The Emergence of Meta’s Threads and Its Legal Implications

Released less than two weeks ago and gaining 100 million users in five days, Meta’s Threads—a text-based social media platform—continues to make waves across the world. However, its copyright dispute with Twitter and lack of transparency in data collection loom over the app’s rising popularity on the Internet and in real life.

Twitter as the reigning text-based microblogging platform

Unlike various social media platforms such as TikTok and Facebook, Twitter has been holding its own as the primary choice for short text-based blogging where users would post “tweets” with a limit of 500 characters. The social caliber Twitter yields is “an all-consuming obsession for those working or merely interested in politics, sports, and journalism around the world… What it lacked in profits it more than made up for in influence.

At the same time, Twitter mirrored other social media platforms in that they ran advertisements and collected user data for third-party users to generate revenue. However, since its inception, Twitter was known to be an unprofitable social media platform due to its inability to “monetize its large user base into revenue gains” and “dealing with expenses [such as]… stock-based compensation and data operations costs.

Twitter’s decline under Musk’s management

And so, when Tesla CEO Elon Musk took over Twitter for the price of $44 billion USD and made the platform into a private company, his immediate focus was increasing Twitter’s revenue through cost-saving measures like refusing to pay Twitter’s bills with contractors and laying off “80% of Twitter’s staff.” Despite such drastic measures, Musk’s management of the social media platform ultimately upended his reputation and the company as a whole by antagonizing journalists and other creators central to the app’s success, overhauling policies that jeopardize Twitter’s safety and reliability, and scaring away vital advertisers. The remaining employees at Twitter after the extensive rounds of lay-offs resorted to “tweeting pictures of their sleeping bags on the floor” following Musk’s announcements of new product changes in Twitter.

However, one particular product of Musk’s, Twitter Blue—a monthly subscription of $7.99 USD that allows for accounts to have a “verified” blue checkmark and access to new features—soon became another factor that contributed to the rise of Meta’s Threads as a popular alternative. As the blue checkmark on social media platforms like Twitter and Instagram functions as “a recognizable online status symbol that was universally understood to authenticate influential accounts on the platform,” Twitter Blue undermined the social significance of a blue checkmark by making it available for a visible price. What once was a sign of authentication and recognition of the influence wielded by the verified user rapidly transformed into a cheapened subscription that has dire consequences for Twitter’s credibility and reputation among various social media platforms.

In his attempt to raise Twitter’s low revenue through paid blue checkmarks, Musk did not appear to have a cohesive plan of ensuring that all high-profile figures will pay for their blue checkmarks as many reported not wanting the new checkmarks imposed on their accounts at no charge. Some celebrities who were given a blue checkmark without paying quickly associated their badge as a symbol of “shame or embarrassment,” while other users displayed their checkmark as a sign of support for Musk’s leadership of the social media app.

Twitter Blue’s existence also elevated Twitter’s hostile environment as now users can easily impersonate high-profile accounts such as large organizations or public figures. As the blue checkmark often carries a connotation of trust and validity on these platforms, some users took advantage of Twitter Blue by changing their usernames and profile pictures of high-profile figures to legitimize their impersonation.

Pharmaceutical giant Eli Lilly was a prime example of such impersonation that led to catastrophic financial consequences when a verified account featuring Eli Lilly’s name and logo tweeted: “We are excited to announce insulin is free now.” Even though the impersonating tweet was soon deleted by Twitter, the ensuing uproar on Twitter was felt by both the real Eli Lilly and the overall Twitter community. The real Eli Lilly found themselves in a panic from the international coverage a mere impersonator’s tweet had created before immediately removing Twitter in general as a part of its social media campaigns within a few days. This decision did not come lightly as Eli Lilly had essentially given up the monthly cost of $8 and the potential of making millions from ads on Twitter.

However, a former senior communications officer at Eli Lilly, Amy O’Connor raised a particular point: “What’s the benefit to a company… of staying on Twitter? It’s not worth the risk when patient trust and health are on the line.” Despite numerous pleas to remove the mentioned tweet by Eli Lilly and other accounts, Twitter took their time to remove the impersonating account from the massive rounds of lay-offs—including a majority of their communications team. According to Jenna Golden, a former Twitter worker in its political and advocacy ad-sales team, Musk’s management ultimately “decimated some of the last lingering bits of trust among advertisers in the platform” as Twitter was already on the lower end of the social media platforms for advertisements in comparison to performance and outreach.

