On Tuesday, Twitter shareholders will decide whether to approve Elon Musk’s contentious $44 billion acquisition plan as senators prepare to hear testimony from a whistleblower alleging widespread security flaws at the social media platform
The Senate Judiciary hearing with Peiter “Mudge” Zatko, a whistleblower, and the shareholder vote come after Musk used Zatko’s claims in his legal effort to withdraw from the Twitter acquisition agreement, and as lawmakers have increased their scrutiny of Twitter and other social media companies’ capacity to safeguard users ahead of the upcoming midterm elections.
Before the hearing, keep a look for these five hearing.
Will Democrats and GOP form a united front
Tech scrutiny has emerged as a rare unifying issue in Congress, with lawmakers on both sides of the aisle attacking dominant tech platforms like Twitter.
Many of the issues raised by Zatko in his 84-page complaint — sent to the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), Department of Justice (DOJ) and lawmakers — get to the heart of concerns Democrats and Republicans have pressed social media companies on, according to a copy obtained by The Washington Post in August.
When announcing the hearing in August, Senate Judiciary Chairman Dick Durbin (D-Ill.) and Ranking Member Sen. Chuck Grassley (R-Iowa) issued a joint statement stating the allegations of “widespread security failures and foreign state actor interference at Twitter raise serious concerns.”
“If these claims are accurate, they may show dangerous data privacy and security risks for Twitter users around the world,” Durbin and Grassley said.
However, senators on the panel could split down party lines over more contentious topics at the hearing.
During past tech hearings, like with Facebook whistleblower Frances Haugen last year, or with tech executives including former Twitter CEO Jack Dorsey in 2020, Republicans accused the platforms of censoring conservatice speech.
Meanwhile, Democrats have broadly pushed for tech companies, including Twitter, to take a greater stand against hate speech and misinformation, and may question Zatko about Twitter’s policies and ability to moderate such content.
Questions on foreign interference
At the center of Zatko’s allegations of widespread security deficiencies is an accusation that Twitter is not complying with a 2011 FTC consent order. The agency ordered Twitter to create and maintain a security program designed to protect privacy and nonpublic consumer information as part of a settlement over an FTC complaint that hackers were able to gain control of Twitter on two occasions in 2009.
Up until the time of Zatko’s termination, he alleges Twitter “remained out of compliance in multiple respects” with the 2011 order. The “deficiencies” led Twitter to suffer from an “anomalously high rate of security incidents,” he alleged.
Throughout 2021, Zatko says he became aware of “multiple episodes suggesting that Twitter had been penetrated by foreign intelligence agencies and/or was complicit in threats to democratic governance,” according to the complaint.
For example, the complaint alleges the Indian government forced Twitter to hire specific individuals who were government agents who would have access to “vast amounts of Twitter sensitive data” because of “Twitter’s basic architectural flaws.” Zatko alleges that Twitter executives violated the company’s commitment to its users by “knowingly permitting an Indian government agent direct unsupervised access” to Twitter data.
Zatko also alleges that Twitter executives “risked endangering” users in China, who are using circumvention technologies to access Twitter despite China’s ban, by accepting money from Chinese entities.
Twitter has pushed back strongly on Zatko’s allegations, calling it a “false narrative” that is “riddled with inconsistencies and inaccuracies and lacks important context.”
National security scrutiny
Zatko’s wide-ranging accusations also raise concerns about national security, which will likely be a focus for senators on the panel.
Part of his complaint focuses on questions he asked during the Jan. 6 attack at the Capitol last year. Zatko alleges he asked an executive in charge of engineering how to “seal the production environment” from potential internal protests aligning with the rioters.
Zatko said he was told it was “impossible to protect the production environment” and that all engineers had access without a log of who accessed it or what they did.
Already Zatko’s complaint has led Sens. Ed Markey (D-Mass.) and Richard Blumenthal (D-Conn.) to urge regulatory agencies to investigate Zatko’s allegations.
The Senate more broadly is focusing this week on the risk social media platforms have on national security, as well. A day after Zatko testifies before the Senate Judiciary Committee, the Senate Homeland Security and Governmental Affairs Committee is holding a two-part hearing with current and former social media executives to examine the concerns.
Executives from Twitter, YouTube, Meta and TikTok will testify before the Senate panel Wednesday.
“I am convening this hearing to provide a rare opportunity for the public to hear directly from the architects of these platforms on how they balance their pursuit of increased user engagement and revenue with the risk of funneling people towards violent and dangerous content that threatens the safety of our communities,” Senate Homeland Security Chair Gary Peters (D-Mich.) said in a statement.
The shareholder vote
Twitter shareholders will vote on the embattled deal for Musk to buy the company for $44 billion at a special meeting tomorrow that will likely coincide with the Senate hearing. The hearing is scheduled to begin at 10 a.m., and the shareholder vote is scheduled for 1 p.m. EST.
Twitter’s board of directors unanimously recommended that shareholders vote to approve the adoption of the merger agreement, and analysts say shareholders are expected to overwhelmingly approve the deal.
Despite the outcome of the vote, the deal will still be stuck in limbo as Twitter and Musk await an October 17 trial in Delaware Chancery Court over the company suing to force Musk to follow through on his deal.
“The shareholder approval expected tomorrow formally sets the stage for the Game of Thrones Battle between Musk and Twitter in the Delaware Courts with the high possibility in our opinion that some form of negotiation likely takes place ahead of this date,” Wedbush analysts Dan Ives and John Katsingris said in a note Monday.
How Elon Musk factors in
Musk is trying to back out of the agreement he reached earlier this year with Twitter to buy the company for $44 billion. He argues that Twitter was not forthcoming in its assessment of the number of spam bots on the account, and therefore the deal should be voided.
Part of Zatko’s complaint appears to bolster Musk’s accusations. Zatko even accuses Twitter of “lying” to Musk about bots on the platform.
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Musk’s lawyers are leaning heavily into Zatko’s argument and issued a subpoena for Zatko as part of the case. And last week, a judge ruled that Musk will be able to introduce allegations from Zatko in the case, but denied Musk’s request to delay the trial.
Musk filed twice with the SEC since Zatko’s accusations were published trying to back out of the deal based on the allegations he raised. Both times, Twitter has responded saying his argument is invalid, most recently in a regulatory filing Monday.
“As was the case with each of your prior purported terminations, the Musk Parties third purported termination is invalid for the independent reason that Mr. Musk and the other Musk Parties continue to knowingly, intentionally, willfully, and materially breach the Agreement,” Twitter attorneys wrote in the Monday filing.
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