Musk lost his previous lawsuit after the court found it had no authority to amend or end the FTC’s order. Musk is trying again with new arguments, complaining in a May petition to the FTC that they should set aside the order “without delay.”
According to Musk, the FTC should stop its monitoring because Twitter no longer exists, as X was merged into xAI, and then xAI was folded into SpaceX. Musk also argues that since none of the leadership or engineers responsible for the two-factor authentication error remain at the company, and “X has since built a world-class privacy and data-protection program” that protects consumers, the FTC doesn’t have to intervene anymore.
The company further argued that it has paid $17 million in “needless costs,” since a lawsuit over the same two-factor authentication issue ended with a verdict in Twitter’s favor. If a court found that Twitter’s privacy policy adequately informed users that their contact info might be used for ad targeting, then the FTC should not be able to continue punishing X for that behavior, Musk argued.
“The factual foundation of the FTC’s complaint has been dismantled,” X says. “And the Order’s staggering costs—imposed on both the Company and on the Commission itself are unjustifiable.”
As X sees it, the order also requires the company to duplicate compliance efforts, because X already must take extra precautions with data to comply with laws like the European Union’s General Data Protection Regulation (GDPR).
Finally, X raised two other claims to justify tossing the order. First, X claimed that allowing the FTC to maintain the order would chill speech on X, because it supposedly “creates a permanent mechanism through which future regulators can pressure the Company over the viewpoints it hosts.”
And second, X argued that Donald Trump’s AI Action Plan requires government agencies to drop orders such as this one. Since X is “at the center of a family of companies—including xAI—that are at the forefront of America’s AI ambitions,” the FTC risks running afoul of Trump’s decree to eliminate unnecessary bureaucracy, if the agency’s order keeps on diverting X “engineering resources from innovation to compliance paperwork,” the petition says.
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