The arrest of Telegram founder Pavel Duro in Paris on the evening of August 24 (local time in France) has attracted widespread attention in the market recently, triggering discussions from many well-known figures in the investment, business and political circles, including Tesla founder Elon Musk, Sequoia Capital partner Shaun Maguire, Ethereum founder Vitalik Buterin and other celebrities who expressed their support.
The keywords of support are mostly focused on "European Union" and "freedom of speech". Elon Musk has made several statements on X regarding the arrest of Pavel Duro. Nigel Farage, leader of the Reform Party and MP for Clacton, commented on X: "The arrest of Pavel Durov is worrying. Telegram is a safe free speech app. Maybe there are some bad guys on it, but there are on any platform. What will happen next...Elon Musk's arrest?" Elon Musk's support for Pavel Duro may be a manifestation of the loss of the lips and the coldness of the teeth. When Elon Musk first acquired Twitter (the predecessor of X) for $44 billion, he labeled himself a "free speech" faction and criticized the US government and the European Union for "unfree speech" on many occasions. In December 2023, the Commission initiated formal proceedings against X to assess whether X may have violated the Digital Services Act (DSA) in areas related to risk management, content review, dark mode, advertising transparency and researcher data access, and notified X on July 12 this year that it had violated the DSA regulations.
With the arrest of Telegram's founder, a new debate has begun around freedom of speech on the Internet.
As the owner of X, Musk, who is unwilling to cooperate with EU regulation, obviously has greater concerns.
For social media leaders, arrests like this set a dangerous precedent. The EU and US governments have summoned and questioned leaders of other social media companies, but few leaders of large technology companies have been arrested for what happened on these sites.
X received a warning from the EU
Pavel Duro's arrest in France this time may also be restricted by the relevant provisions of the DSA.
Alex Thorn, head of research at crypto asset management company Galaxy Digital, posted on the X platform that Telegram may be accused of not complying with the EU's DSA. "This is a very bad law that requires platforms to be responsible for illegal user content. This responsibility is in stark contrast to Section 230 of the United States, which exempts platforms from responsibility for user content."
Telegram issued a statement saying that the company complies with EU laws including DSA, and their audits meet industry standards.
DSA aims to strengthen user online security and prompt relevant companies to bear legal responsibility for harmful content, false information, advertising tracking and anti-competitive behavior
Under the bill, the EU can impose non-compliance penalties on companies and even require them to stop operating. Companies can correct related violations within a certain period of time, but if the European Commission finds that the feedback does not meet expectations, the company will face a fine of up to 6% of its global annual turnover.
In addition, very large online platforms and search engines must conduct an independent audit at least once a year, allow the European Commission and vetted researchers to access their data, and submit additional transparency information.
According to X's official data, the platform has more than 45 million monthly active users in the EU, and is a very large online platform according to the DSA definition. On December 18 last year, the European Commission initiated a formal procedure to launch an investigation into X, and in May this year asked X to provide information on the reduction of content review resources under the DSA - X reduced its team of content reviewers by nearly 20%, and reduced the language coverage in the EU from 11 EU languages to 7.
In July this year, the EU sent a preliminary finding to X, finding that X violated three provisions of the DSA:
First, the way X designed and operated the "verified account" interface with a "blue checkmark" was inconsistent with industry practice and deceived users. Since anyone can subscribe to obtain this "verified" status, it has a negative impact on users' ability to freely and intelligently decide the authenticity of accounts and the content they interact with. There is evidence that motivated malicious actors abuse "verified accounts" to deceive users.
Second, X does not meet the requirements of advertising transparency because it does not provide a searchable and reliable advertising repository, but instead sets up design features and access barriers that make the repository unsuitable for its purpose of transparency to users. In particular, the design does not allow for the necessary oversight and research on emerging risks posed by online advertising distribution.
Third, X failed to provide researchers with access to its public data in accordance with the conditions set out in the DSA. Specifically, X prohibited eligible researchers from independently accessing its public data, such as through scraping, as stated in its terms of service. In addition, X's process for granting eligible researchers access to its application programming interface (API) appears to prevent researchers from carrying out their research projects or leave them with no choice but to pay unreasonably high fees.
This means that X may be required to impose a fine of up to 6% of the provider's global annual turnover, while ordering the provider to take measures to address the violation.
However, regarding the recent arrest of Pavel Duro, a spokesperson for the European Commission clarified that "criminal prosecution is not one of the potential sanctions for violating the DSA. The DSA does not define what is illegal and does not establish any criminal offenses, so arrests cannot be invoked. Only national or international laws that define criminal offenses can be invoked."
