Elon Musk Seems Really, Deeply Committed To Making Sure The FTC Has More To Investigate

from the everything's-going-just-great dept

From very early on in Elon Musk’s ownership of exTwitter a few things became clear regarding his understanding of the FTC. First, he clearly had no idea that the company has a consent decree with the FTC (the kind of thing you learn about during due diligence, which he waived in the purchasing process) and once he learned about it, he assumed he could just ignore it.

Currently, Musk is fighting with the FTC to try to stymie their investigation, claiming (ridiculously) that the FTC’s consent decree doesn’t really apply to him and also that the current investigation is politically motivated, and not because he’s been publicly ignoring everything the company agreed to in the latest version of the consent decree. In response, the US government has had to point out that there are all sorts of reasons why this investigation is happening because Musk continually seems to put user data at risk, with little concern about the impact of his action (which is par for the course for Musk, who seems to assume that putting others at risk is the best way to do business).

Of course, now there’s one more thing for the FTC to investigate. Last week, people started noticing that there was a new format of ads on exTwitter, and they appear to violate some fairly basic FTC guidelines regarding making sure users know they’re seeing sponsored content. Traditional exTwitter ads look and act more or less like regular tweets, but have a notification that they are sponsored ads or “promoted” content. You can still respond to them, retweet them, or even block the user.

However, the new ad units… have none of that.

Multiple X users have reached out to Mashable over the past few days to report seeing a new type of ad in their For You feed that they had not previously come across on the platform. These new X ads don’t allow users to like or retweet the ad posts. In fact, the new ad format also doesn’t disclose who is behind the ad or that it is even an advertisement at all.

Mashable has confirmed this ad format with numerous users from across X and have seen a variety of different ads running this bizarre new format that just consists of written copy text, a photo, and a fake avatar that’s sole purpose is to make the ad look like an organically posted tweet. 

And exTwitter is certainly allowed to remove the ability to treat ads like tweets, and take away the blocking/replying/etc features. But what they really can’t do (because no one can do this without violating some FTC rules) is hide the fact that they’re ads.

This isn’t some new thing either. The FTC’s power to go after unfair and deceptive practices has been in place for ages, and they’ve made it clear that this applies to the lack of disclosures for digital ads many, many, many times.

It sounds like these ads are not being run through exTwitter’s usual ad engine, but rather the company signed up with a chumbox provider. If you’re unfamiliar with chumboxes, we’ve written about them before (to tell you why Techdirt won’t use them, even though the companies reach out to us daily, and we’ve heard from other publishers that they’re actually surprisingly lucrative). They’re often seen at the end of news articles and promote extremely clickbaity headlines saying things like “the secret energy companies don’t want you to know” or “the one trick to losing weight.”

They’re awful.

And now they’re on exTwitter.

And they’re appearing without the required disclosures.

Given the entirely new format, one hopes that the lack of disclosure is simply an oversight (which is the most likely situation), but that doesn’t necessarily mean the FTC will simply give them a pass for it, as it’s still likely to be considered deceptive.

It seems clear that exTwitter is getting pretty desperate for ad revenue since its own ad revenue is in free fall, almost entirely because of ridiculous actions by Elon. In the past, Elon insisted that he hated ads (which, you know, is not a bad thing), and he wanted to diversify exTwitter’s revenue (which is also a good idea). But then he YOLOd the whole process by pissing off a huge percentage of the company’s advertisers while his grand revenue scheme to charge users has been a complete and utter disaster.

Also, just before the chumboxes showed up, exTwitter also cut a deal with Google to have Google sell some of its ad space as well. Basically, Elon has dismantled what had been a decent internal ads system, driving away 60% of the revenue almost entirely because of the terrible shit he did that puts brands at risk, and has been forced to sign up with the bottom feeder ad companies to try to generate something (anything) to bring in some ad revenue (while only making the experience of using the platform worse).

And whatever they bring in may just end up going to lawyers who will be needed to respond to the FTC’s investigation of how these ads are presented.

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Companies: twitter, x

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Comments on “Elon Musk Seems Really, Deeply Committed To Making Sure The FTC Has More To Investigate”

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Anonymous Coward says:

Re:

Why do you feel the actions of the chief technology officer of a $44 billion dollar tech company aren’t newsworthy?

You’ve called it a hit piece….are there factual errors? Or do you think opinion based off disclosed public reporting constitutes a ‘hit piece’?

