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Toxic X users sabotage Community Notes that could derail disinfo, report says

community notes, disinformation, elon musk, misinformation, Policy, Twitter, us election, X / Mike M. / October 31, 2024

It’s easy for biased users to bury accurate Community Notes, report says.

What’s the point of recruiting hundreds of thousands of X users to fact-check misleading posts before they go viral if those users’ accurate Community Notes are never displayed?

That’s the question the Center for Countering Digital Hate (CCDH) is asking after digging through a million notes in a public X dataset to find out how many misleading claims spreading widely on X about the US election weren’t quickly fact-checked.

In a report, the CCDH flagged 283 misleading X posts fueling election disinformation spread this year that never displayed a Community Note. Of these, 74 percent were found to have accurate notes proposed but ultimately never displayed—apparently due to toxic X users gaming Community Notes to hide information they politically disagree with.

On X, Community Notes are only displayed if a broad spectrum of X users with diverse viewpoints agree that the post is “helpful.” But the CCDH found that it’s seemingly easy to hide an accurate note that challenges a user’s bias by simply refusing to rate it or downranking it into oblivion.

“The problem is that for a Community Note to be shown, it requires consensus, and on polarizing issues, that consensus is rarely reached,” the CCDH’s report said. “As a result, Community Notes fail precisely where they are needed most.”

Among the most-viewed misleading claims where X failed to add accurate notes were posts spreading lies that “welfare offices in 49 states are handing out voter registration applications to illegal aliens,” the Democratic party is importing voters, most states don’t require ID to vote, and both electronic and mail-in voting are “too risky.”

These unchecked claims were viewed by tens of millions of users, the CCDH found.

One false narrative—that Dems import voters—was amplified in a post from Elon Musk that got 51 million views. In the background, proposed notes sought to correct the disinformation by noting that “lawful permanent residents (green card holders)” cannot vote in US elections until they’re granted citizenship after living in the US for five years. But even these seemingly straightforward citations to government resources did not pass muster for users politically motivated to hide the note.

This appears to be a common pattern on X, the CCDH suggested, and Musk is seemingly a multiplier. In July, the CCDH reported that Musk’s misleading posts about the 2024 election in particular were viewed more than a billion times without any notes ever added.

The majority of the misleading claims in the CCDH’s report seemed to come from conservative users. But X also failed to check a claim that Donald Trump “is no longer eligible to run for president and must drop out of the race immediately.” Posts spreading that false claim got 1.4 million views, the CCDH reported, and that content moderation misstep could potentially have risked negatively impacting Trump’s voter turnout at a time when Musk is campaigning for Trump.

Musk has claimed that while Community Notes will probably never be “perfect,” the fact-checking effort aspires to “be by far the best source of truth on Earth.” The CCDH has alleged that, actually, “most Community Notes are never seen by users, allowing misinformation to spread unchecked.”

Even X’s own numbers on notes seem low

On the Community Notes X account, X acknowledges that “speed is key to notes’ effectiveness—the faster they appear, the more people see them, and the greater effect they have.”

On the day before the CCDH report dropped, X announced that “lightning notes” have been introduced to deliver fact-checks in as little as 15 minutes after a misleading post is written.

“Ludicrously fast? Now reality!” X proclaimed.

Currently, more than 800,000 X users contribute to Community Notes, and with the lightning notes update, X can calculate their scores more quickly. That efficiency, X said, will either spike the amount of content removals or reduce sharing of false or misleading posts.

But while X insists Community Notes are working faster than ever to reduce harmful content spreading, the number of rapidly noted posts that X reports seems low. On a platform with an estimated 429 million daily active users worldwide, only about 400 notes were displayed within the past two weeks in less than an hour of a post going live. For notes that took longer—which the CCDH suggested is the majority if the fact-check is on a controversial topic—only about 60 more notes were displayed in more than an hour.

In July, an international NGO that monitors human rights abuses and corruption, Global Witness, found 45 “bot-like accounts that collectively produced around 610,000 posts” in a two-month period this summer on X, “amplifying racist and sexualized abuse, conspiracy theories, and climate disinformation” ahead of the UK general election.

Those accounts “posted prolifically during the UK general election,” then moved “to rapidly respond to emerging new topics amplifying divisive content,” including the US presidential race.

The CCDH reported that even when misleading posts get fact-checked, the original posts on average are viewed 13 times more than the note is seen, suggesting the majority of damage is done in the time before the note is posted.

Of course, content moderators are often called out for moving too slowly to remove harmful content, a Bloomberg opinion piece praising Community Notes earlier this year noted. That piece pointed to studies showing that “crowdsourcing worked just as well” as professional fact checkers “when assessing the accuracy of news stories,” concluding that “it may be impossible for any social media company to keep up, which is why it’s important to explore other approaches.”

X has said that it’s “common to see Community Notes appearing days faster than traditional fact checks,” while promising that more changes are coming to get notes ranked as “helpful” more quickly.

X risks becoming an echo chamber, data shows

Data that the market intelligence firm Sensor Tower recently shared with Ars offers a potential clue as to why the CCDH is seeing so many accurate notes that are never voted as “helpful.”

According to Sensor Tower’s estimates, global daily active users on X are down by 28 percent in September 2024, compared to October 2022 when Elon Musk took over Twitter. While many users have fled the platform, those who remained are seemingly more engaged than ever—with global engagement up by 8 percent in the same time period. (Rivals like TikTok and Facebook saw much lower growth, up by 3 and 1 percent, respectively.)

This paints a picture of X risking becoming an echo chamber, as loyal users engage more with the platform where misleading posts can seemingly easily go unchecked and buried notes potentially warp discussion in Musk’s “digital town square.”

When Musk initially bought Twitter, one of his earliest moves was to make drastic cuts to the trust and safety teams chiefly responsible for content-moderation decisions. He then expanded the role of Twitter’s Community Notes to substitute for trust and safety team efforts, where before Community Notes was viewed as merely complementary to broader monitoring.

The CCDH says that was a mistake and that the best way to ensure that X is safe for users is to build back X’s trust and safety teams.

“Our social media feeds have no neutral ‘town square’ for rational debate,” the CCDH report said. “In reality, it is messy, complicated, and opaque rules and systems make it impossible for all voices to be heard. Without checks and balances, proper oversight, and well-resourced trust and safety teams in place, X cannot rely on Community Notes to keep X safe.”

More transparency is needed on Community Notes

X and the CCDH have long clashed, with X unsuccessfully suing to seemingly silence the CCDH’s reporting on hate speech on X, which X claimed caused tens of millions in advertising losses. During that legal battle, the CCDH called Musk a “thin-skinned tyrant” who could not tolerate independent research on his platform. And a federal judge agreed that X was clearly suing to “punish” and censor the CCDH, dismissing X’s lawsuit last March.

Since then, the CCDH has resumed its reporting on X. In the most recent report, the CCDH urged that X needed to be more transparent about Community Notes, arguing that “researchers must be able to freely, without intimidation, study how disinformation and unchecked claims spread across platforms.”

The research group also recommended remedies, including continuing to advise that advertisers “evaluate whether their budgets are funding the misleading election claims identified in this report.”

