Musk's Rapid-Fire Changes At Twitter Could Cost Him Billions In Fines

Just two weeks into Elon Musk’s ownership of Twitter, the company may have already violated its consent agreement with the Federal Trade Commission (FTC), legal experts said, Brian Fung reported for CNN Business.

Photo Insert: Elon Musk's first day reporting for work as CEO of Twitter.

If proven, a violation could ultimately lead to significant personal liability for Musk, escalating the risks he faces as he stumbles through a morass of business and content moderation headaches, most of which have been self-inflicted.

The potential violation stems from a reporting obligation Twitter must fulfill whenever the company experiences a change in structure, including mergers and sales.

Under Twitter’s latest FTC consent order, which was implemented this year, Twitter must submit a sworn compliance notice to the regulator within 14 days of any such change.

The compliance notice is intended both to advise the FTC of major changes at the company as well as a commitment that it will continue to comply with the order, according to David Vladeck, a former senior FTC official and a law professor at Georgetown University.

Musk’s Twitter deal closed on Thursday, Oct. 27, prompting some legal experts to question Thursday whether Twitter had made the proper filings in light of the company’s mass layoffs and an exodus of senior executives.

Among those resigning were its chief privacy officer and chief information security officer, who would be expected to be involved in the company’s compliance reporting.

Now, the latest claims of Twitter’s violations could mean even more money is at stake, as well as possible individual liability for Musk himself. Any alleged violations would first have to be proven, and the FTC would need to decide whether to enforce, said Vladeck. But under those circumstances, he said, “I think it’s likely Musk would be named” in a future consent order.

“After all, he has made clear that he and he alone is making key decisions.”

The FTC has increasingly signaled it could seek to hold individual executives personally accountable if they’re found to have been responsible for a company’s violations, naming them in future orders and imposing binding requirements on their future conduct, even if they leave the company.

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