And now, Twitter users found themselves forced to shell out additional payments to view over 1,000 tweets if they are not verified under Musk’s overall leadership and aim of making Twitter profitable. The rampant misinformation that accompanied Musk’s leadership and Twitter Blue made it clear to advertisers and fellow users that Twitter no longer valued accurate information and user experience, but rather focused on generating revenue through all possible means.

Rise of Twitter’s latest competition, Threads

Despite the existence of other text-based microblogging platforms like Blue Sky and Mastodon, Twitter reigned supreme despite Musk’s implementation of restrictions such as Twitter Blue and limiting the number of tweets viewed by unverified users. Twitter’s position as the reigning text-based microblogging is on shaking grounds with Mark Zuckerberg’s introduction of Threads and Elon Musk’s controversial leadership.

Launched while Twitter’s viewing limits are implemented by Musk, Meta took advantage of Twitter’s growing controversies and problems to introduce Threads as “[Meta’s] response to Twitter” which many have dubbed as a “Twitter killer.” Instagram’s head of product, Adam Mosseri recognized the opportunity of creating a new product out of the “volatility” and “unpredictability” Twitter undergoes with Musk’s leadership. Furthermore, Mosseri acknowledged Twitter’s “pioneer[ing of] the” text-based microblogging space, but added that “there was an opportunity to build something that was open… and good for the community that was already using Instagram.” The particular opportunity mentioned by Mosseri was also observed by Meta’s chief product officer who stated: “We’ve been hearing from creators and public figures who are interested in having a platform that is sanely run, that they believe that they can trust and rely upon for distribution.”

The primary difference between Twitter and Threads is that for a person to create an account on Threads, they must integrate their existing Instagram to create a Threads account; while Twitter requires a mere phone number to sign up as a way of avoiding bots and spam. In addition, Threads appeared to take note of Twitter’s verification system implemented under Musk where there are 2 possible methods of receiving a checkmark on Meta’s platforms:

Having a more tedious verification process allows for decreased impersonations and misinformation on Threads. On the other hand, Twitter does not have an extensive process for granting blue checks to users who subscribe to Twitter Blue; as long as they have a phone number, they are eligible to receive a blue checkmark.

By learning what worked and did not work for Twitter under Musk’s supervision, Threads was able to thrive—reaching 100 million users within 5 days and becoming the most rapidly downloaded app ever. Following Threads’ launch, CloudFlare’s CEO, Matthew Prince tweeted a screenshot of the traffic on Twitter and noted that it was “tanking.” The growth in Threads’ users also stemmed from the seamless sign-up process where users already had existing accounts on Instagram, retaining some of their followers from Threads’ sister app.

Legal Concerns with Threads

Despite its status as a strong competitor to Twitter, Threads still faces several hurdles as a new platform in terms of potential legal issues. One particular issue is Threads’ delayed launch in the European Union, implicating the EU’s Digital Markets Act (DMA) as the reason for the delay. The majority of tech companies view the DMA as a deterrent to innovation as the DMA requires “onerous user protections,” forcing these companies to reassess their user protection before launching their respective platforms. And so, since Meta stated that it will launch “branded content” tools for Threads eventually, Meta has to reevaluate how Threads operates with consideration to the DMA by the time advertisements and other monetized content will be a reality.

The DMA aims to regulate “large technology platforms” by preventing Big Tech companies like Google and Meta—identified as “gatekeepers”—from abusing their market power and allowing new companies to enter the market. One particular rule in the DMA is that gatekeepers are forbidden from tracking their users’ activity across the Internet for targeted advertising without explicit consent. Considering that the majority of the revenue for these social media platforms is from advertisements, Threads’ privacy policy does not differ from its various counterparts. However, it is the potential of “data mixing” that concerns the DMA where tech companies will combine “all of the data it collects on users to build advertising rules.” An instance of this was when German regulators ordered Meta to stop combining data from both WhatsApp and Instagram without user content, prompting the DMA to enact this rule upon all “gatekeepers.”

And so, Meta’s lack of transparency in its management of user data in the past is another growing concern for Threads’ future growth. Meta has a history of failing to adhere to standard privacy practices as it is currently under a Federal Trade Commission (FTC) “consent decree from previous improper collection and use of data in the United States” and was fined for its collection of user data without consent by the European Union. Associate professor Carissa Veliz at the University of Oxford’s Institute for Ethics in AI states: “Meta has not only not changed its business model, it continues to want to do targeted ads, essentially surveillance advertising.”

