The Journal. - What's Behind the Arrest of the Telegram CEO?

Episode Date: September 3, 2024

Pavel Durov, the CEO of the messaging app Telegram, was arrested in France last month. He was charged with a host of crimes, including complicity in distributing child pornography, illegal drugs and hacking software on the app. Matthew Dalton reports on how the charges represent a major escalation by the French government in holding tech executives accountable for the content that appears on their platforms. Further Reading: - Telegram CEO Pavel Durov Charged by French Authorities  - Exclusive | Telegram Founder Pavel Durov Was Wooed and Targeted by Governments  Further Listening: - Is Fighting Misinformation Censorship? The Supreme Court Will Decide.  - What Happens to Privacy in the Age of AI?  - Meta Is Struggling to Boot Pedophiles Off Facebook and Instagram  Learn more about your ad choices. Visit megaphone.fm/adchoices

Pavel Durov is the billionaire CEO of messaging app Telegram. And about 10 days ago, he got on a private plane headed to France. Pavel Durov was flying into Le Bourget airport, which is a bit north of Paris. It's one of the airports around Paris that people who have private jets fly into. He landed on Saturday evening, and he was taken into custody by French gendarmes, and told that he was being detained

as part of a French judicial investigation into his company Telegram. Pavel Durov, the founder and president-director of the Crypto Telegram Foundation. The 39-year-old billionaire dubbed Russia's Mark Zuckerberg arrested shortly after landing in France Saturday night. Pavel Durov was arrested on arrival on French soil. Representatives say there was a warrant for his was arrested on arrival on French soil. Representatives say there was a warrant for his arrest as part of a French investigation. French authorities are investigating Durov for crimes that allegedly happened on Telegram.

He's been charged with complicity in the distribution of child pornography, in the sale of illegal drugs and in the distribution of hacking software. Telegram said that Durov has nothing to hide and that it's waiting for a, quote, prompt resolution of the situation. Our colleague Matthew Dalton says Durov's arrest is the latest in an ongoing conflict between European regulators and social media companies. France and Europe has opened up a new front in the government's struggle with online platforms with what they should and should not be allowed to do and the content that

they should be allowed to disseminate. So this really escalated that battle. Welcome to The Journal, our show about money, business, and power. I'm Kate Leinbach. It's Tuesday, September 3rd. Coming up on the show, why this CEO of Telegram was arrested in France. Your team requested a ride, but this time not from you. It's through their Uber Teen account. It's an Uber account that allows your teen

to request a ride under your supervision with live trip tracking and highly rated drivers. Add your teen to your Uber account today. ["The Daily Show Theme"] Only Murders in the Building is back for a new season on Disney+. Steve Martin, Martin Short and Selena Gomez return alongside a star-studded guest cast as the trio takes on Hollywood, where a studio is making a film about their podcast. Amidst all the glitz and glamour,

there's a new mystery. Who tried to kill Charles? Only Murders in the Building Season 4, streaming August 27th exclusively on Disney+. Sign up now at DisneyPlus.com. Pavel Durov was born in the former Soviet Union in 1984, and he spent some of his childhood in St. Petersburg. He had the reputation as a kind of whiz kid, computer science, mathematics, prodigy. Myself, I was just the best student at my school. Also did some victories in local competitions in several areas. That's Durov in a recent interview with Tucker Carlson.

In the university, I was building websites for my fellow students. And as a result, I started a company that became what they called the Facebook of Russia. That company is called VKontakte, or VK. It became popular with millions of users across Russia and Eastern Europe, earning Durov the reputation as Russia's Mark Zuckerberg. But in 2013, things got tricky for Durov. As protests mounted in Ukraine, dissidents Dissidents organized on VK, drawing the attention of the Kremlin. In 2013, he came under pressure from the Kremlin to share user data of Ukrainian protesters who were at the time challenging the pro-Russian government in Kiev. He said he refused the entreaties from the Kremlin to turn over data about and user information

about those protesters and said it would be a betrayal to his Ukrainian users. And so the next year, he left Russia, said he could no longer abide the pressure from the Kremlin. Here's Durov talking about that time in the interview with Tucker Carlson. I left behind probably a comfortable life, but for me, it was never about becoming rich. For me, everything in my life was about becoming free. After leaving Russia, Durov stepped down as CEO of VK

