X

Meta plans to test and tinker with X’s community notes algorithm

community notes, facebook, Instagram, Meta, misinformation, Policy, threads, Twitter, X / Rejus Almole / March 14, 2025

Meta also confirmed that it won’t be reducing visibility of misleading posts with community notes. That’s a change from the prior system, Meta noted, which had penalties associated with fact-checking.

According to Meta, X’s algorithm cannot be gamed, supposedly safeguarding “against organized campaigns” striving to manipulate notes and “influence what notes get published or what they say.” Meta claims it will rely on external research on community notes to avoid that pitfall, but as recently as last October, outside researchers had suggested that X’s Community Notes were easily sabotaged by toxic X users.

“We don’t expect this process to be perfect, but we’ll continue to improve as we learn,” Meta said.

Meta confirmed that the company plans to tweak X’s algorithm over time to develop its own version of community notes, which “may explore different or adjusted algorithms to support how Community Notes are ranked and rated.”

In a post, X’s Support account said that X was “excited” that Meta was using its “well-established, academically studied program as a foundation” for its community notes.

Meta plans to test and tinker with X’s community notes algorithm Read More »

X’s globe-trotting defense of ads on Nazi posts violates TOS, Media Matters says

ad boycott, content moderation, elon musk, hate speech, linda yaccarino, media matters, online advertising, Policy, Social Media, Twitter, X, x ad boycott / Tim Belzer / March 12, 2025

“X conceded that depending on what content a user follows and how long they’ve had their account, they might see advertisements placed next to extremist content,” MMFA alleged.

As MMFA sees it, Musk is trying to blame the organization for ad losses spurred by his own decisions after taking over the platform—like cutting content moderation teams, de-amplifying hateful content instead of removing it, and bringing back banned users. Through the lawsuits, Musk allegedly wants to make MMFA pay “hundreds of millions of dollars in lost advertising revenue” simply because its report didn’t outline “what accounts Media Matters followed or how frequently it refreshed its screen,” MMFA argued, previously likening this to suing MMFA for scrolling on X.

MMFA has already spent millions to defend against X’s multiple lawsuits, their filing said, while consistently contesting X’s chosen venues. If X loses the fight in California, the platform would potentially owe damages from improperly filing litigation outside the venue agreed upon in its TOS.

“This proliferation of claims over a single course of conduct, in multiple jurisdictions, is abusive,” MMFA’s complaint said, noting that the organization has a hearing in Singapore next month and another in Dublin in May. And it “does more than simply drive up costs: It means that Media Matters cannot focus its time and resources to mounting the best possible defense in one forum and must instead fight back piecemeal,” which allegedly prejudices MMFA’s “ability to most effectively defend itself.”

“Media Matters should not have to defend against attempts by X to hale Media Matters into court in foreign jurisdictions when the parties already agreed on the appropriate forum for any dispute related to X’s services,” MMFA’s complaint said. “That is—this Court.”

X still recovering from ad boycott

Although X CEO Linda Yaccarino started 2025 by signaling the X ad boycott was over, Ars found that external data did not support that conclusion. More recently, Business Insider cited independent data sources last month who similarly concluded that while X’s advertiser pool seemed to be increasing, its ad revenue was still “far” from where Twitter was prior to Musk’s takeover.

X’s globe-trotting defense of ads on Nazi posts violates TOS, Media Matters says Read More »

Elon Musk blames X outages on “massive cyberattack”

elon musk, Social Media, Twitter, Uncategorized, X, x corp, x outage / Mike M. / March 11, 2025

After DownDetector reported that tens of thousands of users globally experienced repeated X (formerly Twitter) outages, Elon Musk confirmed the issues are due to an ongoing cyberattack on the platform.

“There was (still is) a massive cyberattack against X,” Musk wrote on X. “We get attacked every day, but this was done with a lot of resources. Either a large, coordinated group and/or a country is involved.”

Details remain vague beyond Musk’s post, but rumors were circulating that X was under a distributed denial-of-service (DDOS) attack.

X’s official support channel, which has been dormant since August, has so far remained silent on the outage, but one user asked Grok—X’s chatbot that provides AI summaries of news—what was going on, and the chatbot echoed suspicions about the DDOS attack while raising other theories.

“Over 40,000 users reported issues, with the platform struggling to load globally,” Grok said. “No clear motive yet, but some speculate it’s political since X is the only target. Outages hit hard in the US, Switzerland, and beyond.”

As X goes down, users cry for Twitter

It has been almost two years since Elon Musk declared that Twitter “no longer exists,” haphazardly rushing to rebrand his social media company as X despite critics warning that users wouldn’t easily abandon the Twitter brand.

Fast-forward to today, and Musk got a reminder that his efforts to kill off the Twitter brand never really caught on with a large chunk of his platform.

Elon Musk blames X outages on “massive cyberattack” Read More »

Elon Musk to “fix” Community Notes after they contradict Trump

community notes, disinformation, Donald Trump, elon musk, fact checking, misinformation, Policy, Twitter, X / Mike M. / February 21, 2025

Elon Musk apparently no longer believes that crowdsourcing fact-checking through Community Notes can never be manipulated and is, thus, the best way to correct bad posts on his social media platform X.

Community Notes are supposed to be added to posts to limit misinformation spread after a broad consensus is reached among X users with diverse viewpoints on what corrections are needed. But Musk now claims a “fix” is needed to prevent supposedly outside influencers from allegedly gaming the system.

“Unfortunately, @CommunityNotes is increasingly being gamed by governments & legacy media,” Musk wrote on X. “Working to fix this.”

