Twitter layoffs trigger oversight risk warning from Brussels

In another move that’s being frowned upon by European Union regulators, Elon Musk-owned Twitter has closed its Brussels office per a report in the Financial Times — citing sources with knowledge of the departures.

Staffers in the office were focused on European Union digital policy, working in close proximity to the seat of power of EU’s executive, the European Commission — an entity with an ongoing role in EU lawmaking. The Commission will also soon take on a major new oversight role for the bloc’s updated digital rulebook, the Digital Services Act (DSA).

Given the obviously strategic function of the Brussels office, its termination could be interpreted as either a major strategic blunder by Musk, if he’s failed to understand the importance of having an policy presence at the heart of the EU to influence lawmakers and law enforcers — or a very obvious (and intentional) snub to the bloc and its regulations that signals bad news ahead for Twitter’s compliance with regional laws.

Either way, the Commission does not appear to be taking the development lying down.

In fresh remarks today, following the latest Twitter layoff revelations — and following a visit by an EU commissioner to Twitter’s Dublin office (which does, for now, still exist) — the EU’s executive has given the clearest indication yet that it could appoint itself as overseer of the bird site’s compliance with the incoming DSA.

If that happens, Musk’s regulatory risk in Europe will really take flight. So the stand-off is real.

Bye bye Brussels?

According to the FT, the last two remaining Twitter public policy staffers, Julia Mozer and Dario La Nasa — who its reporting says were in charge of the company’s digital policy in Europe — departed Twitter last week, resulting in the Brussels office being entirely disbanded.

Since Musk took over the social media firm, Twitter’s comms team has not responded to press requests seeking comment so it was not possible to obtain an official confirmation of the closure of the office.

We were also unable to reach either Mozer or La Nasa at the time of writing to confirm the FT’s reporting. Neither appear to have tweeted about leaving the company — nor updated their LinkedIn profiles to announce a change of job as yet.

The newspaper reports that other Twitter policy staffers left the small Brussels office at the start of the month — as part of an earlier global headcount cull by Musk, who reportedly moved to slash 50% of jobs earlier this month. Further smaller layoffs have followed.

Last week, Politico reported that another Brussels-based Twitter staffer, Stephen Turner — who, per his LinkedIn profile, had worked at the company for over six years, most recently as Twitter’s EU public policy director — was among the employees laid off by Musk.

Turner tweeted Monday week that he had “officially retired from Twitter”. “From starting the office in Brussels to building an awesome team it has been an amazing ride,” he added, describing himself as “privileged and honoured” to have worked with “the best colleagues” and “great partners”.

Turner could not confirm any more recent departures from his former office but he was able to tell us there had been a total of six staff working in Brussels prior to Musk’s Twitter takeover — only two of whom were left when he departed last week (which aligns with the FT’s reporting of no Brussels office left following the departures of the last remaining employees).

So, er, the big question now is WTF happens next for Twitter’s ability to engage with EU rules?

The Brussels-based European Commission will shortly begin overseeing regulation of large Internet platforms under the incoming DSA — a major update to the bloc’s digital rulebook that will definitely apply to Twitter. Although the company could — and perhaps, on paper, should — avoid centralized enforcement by the Commission itself which is supposed to take on that role only for so-called very large online platforms (aka VLOPs), with more than 45M users in the region. (Otherwise the job falls to authorities within EU member states — or to a lead authority in the case of a business having a main establishment in the EU.)

But large-scale layoffs at Twitter have led to rising concern at the Commission and among other EU regulators that it will be unable to comply with major EU laws — covering areas like illegal content removals (as the DSA does) or data protection (under the General Data Protection Regulation; GDPR). Which is driving Brussels to adopt a more aggressive tone toward Twitter.

Earlier this month, Twitter’s lead data protection regulator in the EU — Ireland’s Data Protection Commission — also sought a meeting with the company after a trio of senior compliance staff resigned. But, for now, EU data protection authorities appear to be keeping their powder dry and opting to monitor developments.

There’s more, though. Twitter is signed up to two voluntary EU codes, established by the Commission — starting back in 2016 — one to combat the spread of online hate speech; and a separate code focused on fighting online disinformation.

Under Musk, Twitter’s compliance with commitments its prior leadership made under the latter disinformation code already look like a joke, as we’ve discussed before.

While, today, the Commission released details of the seventh evaluation of the Code of Conduct on countering illegal hate speech online — which it said shows a general slow-down of progress across almost all signatories compared to the last two annual reviews. Including at Twitter.

Twitter’s performance was among those that declined vs reviews in 2021 and 2020, with the evaluation finding the company removed 45.4% and 49.8% of illegal content reported to it (so a drop of 4.4 percentage points in takedowns) — although it’s worth noting that this assessment took place between 28 March and 13 May 2022, which was prior to Musk’s takeover (which closed at the end of October). So it remains to be seen whether Musk’s approach will boost Twitter’s performance on hate speech takedowns or accelerate this slide.

Coincidentally (or not), he tweeted yesterday to claim a big reduction in hate speech impressions — which he suggested are “down by a third” vs the levels seen during a recent surge immediately after he took over the platform. So it’s a rather qualified brag tbh.

It will certainly be interesting to see whether independent evaluations stand up or knock down Musk’s hype about his own impact on purging hate speech.

The next Commission review of the EU’s hate speech Code isn’t officially scheduled to take place for another year — although the EU said today that it plans to talk with signatories (or at least those who will meet with it) to encourage “implementations” that support compliance with the incoming DSA which it also noted might lead to a revision of the Code of Conduct in the course of 2023. So Musk’s actions (or inaction) will very likely be shaping outcomes here.

