US Business

Since buying Twitter, Elon Musk has made radical changes that have sparked fears for the future of the platform, from firing half the staff to restoring ex-president Donald Trump’s account and temporarily suspending those of several journalists.

After Twitter users voted on Monday to oust Musk, AFP looks back at a rollercoaster two months at the Silicon Valley giant.

– Enter Elon –

Musk, the world’s second-richest richest man and CEO of Tesla and SpaceX, buys Twitter in late October for $44 billion after months of on-off negotiations.

“Let the good times roll,” he tweets after the deal is sealed on October 28. He becomes the sole director of the company after dissolving its corporate board.

– ‘Content moderation council’ –

In one of his first moves, the self-declared free speech absolutist announces he will form a “content moderation council”, in a nod to concerns that Twitter could become a free-for-all platform for disinformation and hate speech.

– Monthly charge –

On November 1, Musk announces the site will charge $8 per month to verify the accounts of celebrities and companies — a service that used to be free. But the November 6 launch of the Twitter Blue subscription plan goes awry. Musk is forced to suspend the move after an embarrassing rash of fake accounts alarm advertisers.

– Brands step back –

Top global companies, including General Mills and Volkswagen, suspend their advertising on Twitter on November 3 as they monitor the new direction the company will take.

– Massive layoffs –

On November 4, half of Twitter’s 7,500-strong staff are made redundant, sending shockwaves through Silicon Valley.

Musk tweets that “unfortunately there is no choice when the company is losing over $4M/day”.

– Regulator’s ‘concern’-

The chaos draws a rare warning on November 10 from the Federal Trade Commission (FTC), the US authority that oversees consumer safety.

“We are tracking recent developments at Twitter with deep concern,” says an FTC spokesperson.

– Ultimatum to staff –

Musk delivers an ultimatum to Twitter staff on November 16, asking them to choose between being “extremely hardcore” and working long hours, or losing their jobs. He gives them a day to decide.

Large numbers of staff quit.

– Trump reinstated –

Musk reinstates the account of banned former president Donald Trump after conducting a poll of users, a narrow majority of whom support the move. 

A few days later he announces an “amnesty” for all banned Twitter accounts.

– Covid controversy  –

In late November, Twitter says it is no longer enforcing a policy of combatting Covid-19 disinformation. Musk had fiercely opposed Covid restrictions.

– Kanye suspended –

Musk revises his promises of unfettered free speech after rapper Kanye West tweets a picture that appears to show a swastika interlaced with a Star of David. His account is suspended for “incitement to violence”.

– Twitter Blue take two –

In mid-December Musk relaunches Twitter Blue. This time, Twitter conducts a review of the account before giving it the coveted blue check mark.

– Journalists suspended, then reinstated –

On December 15, Twitter suspends the accounts of more than a half-dozen journalists, including reporters from CNN, The New York Times, and The Washington Post.

Musk accuses them of endangering his family through their reporting on Twitter’s shutdown of an account that tracked flights of his private jet. 

The EU threatens to sanction the company.

On December 17 some of the accounts are reactivated.  

– Vote to oust Musk –

On December 19, Twitter users vote by 57.5 percent to oust Musk as CEO in a poll he organized and promised to honour.

Musk has not yet responded.

German business confidence improved for a third straight month in December, a key survey showed Monday, the latest sign a downturn in Europe’s top economy may be milder than feared.

The Ifo institute’s monthly confidence barometer, based on a survey of about 9,000 companies, reached 88.6 points, up from a reading of 86.4 points in November. 

Earlier in the year, the gauge declined for months after Russia’s invasion of Ukraine, and subsequent reduction in gas exports, sent inflation soaring and triggered warnings of recession for next year.

But a massive government fund to cap prices and efforts to diversify the country’s energy supplies have eased the immediate sense of crisis. 

“Sentiment in the German economy has brightened considerably,” Ifo president Clemens Fuest said.

“German business is entering the holiday season with a sense of hope.”

ING bank economist Carsten Brzeski said the reading shows that “hope has returned”.

“Hope that the economy might even avoid a winter recession or at least hope that it will only be a mild one.”

