FTC considers setting aside or modifying $150 million privacy penalty against X

The Federal Trade Commission said Wednesday that it is considering modifying or setting aside a 2022 settlement order with what was then Twitter for using account security data to support targeted advertising.

Twitter, renamed X in 2023, filed a petition saying that the settlement terms are unfair because the order was issued against a company that “no longer exists,” the workers responsible for the scheme no longer work for X and the firm has since established a “world class” privacy and data protection program, according to an FTC call for public comment.

The tech giant was fined $150 million and prohibited from continuing to profit from what an FTC press release at the time called “deceptively collected data.”

Twitter came under new ownership in October 2022 when Elon Musk bought the company. 

X is also arguing that the order “no longer serves any valid regulatory purpose, imposing millions of dollars in needless costs to address obligations and protections already required by domestic and international privacy regimes and industry-recognized frameworks that X Corp. follows,” the press release said.

The tech giant holds that setting the order aside is in keeping with First Amendment principles and that changing or setting aside the order is “critical to advancing American leadership in artificial intelligence,” according to the press release.

The FTC has invited the public to comment on whether it should change or set aside the order. The public comment period ends July 2 after which the agency will decide whether to move forward with changes.

The May 2022 settlement order alleged that Twitter suggested users provide their phone numbers and email addresses to safeguard their accounts, but subsequently sold the data to advertisers seeking to target ads to specific consumers, earning large profits.

The FTC alleged that Twitter’s actions broke a 2011 order that barred the firm from deceiving the public about its privacy and security practices. 

“Twitter obtained data from users on the pretext of harnessing it for security purposes but then ended up also using the data to target users with ads," FTC Chair Lina Khan said in a statement at the time. "This practice affected more than 140 million Twitter users, while boosting Twitter’s primary source of revenue.”