It is reported that Pavel Durov was arrested by agents of the French National Anti-Fraud Office (ONAF). The search warrant was issued by OFMIN of the French National Judicial Police General Directorate. The main reason was that Telegram, the social network founded by Pavel Durov, was full of drug trafficking, gun black market and child pornography, and Telegram did not cooperate with the authorities.
Although it was clarified that Pavel Durov's arrest in France had nothing to do with DSA, a spokesman for the European Commission said that it was closely following developments related to Telegram and was ready to cooperate with the French authorities.
In addition to X, the European Commission also launched formal proceedings against TikTok in February and April of this year, and formal proceedings against Meta in April and May of this year.
Musk's response
Elon Musk ignored and despised the EU's warning based on DSA.
On August 12, Elon Musk interviewed former US President and current Republican presidential candidate Donald Trump on X. On the same day, EU Internal Market Commissioner Thierry Breton issued a warning to Elon Musk about spreading "content that promotes hatred, chaos, incites violence or certain false information" - this involves the "due diligence obligation" stipulated in DSA, which aims to regulate online hate speech and false information.
With the DSA's preliminary findings and notice on X still hanging over his head, Elon Musk responded to Breton with an emoticon from the 2008 movie "Tropic Thunder", in which an actor shouted: "Take a big step back and fuck your own face."
On the latest arrest of Pavel Durov, Elon Musk also expressed his dissatisfaction with the lack of freedom of speech in Europe.
"It's Europe in 2030 and you're being executed for liking a meme."
Called three times in French: "Freedom Freedom! Freedom?"
"Forwarding X post to people you know is essential to supporting free speech, especially in countries with strict censorship"
Elon Musk posted several posts satirizing Europe's lack of free speech, demanding the release of Durov, and wrote in French: "Freedom. Freedom! Freedom?"
The price of free speech
It seems that Elon Musk is a "free speech" party.
If you consider whether the purpose of free speech is out of self-interest, you can look at what Elon Musk has gained by insisting on "free speech".
In 2022, Elon Musk paid $44 billion to buy Twitter, the predecessor of X, and immediately unblocked a number of accounts that were once banned by Twitter.
In the year when he bought Twitter, Elon Musk banned the Twitter accounts of several journalists, claiming that the journalists provided "assassination coordinates" by publishing their real-time locations. After Elon Musk conducted a poll on Twitter, Elon Musk unblocked the journalists' accounts in about a week.
Last year, Elon Musk told advertisers who chose to remove their ads from X in an interview with CNBC, "Get lost." At the Cannes International Advertising Festival in Cannes, France this year, he explained his remarks at the time: "This is not directed at advertisers as a whole. This is respect for freedom of speech. I think it is important to have a global platform for free speech so that people with different views can express their views. In some cases, some advertisers insist on censorship... If we have to choose between censorship and loss, censorship and money, or freedom of speech and loss, we will choose the latter."
According to X's current terms, as long as they are properly labeled, violent content and pedophilia content are allowed on the platform, but account owners may not be associated with violent or hateful entities or promote their activities
At the end of last year, media reported that more than 100 advertisers withdrew from X, including companies such as Apple, Sony, General Motors and Disney. Some advertisers explained this: It was related to the speech environment on X.
If X refuses to cooperate with DSA, the best result is that X withdraws from the EU, which means losing 67 million EU users.
According to the data released by Elon Musk last year, X's advertising revenue has fallen by 50%, and cash flow is still negative. If it loses EU users, X's revenue may be affected. But if it does not cooperate or withdraw, it may face a fine of up to 6% of its global annual turnover.
Interestingly, Elon Musk may stand with Donald Trump on the issue of freedom of speech.
On the day when Elon Musk launched an interview with Donald Trump, Donald Trump's campaign team said that the EU should mind its own business instead of trying to interfere in the US presidential election. "The EU is an enemy of free speech and has no power to guide the US on how to conduct campaigns."
According to a report by The Wall Street Journal on July 15, Elon Musk plans to donate about $45 million a month to a group called the Political Action Committee (PAC) that supports Donald Trump's presidential campaign. Other well-known figures in the technology industry are also donating to the group. But Fortune magazine clarified on July 22 that Elon Musk will not contribute $45 million a month, but he did set up a PAC to sponsor Donald Trump's campaign.
According to documents released by the Federal Election Commission (FEC), the PAC was established in late May and is a legal entity unrelated to the campaign team. It cannot directly fund candidates, but can carry out support activities such as advertising or grassroots activities.
In addition, Donald Trump said in an interview with Reuters this month that if elected, he would consider offering Elon Musk a position in the U.S. cabinet or advisory position, and Elon Musk immediately responded that he was "willing to serve in the cabinet" - but in a recent interview, Donald Trump changed his words and said that Elon Musk runs multiple companies and is busy, but he can participate in discussions and provide advice.
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