But he cautioned “the downsides still outweigh the upsides”, noting that gas reserves were dropping fast due to cold weather, as well as warning signs there could be a weakening of global trade. 

After months flashing red, leading indicators have started giving more optimistic readings in recent weeks. 

Last week, Ifo said the looming recession will be milder than expected, with economic output shrinking 0.1 percent in 2023, revising its previous prediction of a 0.3 percent contraction.

And another influential institute, IfW Kiel, even predicted that the economy would dodge recession due to the government relief measures. 

In its autumn forecast, the German government said the economy would contract 0.4 percent next year.

US online giant Meta appears to have “breached EU antitrust rules” in the online classified section of its Facebook social network, the European Commission said Monday in a preliminary finding.

“The Commission takes issue with Meta tying its online classified ads service, Facebook Marketplace, to its personal social network, Facebook,” it said in a statement.

“The Commission is also concerned that Meta is imposing unfair trading conditions on Facebook Marketplace’s competitors for its own benefit.”

The commission, the regulator for the 27-nation European Union, has had several run-ins with Meta and other Big Tech companies over their practices.

Its policy arsenal has been beefed up this year with two new pieces of EU legislation, the Digital Services Act and the Digital Markets Act, that carry massive financial penalties in the event of infringement. 

Those acts will come fully into force through 2023 and 2024.

Monday’s announcement was about “suspected violations” of EU antitrust rules and gives Meta a chance to respond to the commission’s formal Statement of Objections.

Those concerns focus on the way Meta gives Facebook users automatic access to Facebook Marketplace “whether they want it or not”.

That link may unfairly disadvantage Facebook Marketplace competitors, the commission said.

The concerns also home in on unfair trading practices on competing online classified ads services which advertise on Facebook or Instagram, both of which are part of Meta.

The commission said it was worried that the user terms on those platforms could allow Meta to use ads-related data from competitors to boost Facebook Marketplace.

If the EU’s concerns stand, and enough evidence of infringement is produced, Meta could face a fine of up to 10 percent of its total global annual turnover.

Meta’s worldwide revenue for the 12 months ending September 30 was $118 billion.

The commission could also prohibit the infringing behaviour.

Italy’s new hard-right government has abandoned plans to allow merchants to refuse card payments under 60 euros ($64), following pressure from the European Union.

Economy Minister Giancarlo Giorgetti confirmed the U-turn as he set out amendments to the 2023 budget late on Sunday.

The European Commission last week approved the general direction of far-right Prime Minister Giorgia Meloni’s first budget, but warned moves to boost the use of cash risked efforts to fight tax evasion.

“We must find solutions that are compatible with the recommendations and reference standards, also at the European level,” Giorgetti told a parliamentary commission.

The government had proposed merchants be allowed to refuse card payments for transactions worth less than 60 euros without incurring penalties, alongside measures to raise the maximum for cash payments in shops from 2,000 to 5,000 euros, which also drew criticism from Brussels.

The plan to raise the ceiling on cash payments will go ahead.

The European Commission had previously recommended that Italy fight tax evasion by strengthening e-payments and limiting the thresholds for cash payments.

The application of sanctions on merchants who refused card payments was also one of the goals agreed under an EU post-pandemic recovery plan, from which Italy stands to receive almost 200 billion euros in grants and loans by 2026.

The Bank of Italy has also criticised cash payments as aiding tax evasion, which costs Italy about 100 billion euros per year.

Another measure criticised by Brussels, a tax amnesty on debts of up to 1,000 euros from the period 2000 to 2015, has been postponed for three months, under the latest budget draft.

Ghana suspended payments on part of its foreign debt on Monday as the country undertakes debt restructuring in line with a bailout deal with the International Monetary Fund (IMF).

The West African state is facing an economic crisis with inflation at more than 50 percent and its cedi currency down sharply, hit by the adverse effects of the global pandemic and Ukraine crisis. 

“That is why we are announcing today a suspension of all debt service payments under certain categories of our external debt, pending an orderly restructuring of the affected obligations,” the finance ministry said in a statement.