Musk’s announcement came after Community Notes were added to X posts discussing a poll generating favorable ratings for Ukraine President Volodymyr Zelenskyy. That poll was conducted by a private Ukrainian company in partnership with a state university whose supervisory board was appointed by the Ukrainian government, creating what Musk seems to view as a conflict of interest.

Although other independent polling recently documented a similar increase in Zelenskyy’s approval rating, NBC News reported, the specific poll cited in X notes contradicted Donald Trump’s claim that Zelenskyy is unpopular, and Musk seemed to expect X notes should instead be providing context to defend Trump’s viewpoint. Musk even suggested that by pointing to the supposedly government-linked poll in Community Notes, X users were spreading misinformation.

“It should be utterly obvious that a Zelensky[y]-controlled poll about his OWN approval is not credible!!” Musk wrote on X.

Musk’s attack on Community Notes is somewhat surprising. Although he has always maintained that Community Notes aren’t “perfect,” he has defended Community Notes through multiple European Union probes challenging their effectiveness and declared that the goal of the crowdsourcing effort was to make X “by far the best source of truth on Earth.” At CES 2025, X CEO Linda Yaccarino bragged that Community Notes are “good for the world.”

Yaccarino invited audience members to “think about it as this global collective consciousness keeping each other accountable at global scale in real time,” but just one month later, Musk is suddenly casting doubts on that characterization while the European Union continues to probe X.

Perhaps most significantly, Musk previously insisted as recently as last year that Community Notes could not be manipulated, even by Musk. He strongly disputed a 2024 report from the Center for Countering Digital Hate that claimed that toxic X users were downranking accurate notes that they personally disagreed with, claiming any attempt at gaming Community Notes would stick out like a “neon sore thumb.”

Elon Musk to “fix” Community Notes after they contradict Trump Read More »

X is reportedly blocking links to secure Signal contact pages

Security, signa, Tech, Twitter, X / Kris Guyer / February 17, 2025

X, the social platform formerly known as Twitter, is seemingly blocking links to Signal, the encrypted messaging platform, according to journalist Matt Binder and other firsthand accounts.

Binder wrote in his Disruptionist newsletter Sunday that links to Signal.me, a domain that offers a way to connect directly to Signal users, are blocked on public posts, direct messages, and profile pages. Error messages—including “Message not sent,” “Something went wrong,” and profiles tagged as “considered malware” or “potentially harmful”—give no direct suggestion of a block. But posts on X, reporting at The Verge, and other sources suggest that Signal.me links are broadly banned.

Signal.me links that were already posted on X prior to the recent change now show a “Warning: this link may be unsafe” interstitial page rather than opening the link directly. Links to Signal handles and the Signal homepage are still functioning on X.

Binder, a former Mashable reporter who was once blocked by X (then Twitter) for reporting on owner Elon Musk and accounts related to his private jet travel, credited the first reports to an X post by security research firm Mysk.

X is reportedly blocking links to secure Signal contact pages Read More »

European Union orders X to hand over algorithm documents

elon musk, EU, European Commission, Policy, syndication, Twitter, X / Rejus Almole / January 18, 2025

Earlier in the week, Germany’s defence ministry and foreign ministry said they were suspending their activity on X, with the defence ministry saying it had become increasingly “unhappy” with the platform.

When asked if the expanded probe was a response to a discussion Musk conducted last week with AfD co-leader Alice Weidel, in which she was given free rein to promote her party’s platform and make false claims about Adolf Hitler, a Commission spokesperson said the new request helped “us monitor systems around all these events taking place.”

However, he said it was “completely independent of any political considerations or any specific events.”

“We are committed to ensuring that every platform operating in the EU respects our legislation, which aims to make the online environment fair, safe, and democratic for all European citizens,” said Henna Virkkunen, the Commission’s digital chief.

X did not immediately respond to a request for comment.

The Commission had been under recent political pressure to be tough on Musk’s X ahead of the Weidel interview.

Last week Damian Boeselager, member of the European parliament, wrote to Virkkunnen to demand a probe into whether the social media platform’s use of algorithms met the EU’s transparency requirements.

“There are allegations that Musk is boosting his own tweets,” Boeselager told the Financial Times last week. “The guy can be crazy but it is unfair if he’s amplifying who must listen to him.”

This story was updated shortly after publication with additional details.

European Union orders X to hand over algorithm documents Read More »

X CEO signals ad boycott is over. External data paints a different picture.

CES 2025, Donald Trump, elon musk, linda yaccarino, online advertising, Policy, Twitter, twitter ad boycott, X / Tim Belzer / January 9, 2025

When X CEO Linda Yaccarino took the stage as a keynote speaker at CES 2025, she revealed that “90 percent of the advertisers” who boycotted X over brand safety concerns since Elon Musk’s 2022 Twitter acquisition “are back on X.”

Yaccarino did not go into any further detail to back up the data point, and X did not immediately respond to Ars’ request to comment.

But Yaccarino’s statistic seemed to bolster claims that X had made since Donald Trump’s re-election that advertisers were flocking back to the platform, with some outlets reporting that brands hoped to win Musk’s favor in light of his perceived influence over Trump by increasing spending on X.

However, it remains hard to gauge how impactful this seemingly significant number of advertisers returning will be in terms of spiking X’s value, which fell by as much as 72 percent after Musk’s Twitter takeover. And X’s internal data doesn’t seem to completely sync up with data from marketing intelligence firm Sensor Tower, suggesting that more context may be needed to understand if X’s financial woes may potentially be easing up in 2025.

