Elon Musk, in his confidentially filed countersuit in Delaware court, relied on Twitter’s litigation in India to counter the social media giant’s claim of breach of their merger agreement by Musk.
Musk has claimed that Twitter failed to disclose its litigation with and the investigation by the Indian government. According to Musk, Twitter initiated risky litigation against the Indian government—thereby placing Twitter’s third largest market at risk.
Musk has claimed that Twitter’s decision to challenge the Indian government’s decisions is a departure from the ordinary course as it has in the past followed obligations imposed by governments, including going as far as blocking pro-Ukrainian accounts for the Russian government.
Referring to India’s IT Rules, Musk has argued that India’s information technology ministry imposed certain rules in 2021 allowing the government to probe social media posts, demand identifying information, and prosecute companies that refused to comply.
Musk has said that while he is a proponent of free speech, he believes that moderation on Twitter should “hew close to the laws of countries in which Twitter operates.”
It has been claimed by Musk that as a result of India’s new rules, Twitter faced various investigations by the Indian government, requests to moderate content, and requests to block certain accounts. India is Twitter’s third largest market, and thus any investigation into Twitter that could lead to suspensions or interruptions of service in that market may constitute an MAE, which is a material adverse event.
Around July 6, 2022, Twitter launched a legal challenge against India’s government in court, challenging certain demands made by the government—suggesting that Twitter was under investigation between the signing of the Merger Agreement and the filing of its legal challenge.
It has been stated, Twitter determined to challenge the Indian government in a lawsuit rather than follow its instructions pursuant to 2021 Information Technology rules. Musk and buyers were not given notice of Twitter’s decision to litigate against the Indian government and were not asked to provide consent.
According to Musk, there’s been a breach of the agreement by Twitter as Musk and other buyers were not given notice of Twitter’s decision to litigate with India.
Dispute with India was publicly reorder, not cited as basis for termination till now
Twitter admitted that it did not contact Musk regarding its interactions with the Indian government. Twitter has averred that its publicly reported dispute over blocking orders issued by the Indian government was not cited a purported basis for termination by Musk parties until filing of the Counterclaims.
Disclosure of litigation with India not required under merger agreement
Twitter has denied Musk’s allegations that the investigations had to be disclosed to Musk parties under Section 4.11 of the merger agreement. It has said that the section does not require the disclosure of the company’s interactions with the Indian government.
India is not Twitter’s third-largest market
Twitter has denied that India is its third-largest market. It has also denied the allegations any investigation into Twitter that could lead to suspensions or interruptions of service in that market may constitute an MAE. According to Twitter, these are hypothetical statements or legal conclusions to which no response is required.
Twitter’s interactions with Indian Regulators heavily documented
Twitter has further responded that media outlets and Twitter’s own transparency disclosures have heavily documented the company’s interactions with Indian regulators since the Indian government announced restrictive regulations in February 2021, including requests by the Indian government that Twitter block certain accounts or otherwise moderate content.
Legal challenge against Indian govt contemplated by law itself
While referring to its petition to July 5, 2022 petition to the Karnataka High Court, Twitter has admitted that it brought a legal challenge against the Indian government challenging certain blocking orders issued by the Indian government under Section 69A of the Information Technology Act, directing Twitter to remove certain content from its platform, including content from politicians, activists, and journalists.
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Twitter has averred that its legal challenge is contemplated by the law itself, which allows companies or persons to challenge government blocking orders.
Twitter has further averred that its legal challenge is consistent with its global practice of challenging government requests or laws where such requests are not authorized or properly scoped under local law, are procedurally deficient, or as necessary to defend its users’ rights, including freedom of expression. Twitter has also denied the allegations that its legal challenge is related to any “investigation” by the Indian government.
Twitter objects to govt requests/laws when necessary to defend its users rights
While admitting that it has filed suit to challenge certain blocking orders by the Indian government, Twitter has averred that it may withhold access to certain content on a valid request.
Twitter has averred that if it receives a valid and appropriately scoped request from an authorized entity, it may withhold access to certain content in the specific jurisdiction that has issued the valid legal demand or where the content has been found to violate local laws.
Twitter has however said that it routinely pushes for limitations on, objects to, or otherwise challenges government requests or laws where such requests are not authorized or properly scoped under local law, are procedurally deficient, or as necessary to defend its users’ rights.