THE BELL WEEKLY: How Telegram’s hands-off approach backfired

Hello! This week we again look at the case against Telegram founder Pavel Durov — how the site’s lax approach to content moderation put the service at the heart of the online gray economy, and landed Durov in a French jail. We also spoke to an expert on autocratic regimes about how the end of the Putin regime could come about.

Pavel Durov opposed strict moderation — it could cost him his freedom, and his company

Telegram founder and Russian tech icon Pavel Durov spent just 96 hours in a French jail. Released on house arrest, the case is far from over, and will have repercussions way beyond him and his platform. The saga looks set to go a long way towards shaping the future relationship between Western democratic governments and internet platforms in general.

• Pavel Durov’s four-day detention came to an end on Aug. 28, when a Paris judge granted him bail. Durov was officially indicted on a string of charges — all related to Telegram’s “complicity” in crimes plotted, planned and executed over the platform. Although out of jail, Durov is obliged to report to the police twice a week and cannot leave France. The substance of the allegations against him can be summed up in a single phrase: Telegram has consistently failed to cooperate with French police in its attempts to investigate crimes committed with the help or, or explicitly enabled by, the platform.
• The Bell spoke with people close to Telegram’s leadership and those working for the platform about how Telegram moderates content and typically doesn’t cooperate with Western law enforcement bodies — and how this set Durov on a collision course with French authorities.
• Telegram has just 50 employees — 30 of which are developers, Durov said in an interview with Tucker Carlson this spring. He contrasted his company’s lean approach with rival big-tech companies that, he said, had bloated headquarters and inefficient processes. The company has no HR department or many other divisions that would be mandatory for a large business. It’s reasonable to conclude from this that there has never been a significant number of people working on content moderation for the service. Everything that can possibly be automated is automated, one source told The Bell.
• Telegram has three levels of moderation, said Fedor Skuratov, creator of the Combot moderation service. The first is in chats, communities and channel comments. These are moderated by admins, using outsourced solutions. Level two is a complaints system. Any user can report any public post (though not private ones) using a “Report” button in the app. Users can do this to highlight pirated content, threats, pornography or child abuse. External contractors moderate these complaints — but nobody knows who they are or how many are involved. The third level of moderation is an algorithm that is mostly used to filter spam in private messages based on suspicious patterns of behavior associated with bots. Automated moderation can be used in group chats, but it tends to be unpredictable and therefore the feature is rarely activated. 
• The weakness of this moderation framework is partly explained by an approach purposefully adopted by Telegram’s creators. Moderation options exist on a spectrum. At one extreme is Meta, which blocks or suspends users for even minor infringements. At the other end is Telegram, which argues that censorship benefits nobody and it should staff as hands-off as possible. “Durov believes that the platform should not interfere with what people write to one another in private messages on Telegram,” one of his acquaintances explained. For example, as long as pornography is not published on public channels, leave it alone. “The most important thing for moderation on Telegram is user comfort, so that they don’t receive unwanted messages. There are essentially no restrictions on users being able to find something on Telegram for themselves," explained Skuratov.
• A second reason behind the approach is more of a business factor: Telegram’s aversion to hiring more staff. The company believes this would strip them of their advantages of being a small, flexible business, as well as threaten security. “Hiring human moderators is a one-way street — there will never be enough of them,” Skuratov said. “And there is a high risk of leaks: the more people with access to data, the worse it is for security,” he added. When Telegram was just starting out, this approach worked. But the problem has grown as it became a service with hundreds of millions of users — making it impossible to comply with even its own small set of rules. As a result, specific content began to leak into the public parts of Telegram and due to a lack of people and money, Telegram could not cope.
• There’s another important business factor. Almost from day one, Telegram wanted to act not just as a messenger, social network and blog platform, but also as a marketplace. Back in 2015, Telegram introduced the opportunity to create bots that made it easy to set up a simple online store inside the app. But unlike the Apple or Google stores, Telegram had no moderation of these mini-apps, meaning developers could release anything they wanted without any meaningful checks. This lowered the entry threshold, paving the way for a plethora of different businesses to flock to the platform — including those operating in the black, or gray market. For instance, the platform became famous years ago in Russia as a hotbed for the trade of personal data — with people able to buy gigabytes of information, hacked or leaked, for next to nothing.

