RELEASE: Regulators Must Intervene in Case of a Twitter Bankruptcy or Acquisition
Washington, D.C. — In the months since Elon Musk purchased Twitter, the company’s finances have grown more precarious. As advertisers have pulled back from the platform, bankruptcy is a real possibility given the massive debt Musk took on to purchase Twitter.
A new analysis from the Center for American Progress says it’s possible that another company could seek to acquire Twitter should Musk declare bankruptcy. An acquisition could also occur if Twitter continues to limp along bleeding money and users.
In that case, regulators and others government official must be ready to act quickly to address the anti-competition dangers of such an acquisition to prevent the potential misuse or abuse of users’ Twitter data, the analysis says.
“It is possible that Musk has lost so much money and so much pride in purchasing Twitter that he would rather it die forever than be sold at a loss to others. But regulators need to prepare for a world where financial reality finally catches up to him,” said Adam Conner, vice president of Technology Policy at CAP and author of the column. “A Big Tech acquisition of Twitter would raise tremendous competition concerns and must be carefully considered by regulators if the only alternative is Twitter shutting down.”
The analysis discusses the growing recognition among scholars, lawmakers, and technology experts of the dangers of allowing large tech companies to acquire themselves into positions of strength, foreclosing competition or reinforcing their own market dominance.
If a purchase becomes necessary to prevent Twitter from shutting down, regulators should promote competition among social media sites by favoring companies that do not have platforms with large existing network effects. Regulators should also consider other conditions on any purchase of Twitter, including mandated interoperability, data portability, and researcher access.
Read the column: “The Dangers of a Twitter Bankruptcy or Acquisition: Implications for Competition and Data Security and Considerations for Regulators” by Adam Conner
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