Elon Musk’s Twitter poll says he should step down as chief executive – as it happened

Here’s a quick summary of what’s happened today in business news:

• Elon Musk’s fate as Twitter CEO is uncertain after he released a poll asking Twitter users whether he should step down as head of Twitter. Over 57% of 17.5m users who voted said that he should. Though Musk said he would abide by the results of the poll, he has not made any announcements regarding plans to step down.

• A union representing Twitter staff in the UK cautioned that even if Musk steps down as CEO, he would still be owner of the company.

• UK spring budget will be delivered on 15 March, chancellor Jeremy Hunt announced today.

• The US Federal Trade Commission announced a settlement with Epic Games, the maker of popular video game Fortnite, for a total $520m. The agency said the company violated child privacy protection laws.

We’re pausing this blog for now but will return if any news around Musk and Twitter arises. Thank you for reading.

Two California-based employees are accusing Tesla of retaliation after they were fired while participating in a group that was drafting letters critical of Tesla CEO Elon Musk. The employees filed a complaint with the National Labor Relations Board last week, according to Bloomberg.

The letters drafted by the group asked company executives to reconsider Musk’s return-to-office police, saying that they violated Tesla’s anti-harassment policy. Both employees were fired in June – one was told that their discussions on Tesla were “an attack” on the company.

A week after his arrest last Monday, former FTX chief executive Sam Bankman-Fried is appearing in court in the Bahamas, where is being held in custody. While Bankman-Fried had indicated he would fight extradition charges, it seems that he could agree to an extradition, according to CNN.

In court on Monday, Bankman-Fried asked to see a copy of his indictment and then was granted a phone call with his US-based attorneys.

Bankman-Fried faces eight charges of conspiracy and fraud for his actions at FTX and private equity firm Alameda Research.

The European Union is accusing Meta of violating antitrust rules by “distorting competition in the markets for online classified ads”, the European Commission said on Monday.

The commission said that it “takes issue with Meta tying its online classified ads service, Facebook Marketplace, to its personal social network, Facebook,” it said in a statement. It is also accusing Meta of imposing unfair trading conditions to its competitors of Facebook marketplace.

The tie, it says, “gives Facebook Marketplace a substantial distribution advantage that competitors cannot match”.

The commission said its statement of objections to Meta is a “preliminary view” after it opened an investigation into the company in June 2021 but does not prejudge the outcome of the investigation. It is unclear when the investigation will end as there is no legal deadline for an antitrust investigation.

US senator Elizabeth Warren sent a letter to the chair of Tesla’s board of investors Robyn Denholm Sunday night saying Elon Musk may not be the fully dedicated CEO the company needs.

“As you know, it is the legal obligation of Tesla’s board to ensure that its CEO is meeting all his legal responsibilities as an effective leader,” Warren wrote, according to the New York Times.

Warren inquired whether Musk sending Tesla employees to work at Twitter – at least 50 Tesla employees were pulled into Twitter since Musk took over at the end of October – is harming the company. She also suggested that Musk could be using one company to benefit the other, for example charging Tesla more for ads or readjusting Twitter’s algorithm to benefit Tesla, what could be antitrust violations.

“The problems identified in this letter are not merely theoretical,” Warren wrote, noting that Tesla’s stock has fallen as Musk conducted over his takeover of Twitter. She said there could be “significant legal questions” about the relationship between the two companies in the future.

In a tweet on Epic Games settlement with the US Federal Trade Commission (FTC), the company’s CEO Tim Sweeney said the settlements reflect how American regulatory practices are changing.

“Developers should dig into the topic, as this settlement reflects state of the art American regulatory practice,” Sweeney said.

While Epic Games is framing the settlement as a change in regulatory practices, the FTC says that the company knew the children were playing without parents’ consent.

“Firms cannot put growth and revenue over the safety and privacy of their users, especially children and teens,” said FTC chair Lina Khan in a series of tweets. The company “put children and teens at risk with privacy invasive default settings”.

“Notably, our complaint states that these default settings caused substantial harm and constituted ‘unfair’ practices against both kids and teens,” she said.

Epic Games, which the US Federal Trade Commission (FTC) just announced agreed to pay $520m in settlements over privacy law violations, released a statement on the settlement saying “no developer creates a game with the intention of ending up here”.

“The video game industry is a place of fast-moving innovation, where player expectations are high and new ideas are paramount,” the statement said. “Statutes written decades ago don’t specify how gaming ecosystems should operate. The laws have not changed, but their application has evolved and long-standing industry practices are no longer enough.”

“We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players,” the company said.

This is Lauren Aratani in New York taking over.

