Texas AG Ken Paxton Lays Down the Law, Orders Twitter to Provide Spam Data to Elon Musk Amid Acquisition Battle

The Republican Attorney General of Texas, Ken Paxton announced today that he is investigating Twitter, “for potentially misleading Texans on the number of its “bot” users. I have a duty to protect Texans if Twitter is misrepresenting how many accounts are fake to drive up their revenue.”

Twitter has been served with a Civil Investigation Demand from the Attorney General Division of Consumer Protection. On pages eight and nine of the document, 23 items are requested from Twitter. The data requested are documents regarding the daily average users on Twitter between 2017 and now. This data will be used to analyze if Twitter’s claims on the about of real users are valid or not.

A Press release from the Ken Paxton’s office is below:

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,” said Attorney General Paxton. “If Twitter is misrepresenting how many accounts are fake to drive up their revenue, I have a duty to protect Texans.” 

This comes just one day after Elon Musk’s lawyers issued a letter to Twitter accusing the company of “resisting and thwarting his information rights.”

“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.”

Twitter released a public statement in regards to the letter as well Monday, “Twitter has and will continue to cooperatively share information with Musk to consummate the transaction in accordance with the terms of the merger agreement.”

In May Musk shared on Twitter, “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5 percent of users”. He followed that up by stating, “Still committed to acquisition”.

Many see the move by Musk as an attempt at getting a better price for the company. Others are claiming he just wants out of the whole deal. Twitter seems set on holding Musk to the original agreement, but has yet to address the issue at the forefront, the number of accounts operated by real individuals versus those that are spambots.

This acquisition has been a rollercoaster so far but seems to be moving forward for now. If the deal happens to fall through, which we hope it doesn’t, hopefully, the scrutiny Twitter has faced recently will bring forth some changes, however, we won’t hold our breath.