That could lead brands to continue withholding spending on X, which is seemingly already happening. Sensor Tower estimated that “72 out of the top 100 spending US advertisers on X from October 2022 have ceased spending on the platform as of September 2024.” And compared to the first half of 2022, X’s ad revenue from the top 100 advertisers during the first half of 2024 was down 68 percent.

Most drastically, the CCDH recommended that US lawmakers reform Section 230 of the Communications Decency Act “to provide an avenue for accountability” by mandating risk assessments of social media platforms. That would “expose the risk posed by disinformation” and enable lawmakers to “prescribe possible mitigation measures including a comprehensive moderation strategy.”

Globally, the CCDH noted, some regulators have the power to investigate the claims in the CCDH’s report, including the European Commission under the Digital Services Act and the UK’s Ofcom under the Online Safety Act.

“X and social media companies as an industry have been able to avoid taking responsibility,” the CCDH’s report said, offering only “unreliable self-regulation.” Apps like X “thus invent inadequate systems like Community Notes because there is no legal mechanism to hold them accountable for their harms,” the CCDH’s report warned.

Perhaps Musk will be open to the CCDH’s suggestions. In the past, Musk has said that “suggestions for improving Community Notes are… always… much appreciated.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Toxic X users sabotage Community Notes that could derail disinfo, report says Read More »

X Payments delayed after Musk’s X weirdly withdrew application for NY license

consumer financial protection bureau, elon musk, fintech, Policy, Twitter, X, x corp, x payments / Beth Washington / October 25, 2024

Will X Payments launch this year? Outlook not so good.

Credit: Aurich Lawson | Getty Images/Bloomberg

This October, many Elon Musk believers are wondering, where is X Payments?

Last year, Musk claimed in a Spaces conversation that he “would be surprised” if it took longer than mid-2024 to roll out the payments feature that he believes is crucial to transforming the social media app formerly known as Twitter into an everything app.

“It would blow my mind if we don’t have that rolled out by the end of next year,” Musk said around this time last year, clarifying that “when I say payments, I actually mean someone’s entire financial life. If it involves money, it’ll be on our platform. Money or securities or whatever. So, it’s not just like ‘send $20 to my friend.’ I’m talking about, like, you won’t need a bank account.”

Echoing Musk as recently as June, X CEO Linda Yaccarino was hyping the US release of X Payments as imminent. But it has been months without another peep from X leadership, and Ars recently confirmed that X took a curious step in April that suggests the payments feature may be delayed indefinitely.

During the Spaces conversation last December with Ark Invest CEO Cathie Wood, Musk discussed X’s bid to secure money transmitter licenses in all 50 states, noting that it would be “irrelevant” to launch X Payments without California and New York licenses.

Since then, X has made a decent amount of progress, picking up money transmitter licenses in 38 states, including a critical license in California.

But approvals in New York were reportedly stalled for months after a New York City law firm, now called Walden Macht Haran & Williams (WMHW), sent an open letter to attorneys general and banking commissioners in all 50 states in September 2023, urging that X be deemed “unfit” for a money transmitter license.

WMHW had filed a lawsuit alleging that Twitter—before Musk acquired it—”acted at the direction of the Kingdom of Saudi Arabia (KSA) in furtherance of KSA’s long-running campaign of transnational repression.”

That campaign led to the murder of Washington Post correspondent Jamal Khashoggi and the “imprisonment of Abdulrahman Al-Sadhan, a human rights worker and anonymous Twitter user, whose confidential user data—leaked by Twitter’s employees—precipitated and enabled this barbarity,” the letter alleged. And when Musk took over the platform, he only deepened the app’s KSA ties further when he “invited KSA to convert its shares in Twitter into a financial stake during his private take-over of the platform,” the letter said.

Rather than grant X money transmitter licenses, WMHW recommended that attorneys general and banking commissioners use X’s money transmitter licenses as an excuse to investigate the allegations and demystify the app’s allegedly dangerous KSA ties.

Apparently, X either did not like the heat or decided to rethink its X Payments strategy, because the New York Department of Financial Services provided new information to Ars this week confirming that X withdrew its money transmitter license in New York in April 2024.

The department also confirmed that X has not since resubmitted the application.

However, WMHW this month voluntarily dismissed its client’s lawsuit against X and declined to comment on whether the open letter seemingly worked to block X Payments’ launch. It seems possible that X may leverage that court win to eventually resubmit its application for a New York license, but Ars could not confirm if X has any plans to resubmit any time soon.

An X spokesperson answered Ars’ request to comment (which rarely happens) but declined to provide an update on any new timeline for X Payments’ launch.

X Payments unlikely to launch without New York

It seems possible that X has gone silent on X Payments because there is no timeline currently.

A global payments expert for tech consultancy Capco, Daniela Hawkins, told Ars that, as an outsider going just off a “gut check,” if X has withdrawn its application from New York—with “New York obviously being such a major metropolitan area… that would seem to be a barrier to entry into the payments market.”

X could launch X Payments without New York and other states, but Hawkins said users might be confused about where they can and cannot send money. Hawkins thinks it’s unlikely that Musk—who co-founded PayPal and has wanted to launch his own payments app since—would roll out X Payments “half-assed.”

Basically, if X pushed through with the launch, users could accept and send funds just like they can using any other payments app, but without licenses in all states, X users could only send money to people located in states where X has licenses. Hawkins said that inconsistency could deter popular use of the payments feature because “it’s too difficult for the consumer to understand.”

“If you roll it out with handcuffs on it, it’s gonna have a bumpy launch,” Hawkins said. “So why would you do that?”

Going that route, X seemingly risks users ditching X to complete payments on apps where every transaction reliably goes through, Hawkins suggested.

“They’re gonna be like, ‘Wait, I don’t know where this Etsy shop is located, I don’t care,” Hawkins said, noting, “that’s just a bad user experience.”

More regulations on payment apps coming

Last year, Hawkins told Ars that X faced an “uphill battle” launching X Payments, partly due to intensifying regulations on the financial services industry that are increasingly pulling payments apps into regulations typically focused on regulating traditional banking services.

Just days ago, the Consumer Financial Protection Bureau (CFPB) issued a final rule requiring banks, credit unions, and online payments services to make it easy and safe for customers to port banking data to a new financial service provider.

The CFPB argues customers need to have control over their data, but Hawkins told Ars that banks considered the controversial rule potentially allowing customers to transfer sensitive data in one click to be a “freaking nightmare.”

Banks warned of fraud risks and privacy concerns about sharing sensitive data with third parties that could profit off that data, possibly heightening risks of data breaches. Compliance isn’t required until 2026, but already the rule is being challenged in court, Hawkins said.

In one way, the new rule could be good for X, Hawkins told Ars, as the app could quickly gain access to valuable financial data if X users did switch from, say, using a bank to managing money through X Payments. Then X wouldn’t have “to go build all this data from scratch” to make X Payments profitable, Hawkins suggested.

But in another way, the rule could put X in “an interesting spot” where the app is required to share its user data with third parties in a way that could potentially have Musk second-guessing whether X would even benefit from becoming a bank in the way that he initially planned. Banks have protested the CFPB rule as allowing third parties to profit off data that they can’t, and Musk’s whole X Payments plan appears to revolve around profiting off users’ financial data.