“This suspension will include the payments on: our Eurobonds; our commercial term loans; and on most of our bilateral debt,” it said.

The government however said the suspension would exclude payments of multilateral debt, new debt (whether multilateral or otherwise) contracted after December 19, 2022 or debts related to certain short-term trade facilities.

“We are also evaluating certain specific debts related to projects with the highest socio-economic impact for Ghana which may have to be excluded,” it said.

– Debt troubles –

Once seen as an investor favourite, Ghana struggled recently with its debt burden. The government spends more than half of its revenues on debt servicing. The fall in the cedi increased debt values by $6 billion just this year.

The government said the foreign debt payment suspension was an interim emergency measure pending future agreements with the country’s creditors.

It also promised to engage with all of its external creditors to make Ghana’s debt sustainable.

Ghanaian economist Daniel Anim Amarteye said the government move could erode investors’ confidence in the economy.

“It could affect our credibility in the eyes of the investor community globally and our ability to go to the market in the near future could be affected,” Amarteye told AFP. 

“This move will lead to a further downgrade by the international rating organisations.”

Three major international rating agencies have all downgraded Ghana’s debt, in a sign of investor worries over its potential for defaulting.

“The ministry is yet to engage creditors. Whether or not they will agree to the terms from the ministry of finance is another issue. We are moving on very difficult turf,” he added.

Last week, Ghana agreed on a $3 billion credit deal with the IMF to tackle its economic crisis.

Although the three-year loan has yet to be approved by the fund’s board, the programme aims to reduce inflation, strengthen the economy’s resilience to external shocks and improve market confidence in the country.

A top cocoa and gold producer, Ghana also has oil and gas reserves, but its debt has soared and like the rest of sub-Saharan Africa it has been hit hard by fallout from the Covid pandemic and the Ukraine war.

The economic woes have caused social tension in the West African nation of 30 million people. There have been street protests against rising costs of living and the opposition has called for the removal of the finance minister.

The crisis forced President Nana Akufo-Addo’s government to reverse its position earlier this year and seek IMF help as economists warned of a default on debt payments.

The government has already announced a domestic debt swap as part of the programme to ease a crunch in payments and was soon expected to release details about restructuring foreign debt.

Europe equities rose Monday in light pre-Christmas trade with many traders away for the festive break, rebounding gently from last week’s losses that followed bumper interest rate hikes.

“We really don’t have much volume in markets as traders are away for holidays,” AvaTrade analyst Naeem Aslam told AFP.

“Markets are grinding higher as some traders are optimistic about valuations which seem to them somewhat attractive.”

Heading into the afternoon, London rose 0.5 percent, while Frankfurt and Paris each won 0.4 percent in value.

“Overall I think it’s going to be pretty subdued trading, given the lack of significant data to react to,” noted analyst Susannah Streeter at stockbroker Hargreaves Lansdown.

Asian indices however fell on lingering concern over a possible global recession caused by moves to fight inflation from top central banks.

Equities took a turn south last week after monetary policymakers around the world signalled that while price rises appeared to be stabilising, more work would be needed to get them under control.

All three main indexes on Wall Street ended sharply lower Friday after the Federal Reserve warned it would continue tightening monetary policy into 2023.

That was followed by similar warnings from the European Central Bank and Bank of England, while data suggested economies were feeling the pinch, dealing a blow to sentiment heading into the Christmas break.

“With no shortage of economic headwinds, investors struggle to find something cheerful about this holiday week after the two most dominant central banks cast a pall over the proceedings,” said SPI Asset Management’s Stephen Innes.

The US sell-off fed through to Asia, where Tokyo shed more than one percent, while Hong Kong, Shanghai, Taipei, Manila, Bangkok, Jakarta and Wellington were in negative territory, but Singapore and Mumbai edged up.

Adding to the downbeat mood was a spike in Covid-19 cases in China following the country’s reopening after almost three years of strict containment measures.

While the move is expected to boost the world’s number two economy, there is a worry that businesses and China’s health system will be hit in the near term.

