Musk's Twitter chaos brings sharp FTC warning

Elon Musk’s Twitter came under sudden and unusual fire from the Federal Trade Commission on Thursday, after a chaotic 24 hours in which new subscription rules triggered a raft of fake “verified” accounts, and key privacy and security executives quit.

Last night’s rollout of a new policy in which Twitter users could purchase “blue check” verifications for $8 a month uncorked a wave of bogus accounts, each bearing a blue “verified” check, impersonating a swath of public figures — Donald Trump, George W. Bush, Rudy Giuliani, Joe Biden.

Many have been taken down, but with half its workforce laid off, the company has struggled to contain them.

Amid the changes, Twitter’s top cybersecurity officer resigned in the past day and Twitter’s chief privacy officer and chief compliance officer have resigned in the past 24 hours, according to an internal Slack message from an attorney on the company’s privacy team. The slack message, obtained by POLITICO and first reported by The Verge, says all three company officials resigned yesterday.

The turmoil at Twitter brought a sharp warning from federal regulators on Thursday. A spokesperson for the Federal Trade Commission said, "We are tracking recent developments at Twitter with deep concern," adding that "[n]o CEO or company is above the law, and companies must follow our consent decrees." The FTC statement is an unusual move from a regulator that rarely issues statements ahead of enforcement actions.

Twitter is currently under two consent decrees from the FTC over past security and privacy violations. It was fined $150 million in May for violating its first consent decree from 2011, and the company remains under watch for any future violations. "Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them," the FTC spokesperson said on Thursday.

With regulators looking on, the platform itself remained besieged by fake accounts.

A “Joe Biden” account tweeted obscene jokes before being taken down; a fake Rudy Giulani offered to fight Alan Dershowitz. The fake account wave has also hit the sports world, where a “verified” account impersonating LeBron James asked for a trade.

Though these were removed, a separate set of accounts for political figures with verified blue checkmarks has emerged with the word “parody” in their handle, as a way to evade suspension. New owner Elon Musk had tweeted on Nov. 6 that accounts that don’t specify they are parodies will be suspended. A fake account for New York gubernatorial candidate “Lee Zeldin (parody),” for instance, seems to have met Musk’s standards and remained up Thursday morning.

Twitter’s changes are driven by a rapid decision by Musk to open the company’s “verified” status to any user willing to pay for a $8 monthly subscription service, known as Twitter Blue. The subscription is an effort to boost returns on the $44 billion he spent buying the platform; Musk also said the new service would help weed out spam and fake accounts.

So far it appears to be doing the opposite: The paid accounts automatically include a “blue check” verification badge, so users are spending the money and then setting up accounts to impersonate public figures, like this one pretending to be Tony Blair tweeting about the Iraq War.

Many of them have been quickly suspended, but not before the posts and screenshots go viral. Musk said that accounts engaging in “impersonation, trickery or deception” will be actively suspended.

The expanded Twitter Blue subscription service is intended to replace the legacy blue check marks that government officials, journalists and other notable figures had earned since 2009. Musk said he doesn’t like the current two-class system of those with and without blue checkmarks.

“It is leveling the playing field here. It will be less special obviously to have a checkmark, but I think this is a good thing,” Musk said in a Twitter Spaces event with advertisers yesterday. “I don’t like the lords and peasants situation where some people have blue checkmarks and some don’t.”

However, a top advertising firm had recommended its clients — which spend more than $40 billion globally — suspend ads on Twitter due to trust and safety concerns for their brands under Musk’s leadership.

Since 90 percent of Twitter’s revenue is driven by ads, Musk appears to be pushing the launch quickly to recoup lost ad money, as advertisers leave the platform over concerns about the recent proliferation of hate speech and conspiracy theories about Paul Pelosi from Musk himself.

Everyone — including advertisers — will have to pay for the new blue checkmark, the billionaire said.

Though Thursday's chaos is very much a product of Musk's abrupt changes to the platform, it also recalls Twitter's earlier days, before disinformation-policing became a public priority and companies put up stricter guardrails around fake accounts.

The name of Donald Trump's own account, @realdonaldtrump, evokes a time on Twitter when celebrity impersonations were common, and fake corporate accounts could even have their own fans.

Given the rise of deliberate disinformation, election monkeywrenching and Russian bots, however, the stakes around social media have grown since then, and experts worry that re-opening the doors to Twitter as a paid free-for-all could have civic repercussions far outside Twitter's newsfeed.