(trendingpoliticsnews) – In an escalating saga of regulatory confrontations, Joe Biden’s Federal Trade Commission (FTC) reportedly attempted to compel global consultancy firm Ernst & Young (EY) to penalize Elon Musk over his activity on Twitter.
Documents from a motion for a protective order in the case of the United States vs Twitter reveal that the FTC was “adamant” about having EY prepare a report that painted a negative picture of Musk’s Twitter ownership. The commission reportedly issued an ultimatum to EY, stating, “This is absolutely what you will do and this is going to occur, and you’ll produce a report at the end of the day.”
EY is one of the largest professional services networks in the world, often grouped with the “Big Four” firms, which also include Deloitte, KPMG, and PricewaterhouseCoopers (PwC). They provide a wide range of services, including auditing, tax services, consulting, and advisory services.
According to the revealed documents, EY’s senior leaders feared retaliation from the FTC if they chose to resign as the independent assessor. There was concern that the FTC would “take exception to EY’s withdrawal and create ‘other’ challenges for EY over time.”
Responding to the news, Rep. Jim Jordan (R-OH) expressed his shock on Twitter, saying, “We knew they were harassing @elonmusk, but it was worse than we thought.”
On Thursday, Jordan also questioned FTC Chair Lina Khan about the perceived harassment of Musk and Twitter. He referenced the FTC’s intensive investigation into them, including the numerous demand letters and requests directed at the company.
He also questioned the FTC’s interest in Twitter’s communication with journalists and potential First Amendment violations. The FTC Chair defended the agency’s actions by explaining that their focus was on protecting users’ privacy and maintaining Twitter’s compliance with a longstanding consent order. The Congressman however remained skeptical, pointing out that the FTC’s actions could be politically motivated.
WATCH:
Now rebranded as X Corp., the social media giant previously known as Twitter has initiated legal proceedings against the Federal Trade Commission (FTC). The corporation alleges that the FTC’s investigative practices concerning them have been biased and unregulated. Furthermore, the lawsuit seeks to restrict the FTC from interrogating owner Elon Musk.
The legal action has its roots in a consent order from 2011, which Twitter agreed to with the FTC. This agreement obligated Twitter to have its security measures evaluated by an external party. However, the FTC intensified its oversight after Twitter acknowledged in 2019 that there might have been an unintentional misuse of user data for advertisement purposes. Consequently, Twitter faced a substantial penalty of $150 million in May 2022.
The FTC’s apprehensions amplified following Musk’s acquisition of the firm in October 2022, an event that was followed by a significant number of layoffs. According to the lawsuit, the FTC has since overwhelmed the company with demanding requests for information. Some of these requests only marginally pertain to user data privacy or X Corp.’s adherence to the terms of the consent order.
The court is slated to hear the lawsuit on August 17, although this date might be subject to change in accordance with the court’s directives.
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