Before the presidential election, Sensor Tower previously told Ars that “72 out of the top 100 spending US advertisers” on Twitter/X from October 2022 had “ceased spending on the platform as of September 2024.” This was up from 50 advertisers who had stopped spending on Twitter/X in October 2023, about a year after Musk’s acquisition, suggesting that the boycott had seemingly only gotten worse.

Shortly after the election, AdWeek reported that big brands, including Comcast, IBM, Disney, Warner Bros. Discovery, and Lionsgate Entertainment, had resumed advertising on X. But by the end of 2024, Sensor Tower told Ars that X still had seemingly not succeeded in wooing back many of pre-acquisition Twitter’s top spenders, making Yaccarino’s claim that “90 percent of advertisers are back on X” somewhat harder to understand.

X CEO signals ad boycott is over. External data paints a different picture. Read More »

Crypto scammers posing as real brands on X are easily hacking YouTubers

Cryptocurrency, cryptocurrency scam, fake x accounts, Gmail, Google, LinkedIn, phishing, Policy, Twitter, X, youtube / Rejus Almole / December 19, 2024

“I’m fighting with Google now,” Townsend told Ars. “I don’t expect any real answers from them.”

How YouTubers can avoid being targeted

As YouTube appears evasive, Townsend has been grateful for long-time subscribers commenting to show support, which may help get his videos amplified more by the algorithm. On YouTube, he also said that because “the outpouring of support was beyond anything” he could’ve expected, it kept him “sane” through sometimes 24-hour periods of silence without any updates on when his account would be restored.

Townsend told Ars that he rarely does sponsorships, but like many in the fighting game community, his inbox gets spammed with offers constantly, much of which he assumes are scams.

“If you are a YouTuber of any size,” Townsend explained in his YouTube video, “you are inundated with this stuff constantly,” so “my BS detector is like, okay, fake, fake, fake, fake, fake, fake, fake. But this one just, it looked real enough, like they had their own social media presence, lots of followers. Everything looked real.”

Brian_F echoed that in his video, which breaks down how the latest scam evolved from more obvious scams, tricking even skeptical YouTubers who have years of experience dodging phishing scams in their inboxes.

“The game has changed,” Brian_F said.

Townsend told Ars that sponsorships are rare in the fighting game community. YouTubers are used to carefully scanning supposed offers to weed out the real ones from the fakes. But Brian_F’s video pointed out that scammers copy/paste legitimate offer letters, so it’s already hard to distinguish between potential sources of income and cleverly masked phishing attacks using sponsorships as lures.

Part of the vetting process includes verifying links without clicking through and verifying identities of people submitting supposed offers. But if YouTubers are provided with legitimate links early on, receiving offers from brands they really like, and see that contacts match detailed LinkedIn profiles of authentic employees who market the brand, it’s much harder to detect a fake sponsorship offer without as many obvious red flags.

Crypto scammers posing as real brands on X are easily hacking YouTubers Read More »

Toxic X users sabotage Community Notes that could derail disinfo, report says

community notes, disinformation, elon musk, misinformation, Policy, Twitter, us election, X / Mike M. / October 31, 2024

It’s easy for biased users to bury accurate Community Notes, report says.

What’s the point of recruiting hundreds of thousands of X users to fact-check misleading posts before they go viral if those users’ accurate Community Notes are never displayed?

That’s the question the Center for Countering Digital Hate (CCDH) is asking after digging through a million notes in a public X dataset to find out how many misleading claims spreading widely on X about the US election weren’t quickly fact-checked.

In a report, the CCDH flagged 283 misleading X posts fueling election disinformation spread this year that never displayed a Community Note. Of these, 74 percent were found to have accurate notes proposed but ultimately never displayed—apparently due to toxic X users gaming Community Notes to hide information they politically disagree with.

On X, Community Notes are only displayed if a broad spectrum of X users with diverse viewpoints agree that the post is “helpful.” But the CCDH found that it’s seemingly easy to hide an accurate note that challenges a user’s bias by simply refusing to rate it or downranking it into oblivion.

“The problem is that for a Community Note to be shown, it requires consensus, and on polarizing issues, that consensus is rarely reached,” the CCDH’s report said. “As a result, Community Notes fail precisely where they are needed most.”

Among the most-viewed misleading claims where X failed to add accurate notes were posts spreading lies that “welfare offices in 49 states are handing out voter registration applications to illegal aliens,” the Democratic party is importing voters, most states don’t require ID to vote, and both electronic and mail-in voting are “too risky.”

These unchecked claims were viewed by tens of millions of users, the CCDH found.

One false narrative—that Dems import voters—was amplified in a post from Elon Musk that got 51 million views. In the background, proposed notes sought to correct the disinformation by noting that “lawful permanent residents (green card holders)” cannot vote in US elections until they’re granted citizenship after living in the US for five years. But even these seemingly straightforward citations to government resources did not pass muster for users politically motivated to hide the note.

This appears to be a common pattern on X, the CCDH suggested, and Musk is seemingly a multiplier. In July, the CCDH reported that Musk’s misleading posts about the 2024 election in particular were viewed more than a billion times without any notes ever added.

The majority of the misleading claims in the CCDH’s report seemed to come from conservative users. But X also failed to check a claim that Donald Trump “is no longer eligible to run for president and must drop out of the race immediately.” Posts spreading that false claim got 1.4 million views, the CCDH reported, and that content moderation misstep could potentially have risked negatively impacting Trump’s voter turnout at a time when Musk is campaigning for Trump.

Musk has claimed that while Community Notes will probably never be “perfect,” the fact-checking effort aspires to “be by far the best source of truth on Earth.” The CCDH has alleged that, actually, “most Community Notes are never seen by users, allowing misinformation to spread unchecked.”

