.

The Privacy Shield is currently invalidated by a ruling of the Court of Justice of the EU (CJEU) and Washington and Brussels have launched new rounds of negotiations for an Atlantic alignment based on the development of the digital economy. Tiago Félix da Costa, who works in the field of privacy at Sociedade de Advogados Morais Leitão, recalls that Joe Biden’s administration even issued an executive order in October for the application of the measures that help to comply with the European requirements when it comes to securing data. Outcome: Any change in Twitter’s rules could also have an indirect outcome in negotiations deemed of increasing importance on both sides of the Atlantic.

“Recently expressed concerns are related to the departure of people working in the fields of privacy and compliance, but it should not be forgotten that there has been tension between the US and the EU about flows of personal data,” says the lawyer.

According to several media outlets, the South African multimillionaire has already shown signs that he is prepared to confront the FTC – if only because there is a perception that he can push boundaries in the same way that he transcends the atmosphere by to send missiles from the air. SpaceX on space missions, and gave the US back the ability to launch space missions, at a time when it was partially dependent on Russian missiles.

It remains to be seen if brutality works as an element of pressure on authorities or if it returns as a boomerang capable of bringing down Twitter. “Elon Musk may even be a superstar, but he entered a market [das redes sociais] over which it has no control and which has been heavily scrutinized in recent times, as we have seen with the investigations launched against Facebook. Musk doesn’t fully understand what kind of world this is and instead of a slow and gradual transition, he is making a business transformation at the bottom,” said David Quinta, Director of the Digital Area at BBDO Portugal Marketing Agency.

Costs or bankruptcy?

What’s wrong is about to get worse – and Elon Musk, the unpredictably richest person in the world who also holds the most-followed account on Twitter, was soon showing signs that he’s not immune to doubt or fear.

“Without significant subscription revenue, Twitter is unlikely to survive the coming economic recession,” the businessman warned in an email to professionals remaining at the company following the layoffs that could affect half of the workforce. assigned. “We need to make sure that about half of our revenue comes from subscriptions,” he added at the same time.

It remains to be seen if the phrase is intended to scare the team that has remained on Twitter or if it stems from the desperation of those who invested $44 billion after guaranteeing loans worth $13 billion from banks and convincing businessmen like Larry Ellison, founder of Oracle, to investing $2 billion in half a dozen messages from electronic platforms or even SMS. In any case, it is important to remember that Elon Musk will hardly ever stop being… Elon Musk.

“To people, it may seem like the end of the world is approaching on social networks, but it’s just a normal day in the life of Elon Musk,” said Roberto Gomes, director of digital marketing platform Brinfer.

As more “normal days” in Musk’s life are fended off, one question is beginning to take shape: Is Twitter still the same social network that played a decisive role in the Arab Springs that led to uprisings and regime change in Egypt, in Tunisia, Syria or Libya?

“Twitter has always been guided by strong rules in defense of democratic values, but now it paints a picture of fragility or of a platform without king or rock. And that ultimately affects the confidence of companies,” explains David Quinta.

Pfizer, United Airlines, General Mills, Audi, Ford, Volkswagen and General Motors are among the first wave of companies that have decided to suspend advertising investment on Twitter, with no announced deadline and possibly following specialists and marketing agencies who reportedly already started advising a wait and see position on the social network.

“The news makes one believe in a weakening of the privacy and compliance area and nowadays no company can risk doing that (because the authorities and the market react immediately)”, emphasizes Félix da Costa.

the blue storm

Even within the plan designed by Musk, there is no shortage of setbacks and setbacks: as soon as it became available, the blue verification seal was apparently activated by several people without much delay or identity confirmation procedures, beyond the payment of the fee from $ 7.99 .

According to Reuters, the blue verification seal was used to launch fake accounts for Tesla and SpaceX, which are controlled by Musk, as well as Nestlé and Lockheed Martin. Eli Lilly, a pharmaceutical company that was also the target of a similar trick on Twitter, came out to apologize to consumers who believed tweets from a bogus homonymous account announcing that insulin was going free.

US President Joe Biden issued an executive order to apply measures to enable a new EU-US data flow treaty

US President Joe Biden issued an executive order to apply measures to enable a new EU-US data flow treaty

Kevin Lamarque/Reuters

“It’s somewhat unexpected that Twitter’s first form of monetization is through account verification fees. It would make sense to charge for features that block ads or allow editing of texts after they’re published, but account verification is a basic tool to ensure the veracity of content. It is too important to be part of a business model,” added Roberto Gomes.

On Wednesday, as the chaos takes shape, Musk announces that he has ended the blue verification seal that still began the first hours of his life. On Friday, a new embarrassing situation follows: to avoid further public confusion, Twitter is restoring the old verification stamps and applying them to the official accounts of personalities, brands and public entities previously recognized on the social network. .

Apparently, the award of the blue seal has now been suspended, as Musk warned two days earlier. And the fake accounts that do not inform the public have been blocked as soon as they are discovered, despite the businessman allegedly buying Twitter, allegedly with the aim of restoring “absolute freedom”.

WeChat’s business model, which has added communication, social networking and payment functions in China, risks becoming a mirage if Twitter’s development is carried out at the pace of progress and setbacks due to legal or technical difficulties. Roberto Gomes admits that all of these mishaps could be a result of Musk’s provocative manner, which detracts from the credibility of the messages he conveys to the public. But he also remembers that it is too early to dictate the end of this story.

“Unless people leave en masse, I don’t see companies fleeing. The money goes where there is an audience,” says the person responsible for Brinfer. “Nothing guarantees that what Musk does on Twitter will go right, but we’re still a long way from knowing if it will actually go wrong,” he added.

Elon Musk’s tweets will try to reveal the next chapters.