GP Short Notes # 680, 30 October 2022
On 28 October, Elon Musk finalised the USD 44 billion deal to purchase and make Twitter Inc a private company, six months after the takeover was announced in April. Musk tweeted: “The bird is freed.” In response, the European Union internal market commissioner said: “In Europe, the bird will fly by our rules.”
On the same day, Musk addressed advertisers on Twitter and justified his acquisition claiming that “it is important to have a common digital town square where a wide range of beliefs can be debated in a healthy manner, without resorting to violence.” He said the risk of social media splintering into far right and far left echo chambers is prevalent and that it could lead to more hate and divisions within society. However, he said this does not mean Twitter would be a “free-for-all hellscape, where anything can be said with no consequences.”
On the same day, media houses, including CNBC and Associated Press, quoted sources who said that after finalising the deal, Musk fired Twitter CEO Parag Agrawal, CFO Ned Segal and legal affairs head Vijaya Gadde. BBC quoted Twitter co-founder Biz Stone’s tweets thanking the three for their “collective contribution to Twitter.”
What is the background?
First, the long-drawn acquisition. In April, Musk became the largest shareholder of Twitter after acquiring a nine per cent stake. He announced his offer to buy Twitter for USD 44 billion and privatise it. In May, raising concerns over fake and bot accounts, Musk put the acquisition on hold. He maintained that Twitter neither addressed the problem of spam accounts nor did it provide him with information regarding the same. Following Musk’s threat to withdraw the acquisition in June, Twitter sued him and called on him to adhere to the deal. In early October, the judge delayed the trial against Musk until November and asked both sides to reach an agreement by 28 October.
Second, Twitter and Musk’s free speech agenda. Even prior to his plans to purchase Twitter, Musk had been critical of the social media platform and called for it to be made a space for free speech and uphold democratic rights. Musk also criticised Twitter’s content moderation and suspension of accounts, including that of former US President Donald Trump, wherein he believed that the suspension was morally wrong and “foolish in the extreme.” Often, Musk has hinted at restoring such accounts that were suspended for spreading hate and misinformation.
Third, Musk and Twitter’s responses. Relations between Musk and Twitter have seen a drastic change in the past six months. After Musk became the largest shareholder in April, Twitter offered him a seat on the company board, believing he would be of “great value.” However, following Musk’s concerns about the bots and his threat to withdraw the deal, Twitter accused him of breaching the agreement. Despite multiple attempts to defend its policy on spam accounts, Twitter failed to convince Musk of its policies, leading to further differences between the two.
Fourth, pre-deal uncertainties about Musk’s plans. Prior to finalising the deal, in early October, The Washington Post reported that Musk plans to lay off 75 per cent of Twitter employees and bring down the number from 7,500 to 2,000 employees. Musk also hinted at a content moderation body and also said that acquiring Twitter paves the way to create another app for shopping, ride-sharing, food delivery and the like. However, there has not been any clarity on whether or how Musk would implement the above.
What does it mean?
First, with the acquisition finalised, Twitter will now have to navigate through ensuring free speech and addressing extremist and hate content. Twitter has always been a key platform for political debates and discussions, unlike other social media platforms like Meta, which began as a space for sharing personal and recreational activities. Twitter served as a safe space to voice out one’s opinion but gradually became a space for misinformation and extremists from either political sides to insult, threaten and intimidate those with opposing views.
Second, Musk’s views on free speech have sparked debates on how free free speech should be. With responses like that of the EU, questions on who will regulate content, whether users should decide when and where to set limits or should external bodies should be surveilling your online presence remain.
Third, Musk’s attempt to attract advertisers signals that he could be planning on generating ad revenue, which has remained limited on Twitter compared to other platforms like Meta. However, as The Washington Post explains, advertisers are cautious about their ads appearing alongside hate content. Therefore, to win the confidence of advertisers, Musk would have to assure them and ensure that Twitter would be free of hate content.