and sold his stake. He turned his focus to a newer venture, Telegram. If VKontakte is like Facebook, Telegram is more like WhatsApp, with a dash of Discord. It offers both messaging and chat-like functions as well as social media-like functions. So it's got channels that you can subscribe to and anybody can start a channel. But the thing that sets Telegram apart from many messaging apps is its absolute commitment to privacy. The company offers, quote, secret chats with end-to-end encryption

that can self-destruct. And it says it protects user conversations from, quote, snooping third parties, such as officials. This was what Durow was passionate about. He envisioned it as a place where people could communicate safely without intrusion from government authorities, without the interference of the government. Telegram's commitment to privacy has been a point of pride for Durov.

Here he is in 2015. Through over two years of our existence, we haven't disclosed a single byte of data to third parties, including governments. And it was not easy. And where is Durov at this point? He's left Russia. Where did he end up? He bounced around the world for a number of years.

He got citizenship in St. Kitsa Nevis, Where did he end up? He bounced around the world for a number of years. He got citizenship in St. Kitts and Nevis, which is a small island in the Caribbean. Eventually he settled in Dubai, in the United Arab Emirates, which on its face is a somewhat strange place for a company that does not sit well with authoritarian regimes because the United Arab Emirates sharply restricts political freedoms.

But there he was, and so he set up his company there. Years later, Durrov also got his citizenship in the UAE and in France. And the company, while based in Dubai, wasn't exactly settled there. It was not a company like Facebook or TikTok or Google that has thousands and thousands of employees and engineers and lawyers and government relations executives.

It was kind of the opposite of that. It was kind of a handful of people who were running this app. If you look at his social media feed, It was kind of the opposite of that. It was kind of a handful of people who were running this app. If you look at his social media feed, it shows him working from everywhere in the world, working from a castle in Umbria or from the south of France, from Cannes. In fact, at the time, he was bringing his engineers around with him to these various countries.

It was a company that did not need a headquarters in a way. Nomadic company. It was a totally nomadic company. And how successful has it been? Well, it's been successful. I mean, the platform has 900 million users. It now has a premium membership where you have to pay to have certain functionalities.

So that's a revenue stream for the company. So it's very successful. Durov became known as a protector of free speech. Around the world, Telegram provided a safe encrypted platform for dissidents to organize against oppressive governments. But the same tool that gave dissidents cover also protected people with more harmful aims, like terrorists. So if you recall in 2015 and 2016, France was hit with some large-scale terror attacks. And that was at a time when Islamic State was on the rise in the Syrian war zone and those

attacks were carried out by Islamic State commanders and operatives going back and forth from Syria to France. The first attack happened outside France's national stadium when two suicide bombers blew themselves up within 10 minutes of each other. A third suicide attack took place less than half an hour later. After that, we began to see a number of attacks where Islamic State commanders in Syria were using Telegram to reach out to French people living in France, using Telegram to spread their propaganda and using it to plot attacks and to guide them. And that's really when French security services began to be very concerned about Telegram

being used for those purposes. In 2015, Durov was asked in an interview if he was concerned that Islamic State used Telegram. Do you sleep well at night knowing terrorists use your platform? You know, that's a very good question, but I think that privacy ultimately, and our right for privacy, is more important than our fear of bad things happening, like terrorism. In France, Telegram was caught right between the laws that protect freedom of speech

and those that protect national security. We know that from talking to French officials that Telegram was a big concern for the country's counterterrorism services, as were a number of other online platforms and social networks. The thing that separated Telegram, even from the very beginning,

was that they were not going to cooperate with security services in terms of taking down Islamist content, banning users who were attempting to spread Islamist content, banning users who were attempting to spread Islamist propaganda. But then the laws changed. That's next. In recent years, there's been growing regulatory concerns about illegal activity on all kinds of social media platforms, from Facebook to X, WhatsApp to Telegram. Here's our colleague Matthew Dalton again.

