Musk Cancels Twitter Deal Some More

What if Elon Musk had never made a hostile bid to buy Twitter Inc.? What if Twitter was just bopping along, being a public company, and then one day its former head of security, Peiter “Mudge” Zatko, sent a bunch of regulators a whistle-blower letter saying that Twitter’s security was bad in various ways, that it failed to safeguard user data and was vulnerable to hackers and was generally sort of sloppy about stuff? Obviously some things would happen:

What would be the aggregate impact of all of those things? Well, I don’t know; it depends on how true and how serious Zatko’s claims turn out to be. Twitter denies and downplays them, while Zatko has incentives to play them up. But so far my sense is that all of this is pretty ordinary-course stuff. If you are a large social media company, there will be internal controversies about your information-security and content-moderation practices; every big social media company faces tradeoffs there. The people who lose out in those controversies will have incentives to go public as whistle-blowers, and then regulators and politicians will have incentives to investigate and extract settlements. None of this is existential; none of it is, like, “90% of Twitter users are bots and so advertisers will all leave,” or “Twitter sold all of its users’ Social Security numbers to North Korean hackers so the users will all quit,” or “Twitter is operating illegally and will be shut down by the government.” And most of it is pretty hypothetical, more “Twitter’s practices create risks of something really bad happening” than “something really bad has actually happened.”