“If somebody wants to pay with X, now X has to transfer the data to the third party, and they may not want to do that, because obviously, data is power, right?” Hawkins said.

Not a bank

But if Musk is suddenly shy about turning X into a bank, it comes at a time when banks are less likely to partner with social media apps for potentially risky new payment ventures.

Hawkins noted that banks have struggled to roll out new payment capabilities as easily as fintechs can, and that struggle inspired longtime partnerships between banks and tech companies that have recently begun to collapse. On Wednesday, the CFPB ordered Apple and Goldman Sachs to pay more than $89 million over “illegally mishandled transaction disputes.” Now Goldman Sachs is banned from offering new credit cards until it can be trusted to comply with laws. And Wells Fargo recently bowed out of PayPal and Square partnerships, citing compliance costs, The Information reported this week.

For Musk, who has notoriously butted heads with his trust and safety compliance teams at X, working with regulators on launching X Payments might, at this moment, seem less attractive.

“It’s one thing to want to move money on a payments app,” Hawkins told Ars. “It’s another thing to be a bank. Like he’s gonna hate being a bank.”

Earlier this year, the CFPB risked being dismantled after the financial services associations alleged its funding scheme was improper. But shortly after X withdrew from New York, the Supreme Court ruled in May that nothing was amiss with CFPB’s funding, despite Justice Samuel Alito warning in his dissent that SCOTUS’s decision meant the CFPB could “bankroll its own agenda without any congressional control or oversight,” Reuters reported.

In this strained environment, X could potentially overcome all obstacles and become a bank and fill a gap left by banks beginning to be spooked by fintech deals, Hawkins said, insisting that she would never bet against Musk, whose successes are many. But granting money transmitter licenses helps states prevent financial crimes through compliance requirements, and X quietly pulling out of New York earlier this year suggests that X may not be prepared to take on regulatory scrutiny at this current moment.

The last major development regarding X Payments came in August. It didn’t come from X leadership but from an app researcher, Nima Owji, who posted on X that “X Payments is coming soon!” Digging in X’s code, Owji apparently found references to new payments features enabling “transactions, balance, and transfer,” as well as a “Payments” button seemingly ready to be added to X’s bookmarks tab, TechCrunch reported.

But for Musk fans awaiting an official update, X executives’ silence on X Payments has been deafening since June, when Yaccarino forecast the feature would be coming soon, despite knowing that X had withdrawn its application for a money transmitter license from New York.

X continuing to hype the payments service without publicly disclosing the apparent speed bump in New York “doesn’t feel very honest,” Hawkins told Ars.

X still losing users, advertisers

It has been two years since Musk took over Twitter, soon after revealing that he intended to use Twitter’s userbase as the launchpad for an everything app that would be so engaging and useful that it would be the only app that anyone would ever need online.

Market intelligence firm Sensor Tower shared data with Ars showing that, compared to October 2022, when Musk bought Twitter, global daily average users on X were down 28 percent in September 2024.

Sensor Tower attributed part of the recent decline to X’s ban in Brazil driving out users but noted that overall, users “were down significantly compared to the pre-acquisition period,” as now-X “contended with a rise of controversial content and technical issues.”

While the decline in users could hurt Musk’s ambitions to launch a hugely popular payments app nested in X, the spike in offensive content has notably alienated advertisers who traditionally are X’s dominant source of revenue. And in lockstep with X’s decline in users, major brands have continued to shed the social app in 2024, Sensor Tower told Ars.

Last November, ad agencies flagged then-Twitter brand safety concerns, including GroupM marking Twitter “high risk” and Interpublic Group recommending that advertisers pause spending. By the end of last year, Sensor Tower reported that “of the company’s top 100 US advertisers in the days before” Musk purchased the platform, “only 50 were still there as of October 2023.”

The picture is even bleaker as X approaches the end of 2024, Sensor Tower’s data shows, estimating that “72 out of the top 100 spending US advertisers on X from October 2022 have ceased spending on the platform as of September 2024.” Compared to the first half of 2022, prior to Musk’s acquisition, X’s ad revenue from top 100 advertisers during the first half of 2024 was down 68 percent, Sensor Tower estimated.

Since becoming X’s CEO, Yaccarino has appeared most vocal about driving growth in X’s video services, allowing advertisers to avoid toxic content on the app by only running their ads alongside pre-approved creators’ content. In particular, Yaccarino has hyped X’s partnership with the NFL, announcing today on X that the partnership will be expanded.

That NFL partnership has seemingly helped X grow its ad revenue, with Sensor Tower estimating that “four out of the top 10 spending US advertisers on X in September 2024 were tied to sports or sports betting, likely in an attempt to capitalize on heightened consumer interest around the beginning of the NFL season.”

But overall, X’s revenue has not recovered in 2024, with Fidelity recently estimating that X is worth 80 percent less than when Musk bought the app, CNN reported.

Instead of working with advertisers, Musk went on the attack, suing the World Federation of Advertisers in August over what he calls an “illegal boycott” of X. But X’s spokesperson, Michael Abboud, linked Ars to an X post suggesting that X has held discussions with big brands about a brand safety solution.

“X is pleased to have reached an agreement with Unilever and to continue our partnership with them on the platform,” X’s post said. “Today’s news is the first part of the ecosystem-wide solution and we look forward to more resolution across the industry.”

Unilever did not respond to Ars’ request to comment on X’s proposed solution.

Musk’s strategy for monetizing X has always been to reduce reliance on advertising, but his everything app pursuit does not seem to be coming together as quickly as planned to make up for lost ad revenue. He initially projected that it would take three to five years to roll out all the features turning X into an everything app. But two years in, launching the core product experts say is critical to the success of everything apps like WeChat—X Payments—seems to be the major obstacle that Musk faces to manage the app without relying nearly entirely on advertisers’ meddling ideas regarding brand safety.

Hawkins said that Musk perhaps did not make a “great bet” when buying Twitter as the foundation of his everything app.

X “has continued to trend down in terms of profitability and users, and I’m sure he’s considering X Payments to be maybe a Hail Mary to try to pull X back into the black,” Hawkins said.

But by trying to disrupt the financial industry, Musk perhaps rashly “picked a highly regulated capability to bet the farm on,” Hawkins suggested.

As it stands now, it’s currently unclear when or if X Payments will launch, as the feed on the X account for Payments remains pointedly blank and Musk has not indicated whether X Payments can possibly launch without New York.

“I think it’s very telling he pulled out his application from New York, when he had even said in the media, there’s no point in doing this if I don’t have New York,” Hawkins said.

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

X Payments delayed after Musk’s X weirdly withdrew application for NY license Read More »

X’s depressing ad revenue helps Musk avoid EU’s strictest antitrust law

Antitrust law, Digital Markets Act, dma, elon musk, European Union, Policy, social media app, Twitter, X, x corp / 9u50fv / October 16, 2024

Following an investigation, Elon Musk’s X has won its fight to avoid gatekeeper status under the European Union’s strict competition law, the Digital Markets Act (DMA).

On Wednesday, the European Commission (EC) announced that “X does indeed not qualify as a gatekeeper in relation to its online social networking service, given that the investigation revealed that X is not an important gateway for business users to reach end users.”

