This possibility opens up a whole new set of questions regarding the future of Twitter’s moderation policies and its impact on the election.
Even before former President Donald Trump turned it into a pulpit of digital bullying, the platform had a much larger political footprint than its relatively small user base would suggest. Entrusting Twitter to a mercurial billionaire forced to pay through the nose for a business he doesn’t want doesn’t bode well for the platform’s future. And while the fine print appears to allow Twitter to impose itself on Musk, the Delaware Court of Chancery may be reluctant to impose a transfer of ownership that undermines a key channel of political communication.
“Forcing Musk to buy something he doesn’t want? He’s the richest guy in the world, he just might shut it down,” said Adam Sieff, technology attorney at Davis Wright Tremaine. “And it’s not necessarily in the public interest.”
Around the time the deal was finalized in April, many legal observers pointed to a $1 billion withdrawal fee included in the merger deal between Musk and Twitter. But before Friday, less attention was paid to a clause allowing parties to seek “specific performance” if either tries to opt out. The legal term means Twitter can sue to enforce the contract in full — and Ann Lipton, a business law professor at Tulane University, said a judge could order Musk to take ownership. the platform as promised.
“Delaware courts have already ordered reluctant buyers to merge,” Lipton said.
There are many ways for an angry Musk to sabotage Twitter, from outright unplugging to relaxing its moderation policies until it becomes unusable. Lipton said judges could weigh those possibilities — and their potential political consequences — before sticking Musk with the full bill.
“While Twitter is legally correct and Delaware courts have ordered specific performances before, they have never done so in such a high-profile case,” Lipton said.
Musk’s lawyers say it was Twitter that breached the agreement. They point to Musk’s claim that the company still underestimates its spambot problem and claim that Twitter failed to provide Musk with enough information and improperly fired two of its executives after signing the OK.
But outside lawyers say those claims have little basis. Sieff noted that Musk’s attorneys were “very careful not to make factual statements” when discussing Twitter spambots, instead emphasizing their client’s “beliefs” on the matter. “It’s a legal way of saying, ‘I don’t have proof,'” Sieff said. He also said Twitter would likely be able to show that Musk’s repeated requests for more information had been made. with the express intent of wrecking the deal, and he called Musk’s argument about firing Twitter executives “pretty lame.”
“Elon Musk had tweeted that he was going to fire everyone anyway,” Sieff said.
Lipton agreed that Musk’s arguments “really aren’t that compelling” and said Twitter “has a strong case.” And a person with knowledge of the situation said Friday that Twitter was not surprised by Musk’s decision and is confident his part of the deal is airtight.
It’s possible the two sides could settle their dispute before it hits a courtroom (although likely for more than $1 billion, which most lawyers consider the floor of Musk’s potential losses). ). But if they don’t, Musk runs a real risk of being ordered by a judge to pay Twitter’s posted price.
Even Trump thinks Musk might be stuck with Twitter. “Who the hell knows what’s going to happen, he has a pretty rotten contract”, the former president said at a rally on Saturday. A Twitter spokesperson declined to comment beyond the company’s press release on Friday.
A version of this story previously appeared in Morning Tech, a subscriber-only newsletter by POLITICOPro.