This analysis was first published in SvD Näringsliv, in Swedish, on April 28th, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.
After 15 years, Jack Dorsey is handing Twitter over to Elon Musk. Both men claim they have no financial stake in the service, and that they simply want to make the world better. The company’s history and near future suggest otherwise.
It took less than two weeks for one of the world’s most influential companies to change hands. From one billionaire to another.
Twitter is still, until the deal closes sometime before the end of the year, listed on the New York Stock Exchange. But regardless of the ownership structure, it has long been seen as co-founder Jack Dorsey’s company — even after he was pushed out of the CEO role by the activist fund Elliott Management at the end of 2021.
If you take him at his word, he would have preferred that nobody owned Twitter at all.
“In principle, I don’t believe anyone should own or run Twitter. It wants to be a public good at a protocol level, not a company,” he said in a tweet after news of the deal broke.
Those are big words from someone who has become extraordinarily rich from the opposite.
Anyone who knows Twitter’s history also knows that the company has, actively and for a long time, pursued the opposite of openness — including during the years Dorsey himself was CEO.
As early as 2012 you could see the conflict between building an open ecosystem for developers and building a sustainable business model. Twitter restricted its API — a way for other developers to build products on top of Twitter — to only support the company’s own priorities. In 2018 Dorsey closed off the ability for developers to build alternative ways of accessing the service on the same terms that Twitter itself used. The result was a consolidation of power that put Twitter’s needs first, at the expense of everyone around it.
What had first been likened to an open town square where anyone could speak freely began to look more and more like a private campus.
If we turn to Elon Musk, he has also painted noble motives around his interest in Twitter. At the TED conference in Vancouver earlier this year he said that “having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilisation. I don’t care about the economics at all.”
That may be so — Elon Musk is, after all, the richest person in the world according to Forbes. But entirely indifferent to the money behind it, he cannot really be.
A large part of the Twitter deal is financed by various loans totalling $25.5 billion, roughly SEK 250 billion. Interest rates are in a range of a base rate plus 3 to 10 percent. Assuming 5 percent as a rough calculation, the annual cost of the loans is higher than Twitter’s entire 2021 result. Add in a rising interest rate environment and the costs could become a real headache.
Elon Musk has a high net worth, but he is unlikely to want to sell shares in either Tesla or SpaceX to pay interest on the loans. So Musk’s stated ambitions of strengthening free speech are hard to disentangle from the economics of the company. He can of course raise revenue or cut costs to change the calculus, but this won’t be charity. At least not in the short term.
There are, however, other forces in the world pushing for the kind of public benefit that Dorsey and Musk claim to want — but coming from a very different angle.
Lawmakers within the EU reached agreement earlier this week on the DSA, the Digital Services Act. Among other things, the DSA requires companies like Twitter to explain how their algorithms decide what material is shown to users. On Tuesday EU Commissioner Thierry Breton commented drily on the looming deal:
“Elon, there are rules. You are welcome, but these are our rules. It is not your rules that will apply here.”
In principle, the transparency part should not be a problem for Musk — he has said he plans to do exactly the same thing. He wants everyone to be able to see how Twitter’s recommendations are made. But at a guess, he is not going to be quite as enthusiastic about the part of the DSA that requires platforms to prevent the spread of disinformation. Content moderation is a central part of Musk’s critique of Twitter today.
Lawmakers have — belatedly — started to catch up with the tech giants. The stated goal is to make the internet safer. A form of social improvement through technology, if you like. If Musk’s intentions are genuine, it should be possible to find common ground on some of this. But a safe bet is that he thinks there is a difference between making those decisions himself and being forced to by legislation.