Since March, X had strongly opposed the gatekeeper designation by arguing that although X connects advertisers to more than 45 million monthly users, it does not have a “significant impact” on the EU’s internal market, a case filing showed.

A gatekeeper “is presumed to have a significant impact on the internal market where it achieves an annual Union turnover equal to or above EUR 7.5 billion in each of the last three financial years,” the case filing said. But X submitted evidence showing that its Union turnover was less than that in 2022, the same year that Musk took over Twitter and began alienating advertisers by posting their ads next to extremists’ tweets.

Throughout Musk’s reign at Twitter/X, the social networking company told the EC, both advertising revenue and users have steadily declined in the EU. In particular, “X Ads has a too small and decreasing scale in terms of share of advertising spend in the Union to constitute an important gateway in the market for online advertising,” X argued, further noting that X had a “lack of platform power” to change that anytime soon.

“In the last 15 months, X Ads has faced a decline in number of advertising business users, as well as a decline in pricing,” X argued.

X’s depressing ad revenue helps Musk avoid EU’s strictest antitrust law Read More »

Ex-Twitter execs push for $200M severance as Elon Musk runs X into ground

elon musk, Policy, severance, Twitter, wrongful termination, X, x corp / Mike M. / October 11, 2024

Musk’s battle with former Twitter execs intensifies as X value reaches new low.

Former Twitter executives, including former CEO Parag Agrawal, are urging a court to open discovery in a dispute over severance and other benefits they allege they were wrongfully denied after Elon Musk took over Twitter in 2022.

According to the former executives, they’ve been blocked for seven months from accessing key documents proving they’re owed roughly $200 million under severance agreements that they say Musk willfully tried to avoid paying in retaliation for executives forcing him to close the Twitter deal. And now, as X’s value tanks lower than ever—reportedly worth 80 percent less than when Musk bought it—the ex-Twitter leaders fear their severance claims “may be compromised” by Musk’s alleged “mismanagement of X,” their court filing said.

The potential for X’s revenue loss to impact severance claims appears to go beyond just the former Twitter executives’ dispute. According to their complaint, “there are also thousands of non-executive former employees whom Musk terminated and is now refusing to pay severance and other benefits” and who have “sued in droves.”

In some of these other severance suits, executives claimed in their motion to open discovery, X appears to be operating more transparently, allowing discovery to proceed beyond what has been possible in the executives’ suit.

But Musk allegedly has “special ire” for Agrawal and other executives who helped push through the Twitter buyout that he tried to wriggle out of, executives claimed. And seemingly because of his alleged anger, X has “only narrowed the discovery” ever since the court approved a stay pending a ruling on X’s motion to drop one of the executives’ five claims. According to the executives, the court only approved the stay of discovery because it was expecting to rule on the motion to dismiss quickly, but after a hearing on that matter was vacated, the stay has remained, helping X’s alleged goal to prolong the litigation.

To get the litigation back on track for a speedier resolution before Musk runs X into the ground, the executives on Thursday asked the court to approve discovery on all claims except the claim disputed in the motion to dismiss.

“Discovery on those topics is inevitable, and there is no reason to further delay,” the executives argued.

The executives have requested that the court open discovery at a hearing scheduled for November 15 to prevent further delays that they fear could harm their severance claims.

Neither X nor a lawyer for the former Twitter executives, David Anderson, could immediately be reached for comment.

X’s fight to avoid severance payments

In their complaint, the former Twitter executives—including Agrawal as well as former Chief Financial Officer Ned Segal, former Chief Legal Officer Vijaya Gadde, and former general counsel Sean Edgett—alleged that Musk planned to deny their severance to make them pay for extra costs that they approved that clinched the Twitter deal.

They claimed that Musk told his official biographer, Walter Isaacson, that he would “hunt every single one of” them “till the day they die,” vowing “a lifetime of revenge.” Musk supposedly even “bragged” to Isaacson about “specifically how he planned to cheat Twitter’s executives out of their severance benefits in order to save himself $200 million.”

Under their severance agreements, the executives could only be denied benefits if terminated for “cause” under specific conditions, they said, none of which allegedly applied to their abrupt firings the second the merger agreement was signed.

“‘Cause’ under the severance plans is limited to extremely narrow circumstances, such as being convicted of a felony or committing ‘gross negligence’ or ‘willful misconduct,'” their complaint noted.

Musk attempted to “manufacture” “ever-changing theories of cause,” they claimed, partly by claiming that “success” fees paid to the law firm that defeated Musk’s suit attempting to go back on the deal constituted “gross negligence” or “willful misconduct.”

According to Musk’s motion to dismiss, the former executives tried to “saddle Twitter, and by extension the many investors who acquired it, with exorbitant legal expenses by forcing approximately $100 million in gratuitous payments to certain law firms in the final hours before the Twitter acquisition closed.” Musk had a huge problem with this, the motion to dismiss said, because the fees were paid despite his objections.

On top of that, Musk considered it “gross negligence” or “willful misconduct” that the executives allegedly paid out retention bonuses that Musk also opposed. And perhaps even more egregiously, they allowed new employees to jump onto severance plans shortly before the acquisition, which “generally” increased the “severance benefits available to these individuals by more than $50 million dollars,” Musk’s motion to dismiss said.

Musk was particularly frustrated by the addition of one employee who allegedly “already decided to terminate and another who was allowed to add herself to one of the Plans—a naked conflict of interest that increased her potential compensation by approximately $15 million.”

But former Twitter executives said they consulted with the board to approve the law firm fees, defending their business decisions as “in the best interest of the company,” not “Musk’s whims.”

“On the morning” Musk acquired Twitter, “the Company’s full Board met,” the executives’ complaint said. “One of the directors noted that it was the largest stockholder value creation by a legal team that he had ever seen. The full Board deliberated and decided to approve the fees.”

Further, they pointed out, “the lion’s share” of those legal fees “was necessitated only by Musk’s improper refusal to close a transaction to which he was contractually bound.”

“If Musk felt that the attorneys’ fees payments, or any other payments, were improper, his remedy was to seek to terminate the deal—not to withhold executives’ severance payments,” their complaint said.

Reimbursement or reinstatement may be sought

To force Musk’s hand, executives have been asking X to share documents, including documents they either created or received while working out the Twitter buyout. But X has delayed production—sometimes curiously claiming that documents are confidential even when executives authored the documents or they’ve been publicly filed in other severance disputes, executives alleged.

Executives have called Musk’s denial of severance “a pointless effort that would not withstand legal scrutiny,” but so far discovery in their lawsuit has not even technically begun. While X has handed over incomplete submissions from its administrative process denying the severance claims, in some cases, X has “entirely refused” to produce documents, they claimed.

They’re hoping once fact-finding concludes that the court will agree that severance benefits are due. That potentially includes stock vested at the price of Twitter on the day that Musk acquired it, $44 billion—a far cry from the $9 billion that X is estimated to be valued at today.

In a filing opposing Musk’s motion to dismiss, the former executives noted that they’re not required to elect their remedies at this stage of the litigation. While their complaint alleged they’re owed vested stock at the acquisition value of $44 billion, their other filing suggested that “reinstatement is also an available remedy.”

