Telegram CEO arrest is fuzzy warning to Big Tech

Social dilemma. The arrest of Telegram founder Pavel Durov has energised both critics of Big Tech and ardent libertarians, who fear a fresh crackdown on free speech. The latter fears look overdone, given the specific nature of the case. Yet there’s still a warning to rivals like X's owner Elon Musk and Meta’s Mark Zuckerberg.

It’s easy to see why Durov’s arrest, carried out by French prosecutors on Saturday, could be seen as a new front in global regulators’ and governments war on social media and free speech, as suggested by Elon Musk. It’s the first time a CEO of a large, global messaging platform has been arrested. And Durov himself has a reputation for standing up against powerful governments: he fled Russia in 2014 after refusing to turn over user data from his previous company, the Facebook-like Russian platform VKontakte, to the country’s authorities.

Yet scratch beneath the surface and there’s little immediate read across for other social media platforms. Telegram, like rivals Meta's WhatsApp, provides messaging services and allows its 950 million monthly users to broadcast thoughts and media to followers. But Durov has of the group’s lower number of employees and “super efficient” structure, whereas rival groups like Meta have armies of content moderators.

And the reasons for Durov’s arrest look specific: the investigation relates to complicity in enabling child abuse, the sale of illicit drugs, and money laundering. Prosecutors also mentioned unwillingness to cooperate with law enforcement, something Telegram had been accused of before: last year a Brazilian court ordered the app to be blocked for failing to sufficiently help with an investigation into neo-Nazi groups. Telegram said in a statement that the group abides by EU regulations and that Durov "has nothing to hide".

Gung-ho regulators are unlikely to find it so easy to target other CEOs. Durov is a French citizen, allowing the country's prosecutors to pursue him in France where, according to one lawyer, it is easier to target employees or directors for the misdeeds of their companies.

Yet the arrest may still have implications for other platforms. Telegram is no minnow: its business stretches from India to Russia and Europe and it has raised funds from institutional players like the UAE’s Mubadala. If Durov is charged, a global scandal may galvanise politicians and regulators to step up demands for social media platforms to take accountability for their content and do more to moderate it.

The scandal also highlights the limits of current regulation: Telegram only had 41 million users in the European Union in the six months to February, below the bloc’s Digital Services Act threshold of 45 million. That means it is not categorised as a very large online platform, and not subject to stricter transparency and content moderation rules. Durov’s case is unique, but the fallout may be widespread.

Context News

Pavel Durov, the Russian-born founder of messaging app Telegram, was arrested in France as part of an investigation into crimes related to child pornography, drug trafficking and fraudulent transactions on the platform, French prosecutors said on Aug. 26. Durov was arrested at Le Bourget airport outside Paris shortly after landing on a private jet late on Aug. 24 and placed in custody. In a subsequent statement, Paris prosecutor Laure Beccuau said Durov was arrested as part of a probe into an unnamed person launched by the office's cybercrime unit on July 8. The investigation is into suspected complicity in various crimes including running an online platform that allows illicit transactions, child pornography, drug trafficking and fraud, as well as the refusal to communicate information to authorities, money laundering and providing cryptographic services to criminals, the statement said. Durov can be held until Aug. 28, it added. French President Emmanuel Macron wrote on Aug. 26 on social media platform X that there was no political motive in the arrest. He added that France remains deeply committed to lawful free speech. "Telegram abides by EU laws, including the Digital Services Act — its moderation is within industry standards and constantly improving," Telegram said in a statement on the arrest. "Telegram's CEO Pavel Durov has nothing to hide and travels frequently in Europe," it said. "It is absurd to claim that a platform or its owner are responsible for abuse of that platform." Telegram has 950 million monthly active users, Durov said on July 22. Durov, who fully owns Telegram, said in a Financial Times interview on March 11 that the company had “been offered $30 billion-plus valuations” from potential investors including “global late-stage tech funds”. Telegram in 2021 raised over $1 billion in debt financing, including a sale of $150 million five-year convertible bonds to Mubadala Investment Company and Abu Dhabi Catalyst Partners.