Regulators buckle up

It’s clear that disruptions at a number of major tech platforms are causing growing concern in Brussels that its regulators are in for a bumpy ride.

“I am concerned about the news of firing such a vast amount of staff of Twitter in Europe,” V?ra Jourová, the EU’s vice-president in charge of compliance with the code on disinformation, told the FT. “If you want to effectively detect and take action against disinformation and propaganda, this requires resources. Especially in the context of Russian disinformation warfare, I expect Twitter to fully respect the EU law and honour its commitments. Twitter has been a very useful partner in the fight against disinformation and illegal hate speech and this must not change.”

Earlier this week, the Irish Times also reported that the EU’s justice commissioner, Didier Reynders, would be meeting with Twitter and Meta officials in Dublin following major layoff announcement at both companies. And he briefed the newspaper that tech firms risk big fines if they fail to comply with the bloc’s rules.

Tweeting today, following his meeting with Twitter, Reynders reiterated that its recent layoffs are “a source of concern” for the EU. He also said he had used the meeting to “underline” the Commission’s expectation that Twitter will comply with both its voluntary commitments (under the aforementioned codes) and with legal requirements attached to EU laws like the GDPR and the DSA.

“We have always been clear that we expect online platforms to comply with their obligations and commitments under EU law and rules,” a Commission spokesperson also told us when we sought comment on Twitter layoffs earlier this week. 

Following Reynders meeting with Twitter today, the Commission issued further remarks — and dialled up its rhetoric.

In what looks like a direct shot across Twitter’s bows, vis-a-vis its DSA risk — and the clearest signal yet that the Commission will designate Twitter a very large online platform (aka VLOP) and oversee its compliance in Brussels — it said: “For those platforms that the Commission will designate as very large online platforms, the risk management obligations also include a strong component on the appropriateness of the resources allocated to managing societal risks in the Union. Among other matters, the Commission will scrutinise the appropriateness of the expertise and resources allocated, as well as the way they organise their compliance function.”

For “appropriateness of the expertise and resources allocated” read: ‘Shuttering local offices and canning EU staff will be frowned upon — hard.’

“All companies who offer their services in the Union will have to comply with the rules in the DSA,” the Commission also reiterated.

“We believe that ensuring sufficient staff is necessary for a platform to respond effectively to the challenges of content moderation, which are particularly complex in the field of hate speech. We expect platforms to ensure the appropriate resources to deliver on their commitments,” it added, pointing to the latest assessment of platforms’ actions under the hate speech code and the “slowdown in progress for most of the participating companies, including Twitter” as a “worrying trend”.

Collision course

On any standard business logic playbook, Twitter choosing this moment to shutter its Brussels policy office looks baffling — as it means the firm won’t have a local presence to lobby for its interests as lawmakers-cum-regulators take major decisions that will affect its business and could result in expensive outcomes like big fines coming down the pipe.

What Twitter does next with its Dublin office will be one to watch — so whether staff there will face further layoffs. Or — on the flip side — whether Dublin will become Musk’s chosen hub for responding to all EU regulatory matters in an attempt (likely futile) to sideline the Commission.

Musk cannot necessarily pick his preferred EU regulatory hub, either.

Earlier this month, a well-placed source suggested Twitter is already in breach of “main establishment” requirements under the GDPR’s one-stop-shop mechanism — which (currently) enables it to streamline oversight by dealing with a single privacy regulator in Ireland — rather than facing a regulatory free-for-all with any data protection authority across the EU competent to raise concerns affecting local users and pursue enforcement in its own market. (Which could lead to multiple fines being fired at it from privacy regulators around the EU.)

At the meeting with its lead privacy regulator last week, Twitter told the Irish DPC it had appointment a replacement data protection officer — a role that’s a requirement under the GDPR — naming an existing privacy staffer who’s attached to its Dublin office — as its new “acting” DPO.

Other Ireland-based employees remain critical to the company’s claim to have main establishment in Ireland — and thereby to its ability to simplify its GDPR compliance burden. So were Musk to shut down its Dublin operation entirely it would be impossible for Twitter to present even a veneer of ‘compliance as usual’ as regards data protection — again leading to an immediate amping up its regulatory risk.

So there’s now a looming prospect for Musk of double regulatory trouble in Europe — under both the GDPR and DSA. And no clear path to him avoiding a painful regulatory reckoning as he charts a collision course with EU law.

If the Commission elects to designate Twitter a VLOP under the DSA the business will face an accelerated compliance timetable with oversight kicking in in February next year — rather than in February 2024 — and with a tougher set of requirements to assess and mitigate risks on its platform.

All that compliance requirement — with far fewer staff… is… just obviously going to be a total car crash

Fines under the DSA scale up to 6% of global annual turnover. While, under the GDPR the regime already allows for fines up to 4% for major breaches. So if Twitter isn’t bankrupt yet is may just be a matter of time before its owner’s recklessness toward legal risk finishes the job.

What happens next is anyone’s guess but one former Twitter employee with knowledge of how the company managed compliance issues prior to the Musk takeover suggests the philosophy he’s applying amounts to an attitude of “we’re above the law” — or “we think the laws are stupid so we’re not going to comply”.

If that analysis is correct, the EU’s shiny new digital rulebook really is facing the ultimate ‘move fast and break things’ test — and it’s coming very, very fast.

Twitter layoffs trigger oversight risk warning from Brussels by Natasha Lomas originally published on TechCrunch