Neither option would likely appeal to Musk, who appears determined to fight all severance disputes while scrambling for nearly two years to reverse X’s steady revenue loss.

Since his firing, Agrawal has won at least one of his legal battles with Musk, forcing X to reimburse him for $1.1 million in legal fees. But Musk has largely avoided paying severance as lawsuits pile up, and Agrawal is allegedly owed the most, with his severance package valued at $57 million.

Last fall, X agreed to negotiate with thousands of laid-off employees, but those talks fell through without a settlement reached. In June, Musk defeated one severance suit that alleged that Musk owed former Twitter employees $500 million. But employees involved in that litigation can appeal or join other disputes, the judge noted.

For executives, a growing fear is seemingly that Musk will prolong litigation until X goes under. Last year, Musk bragged that he saved X from bankruptcy by cutting costs, but experts warned that lawsuits piling up from vendors—which Plainsite is tracking here—could upend that strategy if Musk loses too many.

“Under Musk’s control, Twitter has become a scofflaw, stiffing employees, landlords, vendors, and others,” executives’ complaint said. “Musk doesn’t pay his bills, believes the rules don’t apply to him, and uses his wealth and power to run roughshod over anyone who disagrees with him.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Ex-Twitter execs push for $200M severance as Elon Musk runs X into ground Read More »

X ignores revenge porn takedown requests unless DMCA is used, study says

deepfake, elon musk, explicit deepfake, ncii, non-consensual intimate imagery, Online Privacy, Policy, revenge porn, Twitter, X / Mike M. / October 8, 2024

Why did the study target X?

The University of Michigan research team worried that their experiment posting AI-generated NCII on X may cross ethical lines.

They chose to conduct the study on X because they deduced it was “a platform where there would be no volunteer moderators and little impact on paid moderators, if any” viewed their AI-generated nude images.

X’s transparency report seems to suggest that most reported non-consensual nudity is actioned by human moderators, but researchers reported that their flagged content was never actioned without a DMCA takedown.

Since AI image generators are trained on real photos, researchers also took steps to ensure that AI-generated NCII in the study did not re-traumatize victims or depict real people who might stumble on the images on X.

“Each image was tested against a facial-recognition software platform and several reverse-image lookup services to verify it did not resemble any existing individual,” the study said. “Only images confirmed by all platforms to have no resemblance to individuals were selected for the study.”

These more “ethical” images were posted on X using popular hashtags like #porn, #hot, and #xxx, but their reach was limited to evade potential harm, researchers said.

“Our study may contribute to greater transparency in content moderation processes” related to NCII “and may prompt social media companies to invest additional efforts to combat deepfake” NCII, researchers said. “In the long run, we believe the benefits of this study far outweigh the risks.”

According to the researchers, X was given time to automatically detect and remove the content but failed to do so. It’s possible, the study suggested, that X’s decision to allow explicit content starting in June made it harder to detect NCII, as some experts had predicted.

To fix the problem, researchers suggested that both “greater platform accountability” and “legal mechanisms to ensure that accountability” are needed—as is much more research on other platforms’ mechanisms for removing NCII.

“A dedicated” NCII law “must clearly define victim-survivor rights and impose legal obligations on platforms to act swiftly in removing harmful content,” the study concluded.

X ignores revenge porn takedown requests unless DMCA is used, study says Read More »

Elon Musk’s X loses battle over federal request for Trump’s DMs

Donald Trump, elon musk, government data requests, January 6, Policy, presidential record act, Stored Communications Act, Twitter, X, x corp / 9u50fv / October 7, 2024

Prosecutors now have a “blueprint” to seize privileged communications, X warned.

Last year, special counsel Jack Smith asked X (formerly Twitter) to hand over Donald Trump’s direct messages from his presidency without telling Trump. Refusing to comply, X spent the past year arguing that the gag order was an unconstitutional prior restraint on X’s speech and an “end-run” around a record law shielding privileged presidential communications.

Under its so-called free speech absolutist owner Elon Musk, X took this fight all the way to the Supreme Court, only for the nation’s highest court to decline to review X’s appeal on Monday.

It’s unclear exactly why SCOTUS rejected X’s appeal, but in a court filing opposing SCOTUS review, Smith told the court that X’s “contentions lack merit and warrant no further review.” And SCOTUS seemingly agreed.

The government had argued that its nondisclosure order was narrowly tailored to serve a compelling interest in stopping Trump from either deleting his DMs or intimidating witnesses engaged in his DMs while he was in office.

At that time, Smith was publicly probing the interference with a peaceful transfer of power after the 2020 presidential election, and courts had agreed that “there were ‘reasonable grounds to believe’ that disclosing the warrant” to Trump “‘would seriously jeopardize the ongoing investigation’ by giving him ‘an opportunity to destroy evidence, change patterns of behavior, [or] notify confederates,” Smith’s court filing said.

Under the Stored Communications Act (SCA), the government can request data and apply for a nondisclosure order gagging any communications provider from tipping off an account holder about search warrants for limited periods deemed appropriate by a court, Smith noted. X was only prohibited from alerting Trump to the search warrant for 180 days, Smith said, and only restricted from discussing the existence of the warrant.

As the government sees it, this reliance on the SCA “does not give unbounded, standardless discretion to government officials or otherwise create a risk of ‘freewheeling censorship,'” like X claims. But the government warned that affirming X’s appeal “would mean that no SCA warrant could be enforced without disclosure to a potential privilege holder, regardless of the dangers to the integrity of the investigation.”

Court finds X alternative to gag order “unpalatable”

X tried to wave a red flag in its SCOTUS petition, warning the court that this was “the first time in American history” that a court “ordered disclosure of presidential communications without notice to the President and without any adjudication of executive privilege.”

The social media company argued that it receives “tens of thousands” of government data requests annually—including “thousands” with nondisclosure orders—and pushes back on any request for privileged information that does not allow users to assert their privileges. Allowing the lower court rulings to stand, X warned SCOTUS, could create a path for government to illegally seize information not just protected by executive privilege, but also by attorney-client, doctor-patient, or journalist-source privileges.

X’s “policy is to notify users about law enforcement requests ‘prior to disclosure of account information’ unless legally ‘prohibited from doing so,'” X argued.

X suggested that rather than seize Trump’s DMs without giving him a chance to assert his executive privilege, the government should have designated a representative capable of weighing and asserting whether some of the data requested was privileged. That’s how the Presidential Records Act (PRA) works, X noted, suggesting that Smith’s team was improperly trying to avoid PRA compliance by invoking SCA instead.

But the US government didn’t have to prove that the less-restrictive alternative X submitted would have compromised its investigation, X said, because the court categorically rejected X’s submission as “unworkable” and “unpalatable.”

According to the court, designating a representative placed a strain on the government to deduce if the representative could be trusted not to disclose the search warrant. But X pointed out that the government had no explanation for why a PRA-designated representative, Steven Engel—a former assistant attorney general for the Office of Legal Counsel who “publicly testified about resisting the former President’s conduct”—”could not be trusted to follow a court order forbidding him from further disclosure.”