In today’s Internet age, data is everything: how users interact and view content, the duration of that interaction, their location, photos, cameras, the type of device, etc. And so, if there are no advertisements, the realization is that the user is the product. Such sensitive data about users regarding their health can be sent to third parties without users’ consent and knowledge as seen in the scrutiny Meta faces with regards to a case related to the Supreme Court of the United States’ overturn of Roe v. Wade. Meta was reportedly sharing Facebook messages with local police which aided in charging a pair of mother and daughter seeking an unlawful abortion in the state of Nebraska. And so, the skepticism toward Threads’ obligation to protect user data and privacy can be understood by many users and scholars.

One additional legal concern with Threads pertains to its rival, Twitter, who recently threatened legal action against Meta for the release of Threads. Alex Spiro, the attorney representing Twitter in this legal matter, stated that Meta has engaged in “systematic, willful, and unlawful appropriation of Twitter’s trade secrets and other intellectual property,” referring to Threads. In addition, Spiro also accused Meta of hiring numerous former Twitter employees who “had and continue to have access to Twitter’s trade secrets and other highly confidential information.” In response to Spiro’s accusation of Meta hiring former Twitter employees to work on Threads, Meta’s communication director, Andy Stone, posted on Threads: “No one on the Threads engineering team is a former Twitter employee—that’s just not a thing.” The Guardian delved into this even further, going through LinkedIn to determine if any recent Meta hires in 2022 previously worked at Twitter. However, it is quite normal for tech workers to switch from one tech company to another as they are within the same industry.

Legal experts stated that even though it is common for companies to accuse their competitors of stealing trade secrets and hiring former employees, such cases are difficult in their success. According to Polk Wagner, a law professor at the University of Pennsylvania, Twitter would have to show that Meta took information that was “economically valuable” and took “reasonable efforts” for the former to keep it secret. As “reasonable effort” has a range of definitions and connotations, identifying what a trade secret will prove to be difficult for Twitter’s end. Wagner adds on the difficult task of defining “reasonable effort”: “The courts are pretty clear that you can’t just wave your hands and say something is a trade secret. On the other hand, you don’t have to lock everything down so much that nobody can use this information.”

Reuters’ Jody Godoy further notes that 1 particular element courts look for in trade case cases is whether or not a company ensured that employees understood that the specific information was a trade secret or not. Law professor Sharon Sandeen asserts that many companies have lost trade secret cases as they claimed that employees were bound by broad agreements indicating that all company information is confidential. And so, courts have concluded that employees have no clear way of differentiating common company information from trade secrets. Due to the confusing nature of what constitutes a trade secret among large corporations, Wagner acknowledges that settlements are more common than trials.

Another legal battle on Threads’ ground is how its potential success could propel Meta into having a social media monopoly on the Internet. Meta has already faced an antitrust lawsuit by the FTC and 48 states aiming to block Facebook’s acquisition of Instagram and WhatsApp in 2020, but a revised version of that very same lawsuit is still ongoing. However, the cracks of what seemed to be an Internet monopoly in Meta are already cracking as Facebook’s user growth is stifled and the existence of other apps like TikTok. Washington Post journalist Will Oremus discusses Meta’s current position amidst the monopoly allegations and the rise of Threads: “[I]t’s an awkward look for Meta to be adding another major pillar to its social media empire at a time when the FTC is arguing it already controls too many.”

Nonetheless, there are existing arguments to say that Meta is not a monopoly as well. Facebook’s acquisition of Instagram and WhatsApp essentially “reduced competition by absorbing rival platforms,” but then Threads increases competition within the text-based microblogging space—directly competing with Twitter and other similar platforms. An additional argument Meta may raise is that Threads’ integration with Instagram cannot be the sole reason for Threads’ rapid growth. Meta has an extensive history of releasing unsuccessful applications and platforms like Threads, a Snapchat-like messaging app in 2019. Consequently, it can be argued that Threads’ popularity is from actual public interest and a recognition of needing a safe alternative to Twitter, rather than Meta’s supposed market power. With regards to Musk’s management and the uneasy changes in Twitter as a platform, Threads appears to be the favorable choice among the two due to its stricter verification process and safeguarding.

In conclusion, the majority of Threads’ legal implications lie dependent on its steady growth and retention for users in the future. Should Threads revise its privacy policy for the European Union, will it manage to maintain the hype that it once garnered from the world before? As the hype surrounding Threads eventually dies down, the true answer of Meta’s potential to actualize its monopolist power will be revealed to everyone—as well as its consequent legal concerns.

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