The Board of Directors for Twitter has reportedly reined themselves in and now plans to go along with the demands from Elon Musk to hand over their internal data in the wake of Musk threatening to terminate his planned $44 billion purchase of the company for not giving the details in relation to just how many bot account there are on the platform.
“The information could be provided as soon as this week,” read a report from The Washington Post. “Currently some two dozen companies pay for access to the trove, which comprises not only a real-time record of tweets but the devices they tweet from, as well as information about the accounts that tweet.”
The legal representation for Musk stated in a recent letter sent to the general counsel and Vijaya Gadde, the head of policy, legal and trust, for Twitter that stated that the company was “actively resisting and thwarting his information rights” as was agreed to in the recent contract.
“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” stated the letter.
The number of fake or bot accounts across the platform could end up inflating the company’s ad revenue and thus make Musk try and renegotiate just how much he is willing to pay for the company.
In an announcement sent out this past Monday, Texas Attorney General Ken Paxton (R) stated that his office had opened up an investigation into Twitter “for potentially false reporting over its fake bot accounts.”
Paxton stated via a press release that the investigation centers on finding out whether or not Twitter stands in violation of the Texas Deceptive Trade Practices Act.
Paxton’s office released a statement, saying:
On Twitter, ‘bots’ are automated, non-human accounts that can do virtually the same things as real people: send tweets, follow other users, and like and retweet others’ posts. Spam accounts like these inflate followers and reach, and often push deceptive and annoying activity. Bot accounts can not only reduce the quality of users’ experience on the platform but may also inflate the value of the company and the costs of doing business with it, thus directly harming Texas consumers and businesses.
Twitter has received intense scrutiny in recent weeks over claiming in its financial regulatory filings that fewer than 5% of all users are bots, when they may in fact comprise as much as 20% or more. The difference could dramatically affect the cost to Texas consumers and businesses who transact with Twitter.
To address this concern, Attorney General Paxton issued a Civil Investigative Demand (CID) to investigate whether Twitter’s reporting on real versus fake users is “false, misleading, or deceptive” under the Texas Deceptive Trade Practices Act. The CID requires Twitter to turn over documents related to how it calculates and manages its user data and how these numbers relate to Twitter’s advertising businesses. Twitter has until June 27 to respond to Attorney General Paxton’s Demand.
“Texans rely on Twitter’s public statements that nearly all its users are real people. It matters not only for regular Twitter users, but also Texas businesses and advertisers who use Twitter for their livelihoods,” stated Paxton. “If Twitter is misrepresenting how many accounts are fake to drive up their revenue, I have a duty to protect Texans.”