“Going forward, the government will never have to prove it could avoid seriously jeopardizing its investigation by disclosing a warrant to only a trusted representative—a common alternative to nondisclosure orders,” X argued.

In a brief supporting X, attorneys for the nonprofit digital rights group the Electronic Frontier Foundation (EFF) wrote that the court was “unduly dismissive of the arguments” X raised and “failed to apply exacting scrutiny, relieving the government of its burden to actually demonstrate, with evidence, that these alternatives would be ineffective.”

Further, X argued that none of the government’s arguments for nondisclosure made sense. Not only was Smith’s investigation announced publicly—allowing Trump ample time to delete his DMs already—but also “there was no risk of destruction of the requested records because Twitter had preserved them.” On top of that, during the court battle, the government eventually admitted that one rationale for the nondisclosure order—that Trump posed a supposed “flight risk” if the search warrant was known—”was implausible because the former President already had announced his re-election run.”

X unsuccessfully pushed SCOTUS to take on the Trump case as an “ideal” and rare opportunity to publicly decide when nondisclosure orders cross the line when seeking to seize potentially privileged information on social media.

In its petition for SCOTUS review, X pointed out that every social media or communications platform is bombarded with government data requests that only the platforms can challenge. That leaves it up to platforms to figure out when data requests are problematic, which they frequently are, as “the government often agrees to modify or vacate them in informal negotiations,” X argued.

But when the government refuses to negotiate, as in the Trump case, platforms have to decide if litigation is worth it, risking sanctions if the court finds the platform in contempt, just as X was sanctioned $350,000 in the Trump case. If a less restrictive alternative was determined appropriate by the courts, such as appointing a trusted representative, platforms would never have had to guess when data requests threaten to expose their users’ privileged information, X argued.

According to X, another case like this won’t come around for decades, where court filings wouldn’t have to be redacted and a ruling wouldn’t have to happen behind closed doors.

But the government seemingly persuaded the Supreme Court to decline to review the case, partly by arguing that X’s challenge to its nondisclosure order was moot. Responding to X’s objections, the government had eventually agreed to modify the nondisclosure order to disclose the warrant to Trump, so long as the name of the case agent assigned to the investigation was redacted. So X’s appeal is really over nothing, the government suggested.

Additionally, the government argued that “this case would not be an appropriate vehicle” for SCOTUS’ review of the question X raised because “no executive privilege issue actually existed in this case.”

“If review of the underlying legal issues were ever warranted, the Court should await a live case in which the issues are concretely presented,” Smith’s court filing said.

X is likely deflated by SCOTUS’ call declining to review X’s appeal. In its petition, X claimed that the court system risked providing “a blueprint for prosecutors who wish to obtain potentially privileged materials” and “this end-run will not be limited to federal prosecutors,” X warned. State prosecutors will likely also be emboldened to do the same now that the precedent has been set, X predicted.

In their brief supporting X, EFF lawyers noted that the government already has “far too much authority to shield its activities from public scrutiny.” By failing to prevent nondisclosure orders from restraining speech, the court system risks making it harder to “meaningfully test these gag orders in court,” EFF warned.

“Even a meritless gag order that is ultimately voided by a court causes great harm while it is in effect,” EFF’s lawyers said, while disclosure “ensures that individuals whose information is searched have an opportunity to defend their privacy from unwarranted and unlawful government intrusions.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Elon Musk’s X loses battle over federal request for Trump’s DMs Read More »

X fails to avoid Australia child safety fine by arguing Twitter doesn’t exist

australia, child sexual abuse materials, csam, elon musk, online child safety, Online safety, Policy, Twitter, X, x corp / DJ Henderson / October 5, 2024

“I cannot accept this evidence without a much better explanation of Mr. Bogatz’s path of reasoning,” Wheelahan wrote.

Wheelahan emphasized that the Nevada merger law specifically stipulated that “all debts, liabilities, obligations and duties of the Company shall thenceforth remain with or be attached to, as the case may be, the Acquiror and may be enforced against it to the same extent as if it had incurred or contracted all such debts, liabilities, obligations, and duties.” And Bogatz’s testimony failed to “grapple with the significance” of this, Wheelahan said.

Overall, Wheelahan considered Bogatz’s testimony on X’s merger-acquired liabilities “strained,” while deeming the government’s US merger law expert Alexander Pyle to be “honest and ready to make appropriate concessions,” even while some of his testimony was “not of assistance.”

Luckily, it seemed that Wheelahan had no trouble drawing his own conclusion after analyzing Nevada’s merger law.

“I find that a Nevada court would likely hold that the word ‘liabilities'” in the merger law “is broad enough on its proper construction under Nevada law to encompass non-pecuniary liabilities, such as the obligation to respond to the reporting notice,” Wheelahan wrote. “X Corp has therefore failed to show that it was not required to respond to the reporting notice.”

Because X “failed on all its claims,” the social media company must cover costs from the appeal, and X’s costs in fighting the initial fine will seemingly only increase from here.

Fighting fine likely to more than double X costs

In a press release celebrating the ruling, eSafety Commissioner Julie Inman Grant criticized X’s attempt to use the merger to avoid complying with Australia’s Online Safety Act.

X fails to avoid Australia child safety fine by arguing Twitter doesn’t exist Read More »

Elon Musk claims victory after judge blocks Calif. deepfake law

AI, ai-generated content, California, deceptive content, Deepfakes, disinformation, election laws, election misinformation, elon musk, Gavin Newsom, Policy, Twitter, X, youtube / Shannon Garcia / October 3, 2024

“Almost any digitally altered content, when left up to an arbitrary individual on the Internet, could be considered harmful,” Mendez said, even something seemingly benign like AI-generated estimates of voter turnouts shared online.

Additionally, the Supreme Court has held that “even deliberate lies (said with ‘actual malice’) about the government are constitutionally protected” because the right to criticize the government is at the heart of the First Amendment.

“These same principles safeguarding the people’s right to criticize government and government officials apply even in the new technological age when media may be digitally altered: civil penalties for criticisms on the government like those sanctioned by AB 2839 have no place in our system of governance,” Mendez said.

According to Mendez, X posts like Kohls’ parody videos are the “political cartoons of today” and California’s attempt to “bulldoze over the longstanding tradition of critique, parody, and satire protected by the First Amendment” is not justified by even “a well-founded fear of a digitally manipulated media landscape.” If officials find deepfakes are harmful to election prospects, there is already recourse through privacy torts, copyright infringement, or defamation laws, Mendez suggested.

Kosseff told Ars that there could be more narrow ways that government officials looking to protect election integrity could regulate deepfakes online. The Supreme Court has suggested that deepfakes spreading disinformation on the mechanics of voting could possibly be regulated, Kosseff said.

Mendez got it “exactly right” by concluding that the best remedy for election-related deepfakes is more speech, Kosseff said. As Mendez described it, a vague law like AB 2839 seemed to only “uphold the State’s attempt to suffocate” speech.

Parody is vital to democratic debate, judge says

The only part of AB 2839 that survives strict scrutiny, Mendez noted, is a section describing audio disclosures in a “clearly spoken manner and in a pitch that can be easily heard by the average listener, at the beginning of the audio, at the end of the audio, and, if the audio is greater than two minutes in length, interspersed within the audio at intervals of not greater than two minutes each.”