Even X’s own numbers on notes seem low

On the Community Notes X account, X acknowledges that “speed is key to notes’ effectiveness—the faster they appear, the more people see them, and the greater effect they have.”

On the day before the CCDH report dropped, X announced that “lightning notes” have been introduced to deliver fact-checks in as little as 15 minutes after a misleading post is written.

“Ludicrously fast? Now reality!” X proclaimed.

Currently, more than 800,000 X users contribute to Community Notes, and with the lightning notes update, X can calculate their scores more quickly. That efficiency, X said, will either spike the amount of content removals or reduce sharing of false or misleading posts.

But while X insists Community Notes are working faster than ever to reduce harmful content spreading, the number of rapidly noted posts that X reports seems low. On a platform with an estimated 429 million daily active users worldwide, only about 400 notes were displayed within the past two weeks in less than an hour of a post going live. For notes that took longer—which the CCDH suggested is the majority if the fact-check is on a controversial topic—only about 60 more notes were displayed in more than an hour.

In July, an international NGO that monitors human rights abuses and corruption, Global Witness, found 45 “bot-like accounts that collectively produced around 610,000 posts” in a two-month period this summer on X, “amplifying racist and sexualized abuse, conspiracy theories, and climate disinformation” ahead of the UK general election.

Those accounts “posted prolifically during the UK general election,” then moved “to rapidly respond to emerging new topics amplifying divisive content,” including the US presidential race.

The CCDH reported that even when misleading posts get fact-checked, the original posts on average are viewed 13 times more than the note is seen, suggesting the majority of damage is done in the time before the note is posted.

Of course, content moderators are often called out for moving too slowly to remove harmful content, a Bloomberg opinion piece praising Community Notes earlier this year noted. That piece pointed to studies showing that “crowdsourcing worked just as well” as professional fact checkers “when assessing the accuracy of news stories,” concluding that “it may be impossible for any social media company to keep up, which is why it’s important to explore other approaches.”

X has said that it’s “common to see Community Notes appearing days faster than traditional fact checks,” while promising that more changes are coming to get notes ranked as “helpful” more quickly.

X risks becoming an echo chamber, data shows

Data that the market intelligence firm Sensor Tower recently shared with Ars offers a potential clue as to why the CCDH is seeing so many accurate notes that are never voted as “helpful.”

According to Sensor Tower’s estimates, global daily active users on X are down by 28 percent in September 2024, compared to October 2022 when Elon Musk took over Twitter. While many users have fled the platform, those who remained are seemingly more engaged than ever—with global engagement up by 8 percent in the same time period. (Rivals like TikTok and Facebook saw much lower growth, up by 3 and 1 percent, respectively.)

This paints a picture of X risking becoming an echo chamber, as loyal users engage more with the platform where misleading posts can seemingly easily go unchecked and buried notes potentially warp discussion in Musk’s “digital town square.”

When Musk initially bought Twitter, one of his earliest moves was to make drastic cuts to the trust and safety teams chiefly responsible for content-moderation decisions. He then expanded the role of Twitter’s Community Notes to substitute for trust and safety team efforts, where before Community Notes was viewed as merely complementary to broader monitoring.

The CCDH says that was a mistake and that the best way to ensure that X is safe for users is to build back X’s trust and safety teams.

“Our social media feeds have no neutral ‘town square’ for rational debate,” the CCDH report said. “In reality, it is messy, complicated, and opaque rules and systems make it impossible for all voices to be heard. Without checks and balances, proper oversight, and well-resourced trust and safety teams in place, X cannot rely on Community Notes to keep X safe.”

More transparency is needed on Community Notes

X and the CCDH have long clashed, with X unsuccessfully suing to seemingly silence the CCDH’s reporting on hate speech on X, which X claimed caused tens of millions in advertising losses. During that legal battle, the CCDH called Musk a “thin-skinned tyrant” who could not tolerate independent research on his platform. And a federal judge agreed that X was clearly suing to “punish” and censor the CCDH, dismissing X’s lawsuit last March.

Since then, the CCDH has resumed its reporting on X. In the most recent report, the CCDH urged that X needed to be more transparent about Community Notes, arguing that “researchers must be able to freely, without intimidation, study how disinformation and unchecked claims spread across platforms.”

The research group also recommended remedies, including continuing to advise that advertisers “evaluate whether their budgets are funding the misleading election claims identified in this report.”

That could lead brands to continue withholding spending on X, which is seemingly already happening. Sensor Tower estimated that “72 out of the top 100 spending US advertisers on X from October 2022 have ceased spending on the platform as of September 2024.” And compared to the first half of 2022, X’s ad revenue from the top 100 advertisers during the first half of 2024 was down 68 percent.

Most drastically, the CCDH recommended that US lawmakers reform Section 230 of the Communications Decency Act “to provide an avenue for accountability” by mandating risk assessments of social media platforms. That would “expose the risk posed by disinformation” and enable lawmakers to “prescribe possible mitigation measures including a comprehensive moderation strategy.”

Globally, the CCDH noted, some regulators have the power to investigate the claims in the CCDH’s report, including the European Commission under the Digital Services Act and the UK’s Ofcom under the Online Safety Act.

“X and social media companies as an industry have been able to avoid taking responsibility,” the CCDH’s report said, offering only “unreliable self-regulation.” Apps like X “thus invent inadequate systems like Community Notes because there is no legal mechanism to hold them accountable for their harms,” the CCDH’s report warned.

