Twitter scores legal hat trick with three cases filed against it in one day
Germany alleges systemic moderation failure, more vendors sue over unpaid bills, and a new WARN Act suit
Twitter is facing a trio of legal challenges this week: German officials are going after the platform for not adequately handling user complaints, four vendors sued over unpaid bills, and another group of laid-off employees claim they were terminated without proper notice.
Just another Tuesday at Elon's Twitter Towers.
The hat trick of new legal issues could spell trouble for Twitter, which hasn't ever been the most profitable venture, and according to new owner Elon Musk was hemorrhaging millions of dollars a day and risking bankruptcy without a clear path to profitability.
A path, mind you, that Musk hasn't exactly set a course for. He's alienated advertisers and developers, stopped paying bills, and it's unclear if anyone beyond the most hardcore Musk fans are willing to pay the $8/month for Twitter Blue, the company's paid verification scheme.
Don't mess with German hate speech laws
The German Federal Office of Justice (BfJ) said yesterday that there were "sufficient indications of failures" in Twitter's complaint management process that lead it to believe the issues were systemic, and as such subject to a fine under the country's Network Enforcement Act.
Per the BfJ, the Twitter posts in question were published over a period of four months, and contained "similar, unjustified, defamatory statements of opinion, all of which [were] directed at the same person."
The BfJ said Twitter was notified by multiple users of the offending content, but failed to remove it as required under German law, which stipulates that any speech listed in the Criminal Code is also illegal online. German law requires social media companies to remove such content within seven days of notification, or within 24 hours "in the event of obvious illegality."
Fines levied under the Network Enforcement Act can reach up to €50 million ($54.7 million, £43.8 million). Forbes noted that no fines have ever been levied under the rule as the threat of such a penalty has always been enough to spur platforms to action in the past.
Separately, the EU has expressed concerns that Twitter may be violating moderation rules included in the Digital Services Act, so don't be hugely surprised if there's more European action taken against Musk's platform in the near future.
Onward to class action junction
Shannon Liss-Riordan, a Boston labor lawyer who has twice run for public office in the state on the Democratic ticket, has been going after Twitter since layoffs began shortly after Musk took control of the company.
This latest pair of proposed class action suits is no different. Liss-Riordan is listed as an attorney on both of the suits filed yesterday in the Northern District of California Circuit Court.
- Twitter blocks Pakistan government account, boosts state-run media from Russia and China
- Paid and legacy Twitter verification now indistinguishable
- Judge grants subpoena to ID Twitter source code leaker
- Musk said Twitter would open source its algorithm – then fired the people who could
The first [PDF] sees a quartet of vendors alleging Twitter breached their contracts by not paying invoices for services rendered in 2022, much of which was provided to the company prior to Musk's takeover.
White Coat Captioning, which provides captioning services for conferences and other events, alleges in the suit that it is owed $42,000 (£33,700). YES Consulting claims it provided leadership training to Twitter throughout 2022 and is owed $49,000 (£39,000). Cancomm LLC and Dialogue Mèxico, who Twitter contracted to provide PR and communications services in Mexico and South America, say they're owed approximately $140,000 (£112,000).
As we've documented previously, Twitter has been accused of not paying rent at its Market Square HQ and other offices, one consulting firm claimed the company owed it $2 million, and even a merch business has accused Twitter of failing to pay nearly $400,000 for branded swag.
The suit acknowledges those other unpaid bills, saying that "many vendors and contractors who have not received payment under their contracts are, like Plaintiffs, small businesses without the resources, time, and money to litigate these claims on their own."
As for the other suit [PDF], which alleges Twitter contract employees were improperly terminated, Twitter and Musk are in familiar territory – it's the fourth such lawsuit a Musk-owned company has faced since 2014.
The proposed class action alleges that Twitter violated both the federal and California state WARN acts, which require companies with over 100 employees (Twitter still has more than that, right?) that lay off 50 or more at a time to provide 60 days of notice prior to the move. Alternatively, the company can pay terminated employees in lieu of a notice, which the suit alleges wasn't done.
We asked Twitter for a response and received the same one everyone else has been getting of late: a single poop emoji. ®