Elon Musk claims victory after judge blocks Calif. deepfake law Read More »

“Fascists”: Elon Musk responds to proposed fines for disinformation on X

australia, disinformation, elon musk, misinformation, Policy, syndication, Twitter, X / Mike M. / September 14, 2024

Being responsible is so hard —

“Elon Musk’s had more positions on free speech than the Kama Sutra,” says lawmaker.

Nic Fildes, Financial Times – Sep 13, 2024 1: 32 pm UTC

Getty Images | Dan Kitwood

Elon Musk has lambasted Australia’s government as “fascists” over proposed laws that could levy substantial fines on social media companies if they fail to comply with rules to combat the spread of disinformation and online scams.

The billionaire owner of social media site X posted the word “fascists” on Friday in response to the bill, which would strengthen the Australian media regulator’s ability to hold companies responsible for the content on their platforms and levy potential fines of up to 5 percent of global revenue. The bill, which was proposed this week, has yet to be passed.

Musk’s comments drew rebukes from senior Australian politicians, with Stephen Jones, Australia’s finance minister, telling national broadcaster ABC that it was “crackpot stuff” and the legislation was a matter of sovereignty.

Bill Shorten, the former leader of the Labor Party and a cabinet minister, accused the billionaire of only championing free speech when it was in his commercial interests. “Elon Musk’s had more positions on free speech than the Kama Sutra,” Shorten said in an interview with Australian radio.

The exchange marks the second time that Musk has confronted Australia over technology regulation.

In May, he accused the country’s eSafety Commissioner of censorship after the government agency took X to court in an effort to force it to remove graphic videos of a stabbing attack in Sydney. A court later denied the eSafety Commissioner’s application.

Musk has also been embroiled in a bitter dispute with authorities in Brazil, where the Supreme Court ruled last month that X should be blocked over its failure to remove or suspend certain accounts accused of spreading misinformation and hateful content.

Australia has been at the forefront of efforts to regulate the technology sector, pitting it against some of the world’s largest social media companies.

This week, the government pledged to introduce a minimum age limit for social media use to tackle “screen addiction” among young people.

In March, Canberra threatened to take action against Meta after the owner of Facebook and Instagram said it would withdraw from a world-first deal to pay media companies to link to news stories.

The government also introduced new data privacy measures to parliament on Thursday that would impose hefty fines and potential jail terms of up to seven years for people found guilty of “doxxing” individuals or groups.

Prime Minister Anthony Albanese’s government had pledged to outlaw doxxing—the publication of personal details online for malicious purposes—this year after the details of a private WhatsApp group containing hundreds of Jewish Australians were published online.

Australia is one of the first countries to pursue laws outlawing doxxing. It is also expected to introduce a tranche of laws in the coming months to regulate how personal data can be used by artificial intelligence.

“These reforms give more teeth to the regulation,” said Monique Azzopardi at law firm Clayton Utz.

“Fascists”: Elon Musk responds to proposed fines for disinformation on X Read More »

Ex-Twitter staffer wins $600K over Musk’s click-yes-or-resign ultimatum

elon musk, employment law, ireland, Labor law, Policy, severance, Twitter, x corp / Shannon Garcia / August 13, 2024

Please, be reasonable —

Elon Musk’s 24-hour email ultimatum unfairly dismissed Twitter staff, court says.

Ashley Belanger – Aug 13, 2024 6: 35 pm UTC

Elon Musk had no business sending Twitter employees an email giving them 24 hours to click “yes” to keep their jobs or else voluntarily resign during his takeover in 2022, an Irish workplace watchdog ruled Monday.

Not only did the email not provide staff with enough notice, the labor court ruled, but also any employee’s failure to click “yes” could in no way constitute a legal act of resignation. Instead, the court reviewed evidence alleging that the email appeared designed to either get employees to agree to new employment terms, sight unseen, or else push employees to volunteer for dismissal during a time of mass layoffs across Twitter.

“Going forward, to build a breakthrough Twitter 2.0 and succeed in an increasingly competitive world, we will need to be extremely hardcore,” Musk wrote in the all-staff email. “This will mean working long hours at high intensity. Only exceptional performance will constitute a passing grade.”

With the subject line, “A Fork in the Road,” the email urged staff, “if you are sure that you want to be part of the new Twitter, please click yes on the link below. Anyone who has not done so by 5pm ET tomorrow (Thursday) will receive three months of severance. Whatever decision you make, thank you for your efforts to make Twitter successful.”

In a 73-page ruling, an adjudication officer for the Irish Workplace Relations Commission (WRC), Michael MacNamee, ruled that Twitter’s abrupt dismissal of an Ireland-based senior executive, Gary Rooney, was unfair, the Irish public service broadcaster RTÉ reported. Rooney had argued that his contract clearly stated that his resignation must be provided in writing, not by refraining to fill out a form.

A spokesperson for the Department of Enterprise, Trade, and Employment, which handles the WRC’s media inquiries, told Ars that the decision will be published on the WRC’s website on August 26 after both parties have “the opportunity to consider it in full.”

Now, instead of paying Rooney the draft severance amount worth a little more than $25,000, Twitter, which is now called X, has to pay Rooney more than $600,000. According to many outlets, this is a record award from the WRC and included about $220,000 “for prospective future loss of earnings.”

The WRC dismissed Rooney’s claim regarding an allegedly owed performance bonus for 2022 but otherwise largely agreed with his arguments on the unfair dismissal.

Rooney had worked for Twitter for nine years prior to Musk’s takeover, telling the WRC that he previously loved his job but had no way of knowing from the “Fork in the Road” email “what package was being offered” or “implications of agreeing to stay working for Twitter.” He hesitated to click yes, not knowing how his benefits or stock options might change, while discussing his decision to potentially leave with other Twitter employees on Slack and claiming he would be leaving on Twitter.

Twitter tried to argue that the Slack discussions and Rooney’s tweets about the email indicated that he intended to resign, but the court disagreed that these were relevant.

“No employee when faced with such a situation could possibly be faulted for refusing to be compelled to give an open-ended unqualified assent to any of the proposals,” MacNamee said.

In total, 35 Twitter staffers didn’t click “yes”

A lot of laid-off employees sued Twitter after Musk’s takeover, and so far, X has seemed to come out ahead. The company has beaten at least one lawsuit while also threatening to claw back money it claims it “overpaid” Australian employees who were laid off. (X says it bungled the conversion from Australian to US dollars.) Rooney’s suit is among the first major victories for laid-off Twitter staffers fighting Musk’s allegedly unfair and penny-pinching severance packages.

X’s senior director of human resources, Lauren Wegman, testified that of the 270 employees in Ireland who received the email, only 35 did not click yes. After this week’s ruling, it seems likely that X may face more complaints from any of those dozens of employees who took the same route Rooney did.

X has not commented on the ruling but is likely disappointed by the loss. The social media company had tried to argue that Rooney’s employment contract “allowed the company to make reasonable changes to its terms and conditions,” RTÉ reported. Wegman had further testified that it was unreasonable for Rooney to believe his pay might change as a result of clicking yes, telling the WRC that his “employment would probably not have ended if he had raised a grievance” within the 24-hour deadline, RTÉ reported.