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bhull242 (profile) says:

Re: Re: Re:

If you don’t like Mike’s articles about Musk, don’t read them. It’s not like you can’t figure out the topic and author of each article without actually clicking to read any of it. If all you’re here for is KB’s stuff, the solution is simple: only read stuff with KB’s name in the byline.

That you expect a tech-focused news blog to not comment on Elon Musk’s handling of ExTwitter is just absurd.

Oh, and as for this:

a company he now hates because its chief censor was fired

You clearly haven’t been paying attention. He doesn’t hate Twitter now; he just thinks the leadership is incompetent, and the platform is less functional for his own purposes for a social media site. That’s not hate. And that position dates back to before the “chief censor” was fired, it was never the only reason for the problems, and if it was only that one guy who got fired, that wouldn’t have even been that big of a problem.

Violet Aubergine (profile) says:

Re:

Surprise, I’m complaining about something I have complete control over–it’s 100% your fault I click on articles and visit sites that frustrate me by having beliefs different than those ordained by my mighty and appropriately white God: Elon Musk!1!!! Tremble at his eleventy-twelve dimensional thinking plebians!! I have thoroughly pwned you and am totally on fleek now, suck it hoser.

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James Burkhardt (profile) says:

Re: Re:

Musk has seemingly settled back rent with smaller locations.
https://www.bizjournals.com/sanfrancisco/news/2023/04/10/s-f-landlord-twitter-lawsuit-rent-dismissed.html
(if you just read the headline, this is about a smaller building, not the headquarters.)

Probably relying on the crumbling commercial real estate market to slow the response of the landlords at the bigger locations that might be hard to fill (The headquarters is seemingly still outstanding, for instance).

David says:

Re:

What do you mean, “wasted”? He paid $44bn for the largest megaphone available and got it. It didn’t come with an extended warranty and it turns out that operating it underwater isn’t good for its indefinite existence, but it still is harvesting more derision for his collected and individualized wisdoms than he could readily achieve on Truth Social (say).

And it certainly appears like a more impressive approach at driving a company into the ground than his “Boring Company”.

Anonymous Coward says:

Re:

he isn’t as smart as he thinks he is.

This whole thing is nothing more than Elmo angling for a tax write-off, possibly the largest one to ever be recorded at the IRS. And the size of it says that he’ll be able to continue taking parts of that write-off for decades to come.

At least his tax lawyer says that this is a smart move, so who knows….

p.s. Don’t anyone tell Elmo that his tax lawyer is a graduate of the Wharton School of Business – that’d spoil the fun.

That One Guy (profile) says:

If it's less than what you gained it's not a fine it's a cost of business

To be fair were I in Elon’s shoes and equally as spiteful/petty/sociopathic I wouldn’t really care about the FTC either, even if they get around to fining him it’s not like the amount is even going to come close to a notable percentage of whatever money he’s saving/making from flaunting the rules.

Anonymous Coward says:

Re:

Elon needs to care about the FTC even less than bad cops need to care about the courts. Not only do we need precedent on the exact behavior at issue, whoever the FTC is trying to punish must be the one to have been caught doing it before. The first time’s always “you’ve been breaking the law for years, and your punishment is that you need to promise us you’ll stop doing that”.

Somewhat Less Anonymous Coward (profile) says:

It could always get wrose

A few days ago, Musk Xeeted:

Next, we’ll remove all the action buttons with their superfluous interaction counts from the >main timeline. Just the view count will show, unless your tap into a post.

This will greatly improve readability.

First, this will make regular Xeets look like those undisclosed ads. Second, this will make scrolling past the unpopular stuff impossible. Third, it’ll make harder to check if Xitter removed your likes from Xeets the great freeze peach absolutist doesn’t like, which is something that they were caught doing recently for something called “Vatnik Soup” about Musk, which produced a healthy Streisand effect. Fourth, views, unlike replies, reXeets, and likes, don’t generate an easily accessible record of who interacted with what, making it a much more easily faked number.

In short, Musk does everything he can to destroy any sense of truth someone hooked on his hellscape of a platform might still have. The misinformation, engagement farming and botnets are all by design, and so is the promotion of the worst people. Musk does this intentionally, while lying and gaslighting.

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Ninja says:

It all made sense to me when I found out he stated multiple times that Twitter and its “wokeness” are responsible for making his daughter a trans person. Evaluating this whole mess from the perspective that Musk hates Twitter and wants to destroy is illuminating.

I do think he just wanted to destroy the brand and turn it into a nazi cesspool, the financial woes are a collateral he didn’t anticipate. Because he’s dumb.

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