Perhaps Musk will be open to the CCDH’s suggestions. In the past, Musk has said that “suggestions for improving Community Notes are… always… much appreciated.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Toxic X users sabotage Community Notes that could derail disinfo, report says Read More »

X Payments delayed after Musk’s X weirdly withdrew application for NY license

consumer financial protection bureau, elon musk, fintech, Policy, Twitter, X, x corp, x payments / Tim Belzer / October 25, 2024

Will X Payments launch this year? Outlook not so good.

Credit: Aurich Lawson | Getty Images/Bloomberg

This October, many Elon Musk believers are wondering, where is X Payments?

Last year, Musk claimed in a Spaces conversation that he “would be surprised” if it took longer than mid-2024 to roll out the payments feature that he believes is crucial to transforming the social media app formerly known as Twitter into an everything app.

“It would blow my mind if we don’t have that rolled out by the end of next year,” Musk said around this time last year, clarifying that “when I say payments, I actually mean someone’s entire financial life. If it involves money, it’ll be on our platform. Money or securities or whatever. So, it’s not just like ‘send $20 to my friend.’ I’m talking about, like, you won’t need a bank account.”

Echoing Musk as recently as June, X CEO Linda Yaccarino was hyping the US release of X Payments as imminent. But it has been months without another peep from X leadership, and Ars recently confirmed that X took a curious step in April that suggests the payments feature may be delayed indefinitely.

During the Spaces conversation last December with Ark Invest CEO Cathie Wood, Musk discussed X’s bid to secure money transmitter licenses in all 50 states, noting that it would be “irrelevant” to launch X Payments without California and New York licenses.

Since then, X has made a decent amount of progress, picking up money transmitter licenses in 38 states, including a critical license in California.

But approvals in New York were reportedly stalled for months after a New York City law firm, now called Walden Macht Haran & Williams (WMHW), sent an open letter to attorneys general and banking commissioners in all 50 states in September 2023, urging that X be deemed “unfit” for a money transmitter license.

WMHW had filed a lawsuit alleging that Twitter—before Musk acquired it—”acted at the direction of the Kingdom of Saudi Arabia (KSA) in furtherance of KSA’s long-running campaign of transnational repression.”

That campaign led to the murder of Washington Post correspondent Jamal Khashoggi and the “imprisonment of Abdulrahman Al-Sadhan, a human rights worker and anonymous Twitter user, whose confidential user data—leaked by Twitter’s employees—precipitated and enabled this barbarity,” the letter alleged. And when Musk took over the platform, he only deepened the app’s KSA ties further when he “invited KSA to convert its shares in Twitter into a financial stake during his private take-over of the platform,” the letter said.

Rather than grant X money transmitter licenses, WMHW recommended that attorneys general and banking commissioners use X’s money transmitter licenses as an excuse to investigate the allegations and demystify the app’s allegedly dangerous KSA ties.

Apparently, X either did not like the heat or decided to rethink its X Payments strategy, because the New York Department of Financial Services provided new information to Ars this week confirming that X withdrew its money transmitter license in New York in April 2024.

The department also confirmed that X has not since resubmitted the application.

However, WMHW this month voluntarily dismissed its client’s lawsuit against X and declined to comment on whether the open letter seemingly worked to block X Payments’ launch. It seems possible that X may leverage that court win to eventually resubmit its application for a New York license, but Ars could not confirm if X has any plans to resubmit any time soon.

An X spokesperson answered Ars’ request to comment (which rarely happens) but declined to provide an update on any new timeline for X Payments’ launch.

X Payments unlikely to launch without New York

It seems possible that X has gone silent on X Payments because there is no timeline currently.

A global payments expert for tech consultancy Capco, Daniela Hawkins, told Ars that, as an outsider going just off a “gut check,” if X has withdrawn its application from New York—with “New York obviously being such a major metropolitan area… that would seem to be a barrier to entry into the payments market.”

X could launch X Payments without New York and other states, but Hawkins said users might be confused about where they can and cannot send money. Hawkins thinks it’s unlikely that Musk—who co-founded PayPal and has wanted to launch his own payments app since—would roll out X Payments “half-assed.”

Basically, if X pushed through with the launch, users could accept and send funds just like they can using any other payments app, but without licenses in all states, X users could only send money to people located in states where X has licenses. Hawkins said that inconsistency could deter popular use of the payments feature because “it’s too difficult for the consumer to understand.”

“If you roll it out with handcuffs on it, it’s gonna have a bumpy launch,” Hawkins said. “So why would you do that?”

Going that route, X seemingly risks users ditching X to complete payments on apps where every transaction reliably goes through, Hawkins suggested.

“They’re gonna be like, ‘Wait, I don’t know where this Etsy shop is located, I don’t care,” Hawkins said, noting, “that’s just a bad user experience.”

More regulations on payment apps coming

Last year, Hawkins told Ars that X faced an “uphill battle” launching X Payments, partly due to intensifying regulations on the financial services industry that are increasingly pulling payments apps into regulations typically focused on regulating traditional banking services.

Just days ago, the Consumer Financial Protection Bureau (CFPB) issued a final rule requiring banks, credit unions, and online payments services to make it easy and safe for customers to port banking data to a new financial service provider.

The CFPB argues customers need to have control over their data, but Hawkins told Ars that banks considered the controversial rule potentially allowing customers to transfer sensitive data in one click to be a “freaking nightmare.”

Banks warned of fraud risks and privacy concerns about sharing sensitive data with third parties that could profit off that data, possibly heightening risks of data breaches. Compliance isn’t required until 2026, but already the rule is being challenged in court, Hawkins said.

In one way, the new rule could be good for X, Hawkins told Ars, as the app could quickly gain access to valuable financial data if X users did switch from, say, using a bank to managing money through X Payments. Then X wouldn’t have “to go build all this data from scratch” to make X Payments profitable, Hawkins suggested.

