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Elon Musk and Twitter fight over India's importance and standoff with govt

In a court filing, Tesla CEO Elon Musk said that Twitter initiated litigation against Indian government, without obtaining consent, and placed the firm's 3rd largest market at risk. Twitter denied the claims

August 05, 2022 / 04:42 PM IST

Twitter's high-stakes standoff with the Indian government has found a mention in another high profile legal battle involving Tesla CEO Elon Musk over his termination of a $44-billion deal to acquire the social media firm.

In a court filing, Musk said that Twitter "initiated risky litigation" against the Indian government, without obtaining consent, thereby placing the social media firm's third largest market at risk, which constitutes a material breach of the merger agreement. Twitter however denied these claims.

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These submissions were disclosed in Twitter's response filed in Delaware's Court of Chancery on August 4 against counterclaims made by Musk. Musk had filed counterclaims in the court on July 29 in response to Twitter's July 12 lawsuit that seeks to enforce the $44-billion merger agreement.

The response was made public by Twitter chairman and Salesforce co-CEO Bret Taylor on the social media platform, who said his counterclaims are "factually inaccurate, legally insufficient, and commercially irrelevant".

Last month, Twitter had filed a petition at the Karnataka HC, seeking relief from some of the blocking orders issued by the Ministry of Electronics and Information Technology (MeitY) under Sec 69A of the IT Act, 2000.

Twitter had mentioned in their petition that the blocking orders did not meet the requirements of Sec 69A, that MeitY was disproportionately using its power by asking Twitter to block accounts in its entirety. The next hearing in the case is slated on August 25.

In the US court filing, Musk submitted that while he is a ‘proponent of free speech’, he believes that moderation on Twitter should "hew close to the laws of countries in which Twitter operates".

He also submitted that Twitter "failed to disclose litigation and investigations by the Indian government and any such investigation could lead to suspensions or interruptions of service in that market which could cause a material adverse effect to the company".

Twitter admitted that it did not discuss its interactions with the Indian government with the defendants Musk and his affiliated entities, since the merger agreement didn't require this disclosure, but denied any investigation by the government.

The company mentioned that its own transparency disclosures have "heavily documented the company's interactions with Indian regulators" since the new IT rules came into effect last year, including requests by the Indian government that Twitter block certain accounts or otherwise moderate content.

It also pointed out that Musk had not mentioned the dispute over blocking orders as the basis for deal termination until filing the counterclaims.

It also denied that India is their third largest market, without providing any specific details. While Twitter doesn't provide a country-wise breakup of its user base, the social media firm had 23.6 million users in India as of January 2022, making it the company's third largest market after the United States and Japan, as per market research firm Statista.

“Twitter admits that it brought a legal challenge against the Indian government and respectfully refers the Court to its July 5, 2022 petition to the Karnataka High Court…" the company submitted in a court filing.

Twitter further asserted that its legal challenge is "consistent with its global practice of challenging government requests or laws where such requests are not authorized or properly scoped under local law, are procedurally deficient, or as necessary to defend its users’ rights, including freedom of expression."

Moneycontrol has reached out to Twitter with queries in this regard and will update the story once a response is received.
Vikas SN
Aihik Sur covers tech policy, drones, space tech among other beats at Moneycontrol
first published: Aug 5, 2022 04:34 pm