What next for Telegram?

• Telegram’s financial position was already uncertain before Durov’s arrest. From launch, the company struggled to monetize the platform. At first it was financed by Durov’s personal funds from the sale of VKontakte. Then the company tried to launch its own crypto token, which was successful with some of the world’s most well-heeled investment funds — but was ultimately blocked by the US Securities and Exchange Commission. Over the last three years, Telegram has turned to loans, having placed bonds worth more than $2.3 billion.
• Durov’s arrest could tip the company into a financial crisis, the Financial Times wrote after analyzing the company’s previously secret financial statements for 2023. Telegram has no money of its own and is massively unprofitable, the FT found. In 2023, the platform had revenues of $342 million, posting an operating loss of $108 million and a post-tax loss of $173 million. The company partially covered those losses by increasing the value of crypto assets on its balance sheet, which were valued at almost $400 million.
• The debt on the Telegram’s bond-issuing spree is due to be paid off by March 2026. If the company conducts an IPO before then, the bonds are converted into shares at a discount — a good deal for Telegram. If not, the platform must repay bondholders with interest (at a rate of 7% per year). With Durov facing a lengthy legal saga that could end in years of prison time, it’s unclear whether a stock market launch is still on the table. The FT suggests not: the case against Durov is already causing too much damage to an already unprofitable business.
• Investors are nervous. Telegram bonds fell below 90 cents on the dollar after Durov was arrested. And Telegram is in no rush to reassure its backers. According to one bond holder, there has been no contact from the company’s representatives in the past week.

Why the world should care

For the first 10 years of Telegram’s existence, Pavel Durov managed to strike a balance between privacy and public safety. If Telegram had found a more reliable means of monetization, it might well have had the funds to pay more attention to security and moderation, as its bigger competitors do. We will soon find out whether the service will get a second chance. In post-Soviet countries, it’s worth remembering, this is not just about the survival of gray businesses and shady online marketplaces, but of one of the last major platforms for free speech.

‘Putin could fall if he loses the support of a few hundred people’

The Bell editor Viacheslav Dvornikov spoke to political scientist Marcel Dirsus, author of the acclaimed new book, "How Tyrants Fall," about what his study of dictatorships and autocrats suggests is in store for the Putin regime — and how his demise could come about. The full interview is available here.

Despite their outward monolithic appearance, autocratic regimes have a number of weaknesses, says Dirsus. But the bad news is that democratization after dictatorships is extremely rare. Based on a study of regime change and dictatorships over more than half a decade, Dirsus found more than two-thirds of tyrants end up in prison, go into exile, or are killed upon leaving power. If they are removed by nonviolent uprisings, it is ten times more likely that a country will transition to democracy than if they are deposed by an insider coup or violent rebellion.

“For personalist dictatorships like Putin’s regime, the biggest threat typically comes from regime insiders. The less democratic a regime becomes, the more a dictator relies on a very small number of people in order to stay in power,” Dirsus said. “The flip side of that is that Putin could fall if he loses the support of perhaps only a few hundred people.”

The most likely way Putin is removed from power is from disgruntlement from “palace elites or men with guns,” he argued, pointing to the Wagner mutiny last year as an example. Other regime insiders could move against the Kremlin leader if “they believe they could gain more power or wealth” with somebody else wearing the crown. “That scenario does not guarantee that Russia will transition to a democracy. It is just as easy to imagine a situation where another dictator assumes power instead.” Between 1950 and 2012, 473 authoritarian leaders lost power with 65% removed by regime insiders.

Street protests are unlikely to oust Putin due to the current set-up of the Russian state and society, Dirsus argued. “Truth be told, the influence of ordinary Russians is severely limited. And that's, of course, no coincidence, because the Russian government has spent a lot of time and resources reducing the threat from the street.”

But dictators can be toppled extremely quickly, including from positions of apparent stability, Dirsus said. “Whether it's Vladimir Putin, Kim Jong-un, or dictators in the past, all of them rely on other people to stay in power. The moment these people withdraw their support, everything can change in a moment. Many of these regimes appear very stable — until they aren’t. There are tipping points where dictators suddenly seem weak, and the people around them quickly decide to start opposing them rather than supporting them.”