Texas Attorney General Ken Paxton launched an investigation into whether Twitter is falsely reporting the number of bot accounts on the platform and considering the answer could have an impact on state pension funds and retirement accounts, it makes sense, however, TExas is not invested in Twitter. So why is Paxton getting involved?.
The review will determine whether Twitter broke the Texas Deceptive Trade Practices Act by misrepresenting the number of bot accounts, those that are automated and nonhuman, versus real users, the Republican official announced after Tesla CEO Elon Musk threatened to drop his deal to buy Twitter over similar concerns.
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“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,” Paxton said in a press release Monday. “If Twitter is misrepresenting how many accounts are fake to drive up their revenue, I have a duty to protect Texans.”
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Although Twitter reported that less than 5% of its users are bots in regulatory filings, the number could be as many as 20% or more, Paxton claimed.
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As part of the study, Paxton issued a civil investigative demand to compel Twitter to turn over documents related to how the company calculates and manages its user data and how the data relate to its advertising business.
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The announcement comes after Musk told in a Securities and Exchange Commission filing Monday that if the social media platform does not hand over information on the number of spam bots, it will put his $44 billion bid to acquire the company in trouble.
Musk has become increasingly connected to Texas after Tesla moved its headquarters to Austin from California late last year. SpaceX also has facilities in Texas.
Twitter was given a June 27 deadline to respond to Paxton’s civil investigative demand.
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As for sale, a spokesperson said, “We intend to close the transaction and enforce the merger agreement at the agreed price and terms,” adding that the company “will continue to cooperatively share information with Mr. Musk to consummate the transaction.”
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Tesla CEO Elon Musk made his biggest direct threat yet to pull out of a deal to buy Twitter on Monday. In a new securities filing, an attorney for Musk claimed that he has a right to drop the deal since he’s not content with Twitter’s responses to his requests for information about how many spam and fake accounts are on the platform.
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But as many tech experts pointed out, that’s not really what’s driving Musk’s threat.
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What seems to be happening is that, as the deal has become less appealing and more financially onerous, Musk has grown increasingly desperate for an offramp to end the deal and save face potentially. And it’s not clear that this gambit will work.