Elon Musk is doing his best to walk away from the acquisition deal he imposed on Twitter, but not before he takes a good long look at some of the company’s confidential user data first.
A lawsuit Twitter filed against Musk in Delaware earlier this week revealed that the billionaire and his team have had access to at least 49 tebibytes of internal data since June 15.
The so-called “firehose” data consists of a real-time record of the more than 500 million tweets posted each day, including information about the device used to send a tweet and the account that authored it. (It reportedly does not, however, include personally identifiable information like users’ IP addresses, phone numbers and other private data.)
And Musk’s team has been busy analyzing this newly-acquired info. Within two weeks of gaining access to the “firehose,” Twitter says Musk’s reviewers exceeded Twitter’s default 100,000-per-month limit on the number of queries that could be run on the data. At Musk’s request, the company says it then raised the limit a hundredfold to 10 million, “more than 100 times what most paying Twitter customers would get.”
The eccentric billionaire has previously said that anyone reviewing the data would be bound by a nondisclosure agreement and that Twitter’s information wouldn’t be retained or shared if the deal fell apart.
But given Musk’s record of allegedly ignoring these legal agreements in the past and his explicitly stated intent of launching a competitor service if the acquisition deal falls through, Twitter has good reason to be nervous.
The company didn’t respond to a request for comment from HuffPost, but did note in its suit that it has “very real concerns” about “safeguarding its customers’ data” and “how Musk might use the data if he succeeded in escaping the deal.”
“[NDAs] are notoriously hard to police in practice, leaving one to rely on Musk’s representation that ‘Scouts Honor, I won’t try to use it.’”
- Columbia Law School professor Eric Talley
Eric Talley, a professor at Columbia Law School who’s been closely following the Musk-Twitter saga, told HuffPost in an email that no matter how elaborate the NDA, “they are notoriously hard to police in practice, leaving one to rely on Musk’s representation that ‘Scouts Honor, I won’t try to use it.’”
“This is one of the biggest worries that target companies have: that a buyer walks away with detailed knowledge of their ‘secret sauce’ and then uses it to compete with or otherwise undermine them,” Talley said.
“In some cases, it might be possible to find fingerprints of such use (e.g., in source code), but that itself is tricky business,” he continued. “And, other uses of this information would be even harder to ferret out, since they need not involve any copying ― for example, the data might simply help Musk determine what *not* to do in setting up his own platform.”
If Musk ends up walking from the deal but has to pay a hefty fine in the process, he might launch a competitor simply out of spite, informed by what he learned peeking behind the curtain at Twitter.
According to Talley, that prospect could potentially even lead the Delaware Court of Chancery to force Musk to consummate the seemingly least attractive outcome for both parties: going through with the deal.
“Concerns about the NDA (and whether he’d live up to it) could complicate matters, possibly forcing the parties into what otherwise might seem to be a less attractive settlement to everyone,” Talley said. “Musk going through with it (at a slightly reduced price), taking ownership, and attempting to staunch the defections by employees and customers.”