But in another way, the rule could put X in “an interesting spot” where the app is required to share its user data with third parties in a way that could potentially have Musk second-guessing whether X would even benefit from becoming a bank in the way that he initially planned. Banks have protested the CFPB rule as allowing third parties to profit off data that they can’t, and Musk’s whole X Payments plan appears to revolve around profiting off users’ financial data.

“If somebody wants to pay with X, now X has to transfer the data to the third party, and they may not want to do that, because obviously, data is power, right?” Hawkins said.

Not a bank

But if Musk is suddenly shy about turning X into a bank, it comes at a time when banks are less likely to partner with social media apps for potentially risky new payment ventures.

Hawkins noted that banks have struggled to roll out new payment capabilities as easily as fintechs can, and that struggle inspired longtime partnerships between banks and tech companies that have recently begun to collapse. On Wednesday, the CFPB ordered Apple and Goldman Sachs to pay more than $89 million over “illegally mishandled transaction disputes.” Now Goldman Sachs is banned from offering new credit cards until it can be trusted to comply with laws. And Wells Fargo recently bowed out of PayPal and Square partnerships, citing compliance costs, The Information reported this week.

For Musk, who has notoriously butted heads with his trust and safety compliance teams at X, working with regulators on launching X Payments might, at this moment, seem less attractive.

“It’s one thing to want to move money on a payments app,” Hawkins told Ars. “It’s another thing to be a bank. Like he’s gonna hate being a bank.”

Earlier this year, the CFPB risked being dismantled after the financial services associations alleged its funding scheme was improper. But shortly after X withdrew from New York, the Supreme Court ruled in May that nothing was amiss with CFPB’s funding, despite Justice Samuel Alito warning in his dissent that SCOTUS’s decision meant the CFPB could “bankroll its own agenda without any congressional control or oversight,” Reuters reported.

In this strained environment, X could potentially overcome all obstacles and become a bank and fill a gap left by banks beginning to be spooked by fintech deals, Hawkins said, insisting that she would never bet against Musk, whose successes are many. But granting money transmitter licenses helps states prevent financial crimes through compliance requirements, and X quietly pulling out of New York earlier this year suggests that X may not be prepared to take on regulatory scrutiny at this current moment.

The last major development regarding X Payments came in August. It didn’t come from X leadership but from an app researcher, Nima Owji, who posted on X that “X Payments is coming soon!” Digging in X’s code, Owji apparently found references to new payments features enabling “transactions, balance, and transfer,” as well as a “Payments” button seemingly ready to be added to X’s bookmarks tab, TechCrunch reported.

But for Musk fans awaiting an official update, X executives’ silence on X Payments has been deafening since June, when Yaccarino forecast the feature would be coming soon, despite knowing that X had withdrawn its application for a money transmitter license from New York.

X continuing to hype the payments service without publicly disclosing the apparent speed bump in New York “doesn’t feel very honest,” Hawkins told Ars.

X still losing users, advertisers

It has been two years since Musk took over Twitter, soon after revealing that he intended to use Twitter’s userbase as the launchpad for an everything app that would be so engaging and useful that it would be the only app that anyone would ever need online.

Market intelligence firm Sensor Tower shared data with Ars showing that, compared to October 2022, when Musk bought Twitter, global daily average users on X were down 28 percent in September 2024.

Sensor Tower attributed part of the recent decline to X’s ban in Brazil driving out users but noted that overall, users “were down significantly compared to the pre-acquisition period,” as now-X “contended with a rise of controversial content and technical issues.”

While the decline in users could hurt Musk’s ambitions to launch a hugely popular payments app nested in X, the spike in offensive content has notably alienated advertisers who traditionally are X’s dominant source of revenue. And in lockstep with X’s decline in users, major brands have continued to shed the social app in 2024, Sensor Tower told Ars.

Last November, ad agencies flagged then-Twitter brand safety concerns, including GroupM marking Twitter “high risk” and Interpublic Group recommending that advertisers pause spending. By the end of last year, Sensor Tower reported that “of the company’s top 100 US advertisers in the days before” Musk purchased the platform, “only 50 were still there as of October 2023.”

The picture is even bleaker as X approaches the end of 2024, Sensor Tower’s data shows, estimating that “72 out of the top 100 spending US advertisers on X from October 2022 have ceased spending on the platform as of September 2024.” Compared to the first half of 2022, prior to Musk’s acquisition, X’s ad revenue from top 100 advertisers during the first half of 2024 was down 68 percent, Sensor Tower estimated.

Since becoming X’s CEO, Yaccarino has appeared most vocal about driving growth in X’s video services, allowing advertisers to avoid toxic content on the app by only running their ads alongside pre-approved creators’ content. In particular, Yaccarino has hyped X’s partnership with the NFL, announcing today on X that the partnership will be expanded.

That NFL partnership has seemingly helped X grow its ad revenue, with Sensor Tower estimating that “four out of the top 10 spending US advertisers on X in September 2024 were tied to sports or sports betting, likely in an attempt to capitalize on heightened consumer interest around the beginning of the NFL season.”

But overall, X’s revenue has not recovered in 2024, with Fidelity recently estimating that X is worth 80 percent less than when Musk bought the app, CNN reported.

Instead of working with advertisers, Musk went on the attack, suing the World Federation of Advertisers in August over what he calls an “illegal boycott” of X. But X’s spokesperson, Michael Abboud, linked Ars to an X post suggesting that X has held discussions with big brands about a brand safety solution.

