Elon Musk Again Petitions FTC to End 20-Year Data Privacy Order on X
Key Takeaways
- ▸Musk's corporate restructuring argument—that X merged into xAI then SpaceX—faces legal headwinds as regulatory orders typically follow the original entity regardless of reorganization
- ▸The FTC documented critical compliance gaps following Musk's acquisition: 37% of privacy controls had no owner, employees had to disobey Musk directly to maintain compliance, and security practices deteriorated due to layoffs
- ▸This is Musk's second unsuccessful attempt to escape the order; the court previously ruled it lacked authority to terminate the FTC's order
Summary
Elon Musk has filed a new petition with the Federal Trade Commission asking them to set aside a 20-year data privacy order imposed on Twitter (now X) following a 2020 settlement over a 2013-2019 incident where a coding error allowed phone numbers and emails intended for two-factor authentication to be misused for targeted advertising. The original FTC order required Twitter to pay $150 million and submit to regular independent audits and FTC document requests until 2042 to ensure compliance with strict data-handling restrictions.
Musk's latest petition employs a corporate restructuring argument, claiming that X no longer exists as a separate entity since it was merged into xAI, which was subsequently folded into SpaceX. He also argues that the original personnel responsible for the privacy violation are no longer at the company and that X has built a world-class privacy and data-protection program that makes ongoing FTC oversight unnecessary. Additionally, Musk contends the company has already spent $17 million in duplicative compliance costs.
This represents Musk's second legal challenge to the FTC order. His 2023 lawsuit failed when the court ruled it lacked authority to amend or terminate the FTC's order. The FTC has rejected his arguments, citing serious compliance concerns following his 2022 acquisition, including that 37% of X's privacy program controls lacked a responsible owner after staff cuts and that Musk personally pressured employees to bypass security controls.