Still, Beijing flagged a number of measures aimed at kickstarting growth next year, including support for the beleaguered property sector.

An expected pick-up in Chinese demand helped propel oil prices moderately higher.

– Key figures around 1200 GMT –

London – FTSE 100: UP 0.5 percent at 7,365.99 points

Frankfurt – DAX: UP 0.4 percent at 13,945.14

Paris – CAC 40: UP 0.4 percent at 6,481.03

EURO STOXX 50: UP 0.3 percent at 3,815.94

Tokyo – Nikkei 225: DOWN 1.1 percent at 27,237.64 (close)

Hong Kong – Hang Seng Index: DOWN 0.5 percent at 19,352.81 (close)

Shanghai – Composite: DOWN 1.9 percent at 3,107.11 (close)

New York – Dow: DOWN 0.9 percent at 32,920.46 (close)

Euro/dollar: UP at $1.0607 from $1.0586 on Friday

Pound/dollar: UP at $1.2189 from $1.2148

Euro/pound: DOWN at 87.02 pence from 87.14 pence

Dollar/yen: DOWN at 136.24 yen from 136.60 yen

West Texas Intermediate: UP 0.6 percent at $74.74 per barrel

Brent North Sea crude: UP 0.7 percent at $79.62 per barrel

Twitter users voted on Monday to oust controversial owner Elon Musk as CEO in a poll he organized and promised to honor, just weeks after he took charge of the social media giant.

A total of 57.5 percent of more than 17 million accounts voted for him to step down. Musk, who is also the boss of car maker Tesla and rocket firm SpaceX, has not yet responded.

He took over Twitter on October 27 and has repeatedly courted controversy, sacking half of its staff, readmitting far-right figures to the platform, banning journalists and trying to charge for previously free services.

Analysts have also pointed out that the stock price of Tesla has slumped by one-third since the Twitter takeover.

“It’s hard to ignore the numbers since [Twitter] deal closed,” tweeted investment expert Gary Black, saying he reckoned Tesla’s board was putting pressure on Musk to quit his Twitter role.

In discussions with users after posting his latest poll, Musk claimed he had no successor in mind and renewed his warnings that the platform could be heading for bankruptcy.

– Dorsey bemused –

The unpredictable billionaire posted the poll shortly after trying to extricate himself from yet another controversy.

On Sunday, Twitter users were told they would no longer be able to promote content from other social media sites.

But Musk seemed to reverse course a few hours later, writing that the policy would be limited to “suspending accounts only when that account’s *primary* purpose is promotion of competitors”.

“Going forward, there will be a vote for major policy changes. My apologies. Won’t happen again,” he tweeted.

The attempted ban had prompted howls of disapproval and even bemused Twitter co-founder Jack Dorsey, who had backed Musk’s takeover.

He questioned the new policy with a one-word tweet: “Why?”

– ‘Perfect storm’ –

Musk has generated a series of controversies in his short reign.

Analyst Dan Ives from Wedbush called his tenure a “perfect storm”. 

He flagged that “advertisers have run for the hills and left Twitter squarely in the red ink potentially on track to lose roughly $4 billion per year we estimate”.

Shortly after taking over the platform, Musk announced the site would charge $8 a month to verify account holders’ identities, but had to suspend the “Twitter Blue” plan after an embarrassing rash of fake accounts. It has since been relaunched.

On November 4, with Musk saying the company was losing $4 million a day, Twitter laid off half of its 7,500-strong staff.

Musk also reinstated the account of Donald Trump — though the former US president indicated he had no interest in the platform — and said Twitter would no longer work to combat Covid-19 disinformation.

In recent days, he suspended the accounts of several journalists after complaining some had published details about the movements of his private jet, which he claimed could endanger his family.

Employees of CNN, The New York Times and The Washington Post were among those affected in a move that drew sharp criticism, including from the European Union and the United Nations.

The Washington Post’s executive editor Sally Buzbee said the suspension of journalist Taylor Lorenz’s account “further undermines Elon Musk’s claim that he intends to run Twitter as a platform dedicated to free speech”.

Some of the suspended accounts have since been reactivated.