“X is pleased to have reached an agreement with Unilever and to continue our partnership with them on the platform,” X’s post said. “Today’s news is the first part of the ecosystem-wide solution and we look forward to more resolution across the industry.”

Unilever did not respond to Ars’ request to comment on X’s proposed solution.

Musk’s strategy for monetizing X has always been to reduce reliance on advertising, but his everything app pursuit does not seem to be coming together as quickly as planned to make up for lost ad revenue. He initially projected that it would take three to five years to roll out all the features turning X into an everything app. But two years in, launching the core product experts say is critical to the success of everything apps like WeChat—X Payments—seems to be the major obstacle that Musk faces to manage the app without relying nearly entirely on advertisers’ meddling ideas regarding brand safety.

Hawkins said that Musk perhaps did not make a “great bet” when buying Twitter as the foundation of his everything app.

X “has continued to trend down in terms of profitability and users, and I’m sure he’s considering X Payments to be maybe a Hail Mary to try to pull X back into the black,” Hawkins said.

But by trying to disrupt the financial industry, Musk perhaps rashly “picked a highly regulated capability to bet the farm on,” Hawkins suggested.

As it stands now, it’s currently unclear when or if X Payments will launch, as the feed on the X account for Payments remains pointedly blank and Musk has not indicated whether X Payments can possibly launch without New York.

“I think it’s very telling he pulled out his application from New York, when he had even said in the media, there’s no point in doing this if I don’t have New York,” Hawkins said.

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

X Payments delayed after Musk’s X weirdly withdrew application for NY license Read More »

Tesla, Warner Bros. sued for using AI ripoff of iconic Blade Runner imagery

Blade Runner, blade runner 2049, copyright, copyright law, elon musk, Policy, Tesla, warner bros. discovery, X / Kris Guyer / October 22, 2024

A copy of a copy of a copy

“That movie sucks,” Elon Musk said in response to the lawsuit.

Credit: via Alcon Entertainment

Elon Musk may have personally used AI to rip off a Blade Runner 2049 image for a Tesla cybercab event after producers rejected any association between their iconic sci-fi movie and Musk or any of his companies.

In a lawsuit filed Tuesday, lawyers for Alcon Entertainment—exclusive rightsholder of the 2017 Blade Runner 2049 movie—accused Warner Bros. Discovery (WBD) of conspiring with Musk and Tesla to steal the image and infringe Alcon’s copyright to benefit financially off the brand association.

According to the complaint, WBD did not approach Alcon for permission until six hours before the Tesla event when Alcon “refused all permissions and adamantly objected” to linking their movie with Musk’s cybercab.

At that point, WBD “disingenuously” downplayed the license being sought, the lawsuit said, claiming they were seeking “clip licensing” that the studio should have known would not provide rights to livestream the Tesla event globally on X (formerly Twitter).

Musk’s behavior cited

Alcon said it would never allow Tesla to exploit its Blade Runner film, so “although the information given was sparse, Alcon learned enough information for Alcon’s co-CEOs to consider the proposal and firmly reject it, which they did.” Specifically, Alcon denied any affiliation—express or implied—between Tesla’s cybercab and Blade Runner 2049.

“Musk has become an increasingly vocal, overtly political, highly polarizing figure globally, and especially in Hollywood,” Alcon’s complaint said. If Hollywood perceived an affiliation with Musk and Tesla, the complaint said, the company risked alienating not just other car brands currently weighing partnerships on the Blade Runner 2099 TV series Alcon has in the works, but also potentially losing access to top Hollywood talent for their films.

The “Hollywood talent pool market generally is less likely to deal with Alcon, or parts of the market may be, if they believe or are confused as to whether, Alcon has an affiliation with Tesla or Musk,” the complaint said.

Musk, the lawsuit said, is “problematic,” and “any prudent brand considering any Tesla partnership has to take Musk’s massively amplified, highly politicized, capricious and arbitrary behavior, which sometimes veers into hate speech, into account.”

In bad faith

Because Alcon had no chance to avoid the affiliation while millions viewed the cybercab livestream on X, Alcon saw Tesla using the images over Alcon’s objections as “clearly” a “bad faith and malicious gambit… to link Tesla’s cybercab to strong Hollywood brands at a time when Tesla and Musk are on the outs with Hollywood,” the complaint said.

Alcon believes that WBD’s agreement was likely worth six or seven figures and likely stipulated that Tesla “affiliate the cybercab with one or more motion pictures from” WBD’s catalog.

While any of the Mad Max movies may have fit the bill, Musk wanted to use Blade Runner 2049, the lawsuit alleged, because that movie features an “artificially intelligent autonomously capable” flying car (known as a spinner) and is “extremely relevant” to “precisely the areas of artificial intelligence, self-driving capability, and autonomous automotive capability that Tesla and Musk are trying to market” with the cybercab.

The Blade Runner 2049 spinner is “one of the most famous vehicles in motion picture history,” the complaint alleged, recently exhibited alongside other iconic sci-fi cars like the Back to the Future time-traveling DeLorean or the light cycle from Tron: Legacy.

As Alcon sees it, Musk seized the misappropriation of the Blade Runner image to help him sell Teslas, and WBD allegedly directed Musk to use AI to skirt Alcon’s copyright to avoid a costly potential breach of contract on the day of the event.

For Alcon, brand partnerships are a lucrative business, with carmakers paying as much as $10 million to associate their vehicles with Blade Runner 2049. By seemingly using AI to generate a stylized copy of the image at the heart of the movie—which references the scene where their movie’s hero, K, meets the original 1982 Blade Runner hero, Rick Deckard—Tesla avoided paying Alcon’s typical fee, their complaint said.