Europe has become, and the West generally speaking, has become more and more concerned about online platforms being used for all kinds of undesirable and potentially illegal activities. You know, France has dealt with a lot of online manipulation, people trying to spread misinformation on the platform. Those concerns grew and grew then. The spread of child pornography on some of these platforms, that has been a concern. Illegal drugs being sold.

These worries mounted, you know, it was like a kettle, you know, boiling and boiling, and finally the bell started peeling. To address those worries, the European Union enacted a new sweeping law, the Digital Services Act. Well, the European Union's Digital Services Act or DSA is rolling out a framework that will reshape big tech operations. Effective today, online powerhouses like Facebook will be subject to a new set of rules. Now these rules cover everything from content

moderation to user privacy to transparency in operations. It requires social media platforms to deal with content that is illegal or harmful by having procedures in place to remove it when flagged by users and governments. The law came into effect late last year. Now in Europe, that illegal content can be posts that incite racial hatred, incite anti-Semitism. They can be offers to exchange, to buy and sell illegal drugs, unauthorized software, child pornography. It's quite broad in Europe. The law also requires companies to cooperate with European authorities in criminal investigations.

And much of big tech, companies like Meta, TikTok, and Amazon, say they put in place new systems to comply. But the French government says Telegram hasn't cooperated. I think Telegram was a particular problem for them. And the reason why is because they did not respond to any judicial demands for information, to judicial demands for cooperation, according to a person familiar with the company and close to the company, is that they had one email inbox where judicial authorities could send subpoenas and other law enforcement requests,

which the company rarely checked and periodically deleted without even reading. checked and periodically deleted without even reading. So that gives you an idea of the sense of how the company viewed its cooperation with law enforcement authorities. Now, on the other hand, Telegram says it complies with the Digital Services Act. Earlier this year, prosecutors in Paris opened an investigation into child pornography they say is shared on Telegram. Prosecutors say they asked Telegram to cooperate with the investigation.

Why did French prosecutors go after Durev and not Telegram, the company? Because you can't arrest a company, you can't put a company in prison. And at some point, I think that they were trying to get a response to their requests and demands from the company. And by their account, there was no response. They were not getting any kind of cooperation. So they had to go after the people running the company. And that led to Durov's arrest in Paris. Pavel Durov was held when he landed on a private jet at an airport outside

Paris. The Telegram founder is accused of turning a blind eye to criminals using the platform and for failing to disclose details to authorities. and for failing to disclose details to authorities. Days later, Durev was released after posting a 5 million euro bail. He's forbidden from leaving France and must appear at a police station twice a week. If convicted, he faces up to 10 years in prison.

Telegram said it complies with the digital services law and that it is quote absurd to hold Durav responsible for abuse that happens on the platform. Are there implications for the other platforms like WhatsApp and Signal? Yeah that's a really good question because well we know first of all that there are a lot of people in the industry are looking at what has happened to Dorov and thinking, well, if I fly into France or the European Union, am I going to be arrested? And one thing that as far as we can really tell's Telegram apart is this anti-authoritarian ethos that has led Dorov and the other executives in the company to not cooperate at all with

law enforcement and investigations. So the other big social media companies, they have major legal departments that are really on top of this stuff. departments that are really on top of this stuff. I think there is a sense in which Telegram is very different. What does this say to you about the relationship between these tech platforms and European regulators and European law? I think it says that the Europeans,

and the French in particular, are determined to enforce the law. They're tightening the screws, and they're not going to allow a company, even one that's not based in Europe, they're not gonna allow a company like that to flout the law in their eyes. So what does this mean for Telegram and Derov?

Well, first of all, I mean, he can continue running Telegram as he has before. He'll be in France, but he can continue to do that. Question is, will he dare to continue to do that in the way that he can continue to do that. The question is, will he dare to continue to do that in the way that he has up to now with very little moderation, this hands-off, anti-establishment, anti-authoritarian style, given that the French are saying that he's breaking the law by doing so? So, you know, he might have to very quickly change the operating MO of Hologram and bring it into compliance with French and European laws best he sees fit. That's all for today, Tuesday, September 3rd.

The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Alan Cullison, Joel Sheckman, and Anne Simmons. Thanks for listening. See you tomorrow.