Twitter accused Microsoft of inappropriately harvesting the social media company’s data to build apps, according to a Friday report in the New York Times. The news comes exactly one month after Microsoft dropped Twitter from its advertising platform, which prompted an angry Tweet from world’s saltiest billionaire Elon Musk.
“They trained illegally using Twitter data. Lawsuit time,” Musk tweeted then.
The charge comes in a letter addressed to Microsoft CEO Satya Nadella, sent by Alex Spiro, one of Musk’s personal attorneys. “As you are no doubt aware, for years, Microsoft has used Twitter’s standard developer APIs free of charge in order to benefit from Twitter’s data and services in key Microsoft products that generate tens of billions of dollars in revenue for Microsoft annually,” Spiro wrote. The letter lays out a number of allegations, and demands an audit of all the ways Microsoft collected and used Twitter’s suddenly precious data.
Usually the context comes after the content in an article, but let’s start with the fun part. Mr. Billionaire Business Maverick has a little pattern going here. At Twitter, Elon keeps making wild decisions that, at least according to social media pundits, seem impulsive and not well considered. When this affects big tech companies like Apple and Microsoft, they won’t put up with it, in part because they understand business is ostensibly about business, not feelings. Then Elon gets upset and calls them out on Twitter, all the while acting like he’s the one being reasonable. Here we go again!
If you want to understand this billionaire-on-millionaire drama (Microsoft’s Nadella is worth something like $861 million), you need three sentences-worth of technical knowledge. It’s worth it. Basically, Elon started charging for a tool that’s always been free. Microsoft didn’t want to pay for it, so it didn’t fork over any money, and Elon seems insulted.
Twitter is a platform, which means it hopes that other people will build apps and other cool stuff on top of it. To encourage that, Twitter provides an “application programming interface,” or API, a tool that lets computer programs talk to each other and exchange data. Other social media companies like Facebook and TikTok have APIs too, and they’re typically free because the arrangement is mutually beneficial. Ok, technology explainer over.
Twitter’s API was always free. Then Elon Musk showed up and said everyone had to pay for it. That’s abnormal—and antagonistic to the companies and developers who’ve spent years working with Twitter.
Microsoft is (or was) a regular user of Twitter’s API. No one had a problem with it, at least not out in any public temper tantrum kind of way. According to Musk’s threatening letter, Microsoft integrated the API with apps including Xbox One Social, Bing Pages, Azure, and the Microsoft Ads platform.
The letter says Microsoft used the API in a number of ways that violated Twitter’s terms of service. For one, Twitter throttles the rate at which you can collect data, but “Despite these limitations, the Microsoft Apps accessed Twitter’s APIs over 780 million times and retrieved over 26 billion tweets in 2022 alone,” the letter says. The letter also says Microsoft didn’t disclose all the ways it used Twitter data, which violates the terms of service as well. CNBC got a copy of the letter, you can read it here. Microsoft didn’t immediately respond to a request for comment. Twitter’s press email now automatically responds with a poop emoji.
Earlier this year, Musk announced that its once-free API would become a paid service. That had a number of consequences which Elon either didn’t think of or didn’t take seriously. One of them is it broke a lot of fun Twitter robots that everyone loves (like this one, which tweets whenever the New York Times prints a word that’s never been in the newspaper before). You can tell Musk didn’t think this plan through because he kept changing his mind about how it was going to work when people made fun of him.
The right to tweet or download tweets is something that a lot of organizations don’t seem willing to pay for. New York City, for example, said it would shutter its MTA bot which tweets about subway delays, until Twitter said, “Wait, actually, sorry, you don’t have to pay.”
Microsoft, too, said it wasn’t going to pay for the Twitter API. This is a much bigger deal, because Microsoft used the Twitter API to loop the social media company into its advertising system. Twitter wants most businesses to pay $42,000 a month to use the API. Microsoft’s response was essentially “No, thanks, we’re not going to pay for the right to share advertising revenue with you.”
This is what prompted Musk’s “Lawsuit time” tweet, and the threatening letter. If you unpack this for a moment, it doesn’t make much sense. If Microsoft was violating Twitter’s terms, that would be true whether or not Microsoft pays for the API. It almost sounds like protection money: you can break our rules, but only if you pay us. Twitter desperately needs ad money. The company makes almost every dollar of its revenue from ads, and Twitter’s list of big advertisers went off a cliff when Musk took over.
Advertising relies on what’s called “brand safety,” you want to be sure your ads don’t show up next to racism, for example, because that implies you support it. Too bad then, that hate speech skyrocketed on Twitter immediately after Musk bought the company. The concern isn’t hypothetical: Elon unbanned several famous white nationalists and then Twitter ran ads on their profiles.
This problem certainly relates to Musk’s recent decision to step down as CEO and put former NBCUniversal advertising honcho Linda Yaccarino in his place. (Elon is staying on as chief technical officer and executive chairman. So he’s Yaccarino’s subordinate and her boss at the same time. Wonder how that will go!)
Musk has a poor track record when it comes to going head-to-head with other big companies. Apple pulled back its ad spending on Twitter ads amidst the chaos of Elon’s early days. You might think you’d reassure companies who are worried your platform might make them look bad. But not Elon. He’s playing 4D chess. Musk lashed out at Apple, asking his millions of followers whether Apple made the move because it “hates free speech.” He also tweeted he was “going to war” with the iPhone maker, a message he later deleted.
Here’s how that “war” played out. Apple CEO Tim Cook invited Elon to visit the Apple campus. If you know what they talked about, I am begging you to email me, because that same day, Musk completely changed his tune. Not only did he stop criticizing Apple, he started praising the company, thanking Cook for his hospitality and groveling about the company’s “beautiful HQ.” Whatever Cook said to Elon, it turned him from a threat into a lap dog.
Perhaps Musk’s war on Microsoft will go better. At least in this case, there is a slightly better reason for the vitriol.
There is a broader debate that’s going on in the tech industry. For about a decade, all of the big technology companies walled off their own little gardens. Meta did social media. Google had web tools like Search, Gmail, Chrome, and YouTube. Apple made phones. Microsoft made boring software for businesses. Twitter, a tiny compared to these giants, was just happy to be there. There was a lot of crossover, but most of these businesses really didn’t compete with each other. They all had their own things going.
Suddenly, that’s changing. Microsoft is gunning for Google’s search business. Apple wants a cut of Meta’s targeted ad money. And almost everybody, out of nowhere, is in a fierce battle over AI. You need a lot of data to train AI algorithms, and companies like Twitter and Reddit had a lot of it lying around.
Musk really wants to be a part of this AI party. He put $50 million or so into OpenAI in its early stages (Musk keeps giving different numbers). Musk recently told Tucker Carlson that he’s going to build an AI called “TruthGPT,” an anti-woke alternative to ChatGPT. Fortunately for anyone who likes hearing accurate things about racism and history, you can bet you’ll never see TruthGPT. If there’s one thing you can count on, it’s that the self-sabotaging humiliation machine that is Elon Musk doesn’t fulfill his promises.
For a conflict that supposedly all about business, there seem to be a lot of emotions involved. This could be related to the fact that Microsoft was one of many organizations that declined to give Musk a bail out when he tried to change his mind about buying Twitter. Text messages that came out in a lawsuit showed Musk and Nadella were in contact, and apparently Musk shared some neat ideas about Microsoft teams, the company’s chat software. Nadella texted Musk “will for sure follow-up on Teams feedback!” We don’t know, however, whether that follow up ever came.