Musk maybe faked the image himself, lawsuit says

During the live event, Musk introduced the cybercab on a WBD Hollywood studio lot. For about 11 seconds, the Tesla founder “awkwardly” displayed a fake, allegedly AI-generated Blade Runner 2049 film still. He used the image to make a point that apocalyptic films show a future that’s “dark and dismal,” whereas Tesla’s vision of the future is much brighter.

In Musk’s slideshow image, believed to be AI-generated, a male figure is “seen from behind, with close-cropped hair, wearing a trench coat or duster, standing in almost full silhouette as he surveys the abandoned ruins of a city, all bathed in misty orange light,” the lawsuit said. The similarity to the key image used in Blade Runner 2049 marketing is not “coincidental,” the complaint said.

If there were any doubts that this image was supposed to reference the Blade Runner movie, the lawsuit said, Musk “erased them” by directly referencing the movie in his comments.

“You know, I love Blade Runner, but I don’t know if we want that future,” Musk said at the event. “I believe we want that duster he’s wearing, but not the, uh, not the bleak apocalypse.”

The producers think the image was likely generated—”even possibly by Musk himself”—by “asking an AI image generation engine to make ‘an image from the K surveying ruined Las Vegas sequence of Blade Runner 2049,’ or some closely equivalent input direction,” the lawsuit said.

Alcon is not sure exactly what went down after the company rejected rights to use the film’s imagery at the event and is hoping to learn more through the litigation’s discovery phase.

Musk may try to argue that his comments at the Tesla event were “only meant to talk broadly about the general idea of science fiction films and undesirable apocalyptic futures and juxtaposing them with Musk’s ostensibly happier robot car future vision.”

But producers argued that defense is “not credible” since Tesla explicitly asked to use the Blade Runner 2049 image, and there are “better” films in WBD’s library to promote Musk’s message, like the Mad Max movies.

“But those movies don’t have massive consumer goodwill specifically around really cool-looking (Academy Award-winning) artificially intelligent, autonomous cars,” the complaint said, accusing Musk of stealing the image when it wasn’t given to him.

If Tesla and WBD are found to have violated copyright and false representation laws, that potentially puts both companies on the hook for damages that cover not just copyright fines but also Alcon’s lost profits and reputation damage after the alleged “massive economic theft.”

Musk responds to Blade Runner suit

Alcon suspects that Musk believed that Blade Runner 2049 was eligible to be used at the event under the WBD agreement, not knowing that WBD never had “any non-domestic rights or permissions for the Picture.”

Once Musk requested to use the Blade Runner imagery, Alcon alleged that WBD scrambled to secure rights by obscuring the very lucrative “larger brand affiliation proposal” by positioning their ask as a request for much less expensive “clip licensing.”

After Alcon rejected the proposal outright, WBD told Tesla that the affiliation in the event could not occur because X planned to livestream the event globally. But even though Tesla and X allegedly knew that the affiliation was rejected, Musk appears to have charged ahead with the event as planned.

“It all exuded an odor of thinly contrived excuse to link Tesla’s cybercab to strong Hollywood brands,” Alcon’s complaint said. “Which of course is exactly what it was.”

Alcon is hoping a jury will find Tesla, Musk, and WBD violated laws. Producers have asked for an injunction stopping Tesla from using any Blade Runner imagery in its promotional or advertising campaigns. They also want a disclaimer slapped on the livestreamed event video on X, noting that the Blade Runner association is “false or misleading.”

For Musk, a ban on linking Blade Runner to his car company may feel bleak. Last year, he touted the Cybertruck as an “armored personnel carrier from the future—what Bladerunner would have driven.” This amused many Blade Runner fans, as Gizmodo noted, because there never was a character named “Bladerunner,” but rather that was just a job title for the film’s hero Deckard.

In response to the lawsuit, Musk took to X to post what Blade Runner fans—who rated the 2017 movie as 88 percent fresh on Rotten Tomatoes—might consider a polarizing take, replying, “That movie sucks” on a post calling out Alcon’s lawsuit as “absurd.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

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X’s depressing ad revenue helps Musk avoid EU’s strictest antitrust law

Antitrust law, Digital Markets Act, dma, elon musk, European Union, Policy, social media app, Twitter, X, x corp / Tim Belzer / October 16, 2024

Following an investigation, Elon Musk’s X has won its fight to avoid gatekeeper status under the European Union’s strict competition law, the Digital Markets Act (DMA).

On Wednesday, the European Commission (EC) announced that “X does indeed not qualify as a gatekeeper in relation to its online social networking service, given that the investigation revealed that X is not an important gateway for business users to reach end users.”

Since March, X had strongly opposed the gatekeeper designation by arguing that although X connects advertisers to more than 45 million monthly users, it does not have a “significant impact” on the EU’s internal market, a case filing showed.

A gatekeeper “is presumed to have a significant impact on the internal market where it achieves an annual Union turnover equal to or above EUR 7.5 billion in each of the last three financial years,” the case filing said. But X submitted evidence showing that its Union turnover was less than that in 2022, the same year that Musk took over Twitter and began alienating advertisers by posting their ads next to extremists’ tweets.

Throughout Musk’s reign at Twitter/X, the social networking company told the EC, both advertising revenue and users have steadily declined in the EU. In particular, “X Ads has a too small and decreasing scale in terms of share of advertising spend in the Union to constitute an important gateway in the market for online advertising,” X argued, further noting that X had a “lack of platform power” to change that anytime soon.

“In the last 15 months, X Ads has faced a decline in number of advertising business users, as well as a decline in pricing,” X argued.

X’s depressing ad revenue helps Musk avoid EU’s strictest antitrust law Read More »