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MONEY & BUSINESS: Twitter could face billions in fines over not protecting minors from porn: ex-FTC officials

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Twitter has reportedly failed to adequately police underage pornography across its social network — a mess posing the risk of a federal investigation that could cost the company billions of dollars in fines, The Post has learned.

The embattled social media site — which is in the middle of a court battle with Elon Musk to enforce an agreement to sell him the company for $44 billion — may have broken a so-called consent decree with the Federal Trade Commission when the company reportedly found in an internal study this year that it doesn’t adequately stop underage users from viewing and uploading porn, two former FTC officials told The Post.

Specifically, Twitter executives reportedly found in an internal study the company lacked adequate controls to prevent underage users from both accessing and uploading pornography, according to an Aug. 30 story in the Verge, which cited an internal Twitter team’s findings. Unlike other major social media companies, Twitter allows porn on its site.

The internal researchers reportedly said the site also is unable to consistently detect banned content such as child porn, revenge porn and non-consensual “upskirt” photos once it’s uploaded to the site. 

“Twitter cannot accurately detect child sexual exploitation and non-consensual nudity at scale,” the researchers wrote in April, according to the Verge.

While regulators haven’t publicly reacted to the report thus far, Twitter’s failures could run afoul of its commitments under a consent decree signed in 2011, which requires that Twitter “shall not misrepresent” the extent to which it protects the security and privacy of users, former FTC officials said. The alleged problems with porn moderation could qualify as undisclosed user privacy and security problems, according to the officials.

Twitter is at risk of a Federal Trade Commission probe and fine over its alleged porn problem, ex-FTC officials say.
AFP via Getty Images

Spokespeople for Twitter and Musk declined to comment. The FTC did not respond to a request for comment.

In response to the Verge story, Twitter said that it has “zero tolerance for child sexual exploitation.”

“We aggressively fight online child sexual abuse and have invested significantly in technology and tools to enforce our policy” the company added. “Our dedicated teams work to stay ahead of bad-faith actors and to help ensure we’re protecting minors from harm — both on and offline.”

‘No hesitation’

In an exclusive interview with The Post, former FTC Chairman William Kovacic called for the FTC, which he noted has a mission to protect consumers, to immediately investigate the allegations. He said Twitter could be hit with a fine in the range of $5 billion if it is found to have violated the consent decree by failing to protect underage users.

Twitter is subject to a FTC consent decree until 2031.
Bloomberg via Getty Images

“There should be no hesitation,” Kovacic said of a potential FTC investigation.

Kovacic was one of five FTC commissioners who inked the 2011 consent decree — which followed a pair of major hacks that the FTC blamed on “serious lapses in the company’s data security” — requiring Twitter to not mislead consumers about safety and privacy. It remains in effect until 2031.

Another former FTC official, who asked not to be named, also told The Post that Twitter’s alleged underage porn problem should immediately be probed by the agency, which is currently led by anti-Big Tech hardliner Lina Khan. 

Underage users’ access to porn had been a priority for the FTC when it drafted the 2011 consent decree, but it appears the company hasn’t done enough to live up to its commitments, the ex-FTC official said.

If Twitter can’t “control” which users view or upload porn, the ex-FTC official added, “then it’s reasonable to conclude that they would be in violation of the 2011 prohibition not to misrepresent security and privacy of users.” 

Kovacic said the FTC fines a company based partly on how long it hasn’t complied with a consent decree. If the agency determines that Twitter has been out of compliance for more than 10 years, he said the fine could be in the $5 billion range — roughly equal to Twitter’s entire 2021 revenue. 

“There should be no hesitation,” former FTC Chair William Kovacic said of a potential FTC investigation into Twitter’s alleged porn problem.
CQ-Roll Call, Inc via Getty Imag

Implications for Musk

Twitter found the alleged problems with age verification while it considered a plan this spring to boost revenue by launching an OnlyFans-style feature that would allow Twitter users to sell dirty photos and videos, the Verge reported.

