US federal body says it does not have the right to stop Elon Musk’s acquisition of Twitter

The world’s richest person struck a deal to acquire Twitter for $44bn last month

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The US Federal Communications Commission does not have the right to interfere in billionaire Elon Musk’s acquisition of microblogging platform Twitter, it said on Monday.

Mr Musk struck a deal to acquire Twitter for $44 billion last month.

“Some have recently called on the FCC to stop Elon Musk from acquiring Twitter … but nothing in the United States Code or our regulations gives us the right to interfere with this transaction,” Nathan Simington, the FCC’s commissioner, said.

“Our competition review authority does not and has never extended to internet platforms like Twitter. But even if this deal were within our purview, it would be inappropriate and contrary to the public interest to block it.”

The FCC is an independent agency of the US federal government that regulates communications by radio, television, wire, satellite and cable in the country.

“Free speech is the bedrock of a functioning democracy and Twitter is the digital town square where matters vital to the future of humanity are debated,” Mr Musk said after announcing his acquisition of the San Francisco-based platform.

“I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots and authenticating all humans. Twitter has tremendous potential. I look forward to working with the company and the community of users to unlock it.”

Anti-trust regulators should welcome Mr Musk’s purchase, the FCC said.

His acquisition does not raise any concerns about “vertical or horizontal concentration in the social media market” and there is no reason to think it would “limit competition or harm consumer welfare”.

“Consumer choice and freedom have suffered due to the restrictive, and often politically motivated, content moderation practices adopted across all major social media platforms,” Mr Simington said.

“If Mr Musk follows through on his stated intention to ease Twitter’s restrictions on speech, he would almost certainly enhance competition and better serve those Americans, the majority, who value free speech.”

Mr Musk’s offer to buy Twitter came after frequent complaints about content censorship and a lack of free speech on the site.

In response to a poll he conducted on the platform, 70.4 per cent of users said Twitter does not stick to free speech principles, while 29.6 per cent supported the platform.

Following the announcement of his acquisition, Mr Musk tweeted: “I hope that even my worst critics remain on Twitter, because that is what free speech means.”

The FCC also refuted claims about the concentration of ownership if Mr Musk becomes the sole owner of Twitter.

“Google, YouTube, Facebook, The Washington Post and The New York Times are each owned or controlled by one or two people or a single family,” Mr Simington said.

“The FCC cannot, and should not, block this sale ... I encourage my colleagues across the government to investigate the market failures and perverse incentives that caused big tech companies to standardise around censorious and slanted content policies in the first place.”

Mr Musk’s deal has met resistance, particularly from Twitter’s shareholders.

Saudi billionaire Prince Alwaleed bin Talal, who owns a stake in Twitter through his Kingdom Holding Company, rejected Mr Musk’s offer last month, saying it did not “come close to the intrinsic value of Twitter given its growth prospects”.

If Mr Musk’s acquisition leads to “corporate success by bucking the trend toward curated and managed speech”, it will bring “greater diversity to the social media experience”, Mr Simington said.

“And, as this experiment is clearly lawful, I for one look forward to seeing what comes of it.”

Updated: May 02, 2022, 6:01 PM