Rooney’s lawyer, Barry Kenny, told The Guardian that Rooney and his legal team welcomed “the clear and unambiguous finding that my client did not resign from his employment but was unfairly dismissed from his job, notwithstanding his excellent employment record and contribution to the company over the years.”

“It is not okay for Mr. Musk, or indeed any large company to treat employees in such a manner in this country,” Kenny said. “The record award reflects the seriousness and the gravity of the case.”

Twitter will be able to appeal the WRC’s decision, The Journal reported.

Ex-Twitter staffer wins $600K over Musk’s click-yes-or-resign ultimatum Read More »

X is training Grok AI on your data—here’s how to stop it

AI, chatbot, elon musk, grok, llm, privacy, Tech, Twitter, X, x.AI / Mike M. / July 26, 2024

Grok Your Privacy Options —

Some users were outraged to learn this was opt-out, not opt-in.

Samuel Axon – Jul 26, 2024 6: 13 pm UTC

An AI-generated image released by xAI during the launch of Grok — Enlarge / An AI-generated image released by xAI during the open-weights launch of Grok-1.

Elon Musk-led social media platform X is training Grok, its AI chatbot, on users’ data, and that’s opt-out, not opt-in. If you’re an X user, that means Grok is already being trained on your posts if you haven’t explicitly told it not to.

Over the past day or so, users of the platform noticed the checkbox to opt out of this data usage in X’s privacy settings. The discovery was accompanied by outrage that user data was being used this way to begin with.

The social media posts about this sometimes seem to suggest that Grok has only just begun training on X users’ data, but users actually don’t know for sure when it started happening.

Earlier today, X’s Safety account tweeted, “All X users have the ability to control whether their public posts can be used to train Grok, the AI search assistant.” But it didn’t clarify either when the option became available or when the data collection began.

You cannot currently disable it in the mobile apps, but you can on mobile web, and X says the option is coming to the apps soon.

On the privacy settings page, X says:

To continuously improve your experience, we may utilize your X posts as well as your user interactions, inputs, and results with Grok for training and fine-tuning purposes. This also means that your interactions, inputs, and results may also be shared with our service provider xAI for these purposes.

X’s privacy policy has allowed for this since at least September 2023.

It’s increasingly common for user data to be used this way; for example, Meta has done the same with its users’ content, and there was an outcry when Adobe updated its terms of use to allow for this kind of thing. (Adobe quickly backtracked and promised to “never” train generative AI on creators’ content.)

How to opt out

To stop Grok from training on your X content, first go to “Settings and privacy” from the “More” menu in the navigation panel…

Samuel Axon
Then click or tap “Privacy and safety”…

Samuel Axon
Then “Grok”…

Samuel Axon
And finally, uncheck the box.

Samuel Axon

You can’t opt out within the iOS or Android apps yet, but you can do so in a few quick steps on either mobile or desktop web. To do so:

Click or tap “More” in the nav panel
Click or tap “Settings and privacy”
Click or tap “Privacy and safety”
Scroll down and click or tap “Grok” under “Data sharing and personalization”
Uncheck the box “Allow your posts as well as your interactions, inputs, and results with Grok to be used for training and fine-tuning,” which is checked by default.

Alternatively, you can follow this link directly to the settings page and uncheck the box with just one more click. If you’d like, you can also delete your conversation history with Grok here, provided you’ve actually used the chatbot before.

X is training Grok AI on your data—here’s how to stop it Read More »

No judge with Tesla stock should handle Elon Musk cases, watchdog argues

elon musk, media matter for America, online advertising, Policy, Tesla, Tesla stock, Twitter, twitter ad boycott, X, x ad boycott, x corp / Mike M. / July 24, 2024

Elon Musk’s fight against Media Matters for America (MMFA)—a watchdog organization that he largely blames for an ad boycott that tanked Twitter/X’s revenue—has raised an interesting question about whether any judge owning Tesla stock might reasonably be considered biased when weighing any lawsuit centered on the tech billionaire.

In a court filing Monday, MMFA lawyers argued that “undisputed facts—including statements from Musk and Tesla—lay bare the interest Tesla shareholders have in this case.” According to the watchdog, any outcome in the litigation will likely impact Tesla’s finances, and that’s a problem because there’s a possibility that the judge in the case, Reed O’Connor, owns Tesla stock.

“X cannot dispute the public association between Musk—his persona, business practices, and public remarks—and the Tesla brand,” MMFA argued. “That association would lead a reasonable observer to ‘harbor doubts’ about whether a judge with a financial interest in Musk could impartially adjudicate this case.”

It’s still unclear if Judge O’Connor actually owns Tesla stock. But after MMFA’s legal team uncovered disclosures showing that he did as of last year, they argued that fact can only be clarified if the court views Tesla as a party with a “financial interest in the outcome of the case” under Texas law—“no matter how small.”

To make those facts clear, MMFA is now arguing that X must be ordered to add Tesla as an interested person in the litigation, which a source familiar with the matter told Ars, would most likely lead to a recusal if O’Connor indeed still owned Tesla stock.

“At most, requiring X to disclose Tesla would suggest that judges owning stock in Tesla—the only publicly traded Musk entity—should recuse from future cases in which Musk himself is demonstrably central to the dispute,” MMFA argued.

Ars could not immediately reach X Corp’s lawyer for comment.

However, in X’s court filing opposing the motion to add Tesla as an interested person, X insisted that “Tesla is not a party to this case and has no interest in the subject matter of the litigation, as the business relationships at issue concern only X Corp.’s contracts with X’s advertisers.”

Calling MMFA’s motion “meritless,” X accused MMFA of strategizing to get Judge O’Connor disqualified in order to go “forum shopping” after MMFA received “adverse rulings” on motions to stay discovery and dismiss the case.

As to the question of whether any judge owning Tesla stock might be considered impartial in weighing Musk-centric cases, X argued that Judge O’Connor was just as duty-bound to reject an improper motion for recusal, should MMFA go that route, as he was to accept a proper motion.

“Courts are ‘reluctant to fashion a rule requiring judges to recuse themselves from all cases that might remotely affect nonparty companies in which they own stock,'” X argued.

Recently, judges have recused themselves from cases involving Musk without explaining why. In November, a prior judge in the very same Media Matters’ suit mysteriously recused himself, with The Hill reporting that it was likely that the judge’s “impartiality might reasonably be questioned” for reasons like a financial interest or personal bias. Then in June, another judge ruled he was disqualified to rule on a severance lawsuit raised by former Twitter executives without giving “a specific reason,” Bloomberg Law reported.

Should another recusal come in the MMFA lawsuit, it would be a rare example of a judge clearly disclosing a financial interest in a Musk case.

“The straightforward question is whether Musk’s statements and behavior relevant to this case affect Tesla’s stock price, not whether they are the only factor that affects it,” MMFA argued. ” At the very least, there is a serious question about whether Musk’s highly unusual management practices mean Tesla must be disclosed as an interested party.”

Parties expect a ruling on MMFA’s motion in the coming weeks.

No judge with Tesla stock should handle Elon Musk cases, watchdog argues Read More »