Twitter reportedly assigned a team of 84 employees to pressure-test the idea. The team allegedly found that Twitter already lacks the ability to consistently stop underage users from viewing or uploading porn — and that the problem would be made worse by letting users charge for porn. 

After the researchers presented their findings, the company reportedly shelved the project as it focused on the messy takeover battle with Musk.

Now, a source close to the court battle said Musk’s legal team is expected to try to seize on a potential FTC probe and fine as part of his effort to terminate his $44 billion takeover deal.

In addition to the porn issue, Twitter’s former head of security, the famed hacker Peiter “Mudge” Zatko, recently filed an explosive whistleblower complaint alleging Twitter is a risk to national security — allegations which are expected to prompt investigations by the FTC and other US agencies.

Nevertheless, two university law professors told The Post the porn allegations are unlikely to make a large difference in the court trial. The FTC typically takes four to six months to investigate violations and levy fines, Kovacic said. The trial, meanwhile, is slated to kick off Oct. 17.

Elon Musk
Elon Musk’s legal team is expected try to seize on a potential FTC probe as part of his effort to terminate his $44 billion takeover deal.
NTB/AFP via Getty Images

The possibility that Twitter violated the FTC consent decree is not enough to help Musk because the language in the merger agreement requires a far higher standard, University of Iowa corporate finance and law chair Robert Miller said.

“The judge needs to know when the FTC intends to act and what it intends to do to consider it in the case,” added Boston College Professor Brian Quinn, who’s an expert on mergers and acquisitions. Unless the FTC were to conduct an investigation far more quickly than normal, it’s unlikely the judge would have such information by the time the trial opens.

And even if Musk’s team can show an FTC fine is likely, the penalty would have to be massive enough to have a material adverse effect on Twitter, which usually means it would have to reduce its value by about 20%, Miller said. 

Twitter
Twitter wants to force Elon Musk to go through with the $44 billion takeover deal.
NurPhoto via Getty Images

“A one-time fine, even a big one, doesn’t reduce the earnings enough,” Miller said.

Instead of helping Musk scrap his Twitter takeover, the underage porn allegations could ultimately hurt him. If Delaware courts force him to go through with the deal, any FTC fine levied after the takeover would likely be his problem. 

Whistleblower comments

Zatko, the whistleblower, was asked about the child porn allegations during his lengthy Congressional testimony on Tuesday.

“There were discussions about age-related information and the discussions internally I heard were concerns about lack of tools to correctly regulate or constrain [underage content],” Zatko said in response to a question from Sen. John Kennedy (R-La.) about Twitter’s porn plans. 

Peiter Zatko
Twitter whistleblower Peiter “Mudge” Zatko said “I heard were concerns about lack of tools to correctly regulate or constrain [underage content].”
The Washington Post via Getty Im

Marsha Blackburn (R-Tenn.) told Zatko that an internal Twitter team found they had too much child and nonconsensual pornography that was on the site — an apparent reference to the Verge report. Zatko responded that he was not aware of any such team but “unfortunately it does not surprise me.” 

The whistleblower added that he didn’t work on porn at Twitter but knew that some of the site’s advertisers had raised concerns about their ads appearing next to adult content. 

Zatko alleged repeatedly that Twitter has misled the FTC about its compliance with the 2011 consent decree by violating user privacy outside of the context of pornography. He called for the antitrust regulator to take a stronger stance against Twitter and other tech firms. 

“I believe the FTC is in a little over their head, compared to the size of the Big Tech companies,” he said. “They’re left letting companies grade their own homework.” 

In response to Zatko’s testimony, Twitter said: “Today’s hearing only confirms that Mr. Zatko’s allegations are riddled with inconsistencies and inaccuracies.”

Twitter agreed in May to pay the FTC a $150 million fine for breaking the consent decree after regulators accused the company of collecting phone numbers and emails for security purposes and then accidentally shared that data with advertisers. 

The company said at the time that “some email addresses and phone numbers provided for account security purposes may have been inadvertently used for advertising” and pledged to “continue to partner with the FTC.”





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