Epic Games, the creator of the popular video game Fortnite, is agreeing to pay the US Federal Trade Commission (FTC) a total of $520m for two settlements after violating children’s privacy law, the FTC announced this morning.

The agency said the video game maker “deployed design tricks, known as dark patterns, to dupe millions of players into making unintentional purchases.” The company is agreeing to pay two settlements: $275m for violating the agency’s Children’s Online Privacy Protection Act, which bans companies from disclosing, collecting or using information from children under 13 and $245m as a refund to consumers for “its dark patterns and billing practices”. The FTC said the settlements are the largest monetary penalty for violating the privacy protection act and the largest refund in a gaming case.

“Epic used privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children,” FTC chair Lina Khan said in a statement. “Protecting the public, and especially children, from online privacy invasions and dark patterns is a top priority for the commission.”

Fortnite gained popularity in 2018, generating Epic Games $9bn in the game’s first two years of existence.

Wall Street has been trading for about half an hour, and Tesla shares have enjoyed a small bump.

The carmaker’s value was up by 1.7% at the time of writing at $152.72 – less than the 4.5% move at one point in pre-open trading.

Of course, that does not make up for the large losses endured by shareholders this year, but with a stock of this size it does mean a $5bn gain – Musk’s 13% shareholding would equate to about $650m in paper valuation. That would not be a bad return for most Twitter polls.

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Former Meta chief operating officer Sheryl Sandberg and Nextdoor boss Sarah Friar would make for good candidates to lead Twitter, says the Financial Times’s Lex column.

Sandberg announced her resignation from Facebook in June, after transforming it into one of the biggest advertising companies in the world. She was seen as an “adult in the room” beside founder Mark Zuckerberg. Perhaps the same steadying hand could help at Elon Musk’s company.

Friar was previously finance boss at Square, the payments company set up by Twitter founder Jack Dorsey, so the FT (£) reckons she could help with Musk’s aims for Twitter to become a “superapp” offering payments, among other things. A rare Northern Irish (she’s from County Tyrone, if you’re asking) transplant to California, she also has Goldman Sachs, McKinsey, and the universities of Oxford and Stanford on her CV.

There is also a sting in the tail of the FT’s piece: it reckons that Twitter’s valuation is only just over a third of what Musk and his backers actually paid. That is value destruction to rival Tesla during 2022.

Valued at about three times trailing revenue (equal to similar-sized peer Snap), Twitter’s enterprise value would now be just $15bn.

So who is likely to take over from Musk as CEO of Twitter?

TechCrunch editor at large Mike Butcher says it’s likely to be someone quite “commercially minded” from Silicon Valley that can put Twitter on an “even keel.”

Butcher says no one thought Musk was going to stay in the job forever, and was likely under pressure from Tesla’s board, who have watched shares plunge following a string of controversies linked to his takeover of Twitter.

He said it’s very likely that Musk will leave, it’s just a matter of when.

Mike Butcher, editor at large at TechCrunch, tells Sky News that it’s very likely that Musk had a plan already in place before he issuing the Twitter poll.

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Elon Musk is very mercurial so it’s very hard to tell whether or not he’ll actually abide by the poll, but it’s more likely that he already had a plan ahead of doing that poll.

It’s not quite clear what that plan is exactly, but Butcher notes that Musk issued the Tweet after landing in Qatar for the World Cup final. He says Musk “most certainly” had talks with investors, given he has backers in the region who helped him take over Twitter in the first place.

One thing you can be sure of its that he’ll do whatever he wants…whether he’s said one thing earlier or not. It’s as simple as that. So we’ll have to wait and see.

In terms of current management teams, Butcher notes that Musk is surrounded by people who “do his bidding” and that there is no longer a board to really speak of. “So it’s really down to one man, pretty much all of it”.

The staff themselves have had to figure out what Twitter should be doing via his tweets rather than through any internal communications, as might normally happen inside any “normal company”

It’s been a “totally chaotic period under Musk’s leadership”, Butcher adds.

A union which represents some of Twitter’s UK staff says that even if Musk does honour the poll and steps down as CEO, the social media firm’s strategy is unlikely to change given he still owns the company.

Furthermore, the way Musk hinged his decision on the outcome of an online poll is yet another sign of the “deep issues” plaguing the company under his watch, according to the Prospect union’s general secretary Mike Clancy.

Clancy said in a statement:

This latest erratic behaviour by Elon Musk, once again underlines the deep issues over the way this company is being run.

Whether or not Musk carries through on this vote, and is the chief executive going forward, he will still own the business. This means it seems highly doubtful that we will see a sea change in strategy.

The way that Twitter under Musk has treated its staff has been appalling, riding roughshod over the principles that underpin UK employment law.

What is needed is a fundamental change in approach, rather than more attention seeking, knee jerk decision making.