Status: 08/25/2022 10:57 a.m
The US Securities and Exchange Commission is again asking Twitter how the company determines the number of false user accounts. Because of this question, billionaire Elon Musk dropped the planned takeover.
According to the US Securities and Exchange Commission, Twitter should provide more information on how the social media service calculates the number of fake accounts on its platform. As early as June, the SEC wanted to know the company’s methodology for determining false profiles or spam accounts.
The special thing about it: Twitter’s handling of so-called bots is also a central point of criticism from Tesla boss Elon Musk. After the failed takeover deal, the billionaire is in a legal dispute with the group – because of allegedly “false and misleading” information from the short message service.
Routine or formal investigation?
So now the SEC wants to know from Twitter which assumptions and assessments on the part of company management are used to calculate fake profiles. Twitter has stated the number of its monthly active users as 238 million. About five percent of the accounts are therefore fake, spread spam or are bots, i.e. controlled by software. The SEC should be interested in both values, since Twitter uses this information to attract advertisers. Their payments to the company make up a large part of the group’s income.
The stock exchange supervisory authority had already asked its questions in a letter dated June 15. It initially remained unclear whether the stock exchange supervisory authority had already opened a formal investigation into the fake accounts. It could also be a routine query. California law firm Wilson Sonsini replied in a June 22 letter that the company believed it adequately presented its methodology in its 2021 annual report. Neither the SEC nor Twitter declined to comment yesterday.
Whistleblower allegations
Tesla boss Elon Musk justified his withdrawal from the Twitter deal with the fake profiles, among other things. He originally wanted to buy the US service for $44 billion. The richest man in the world accuses the short message service of showing too few false accounts and thus exaggerating the number of actual users.
Twitter described this justification as “hypocrisy” and wants to take legal action to force Musk to complete the contractually agreed purchase. At the end of July, the Tesla boss responded with a counterclaim. Shortly before, the responsible judge had set the start of the process on October 17th. In order to be prepared for a defeat in the legal dispute, Musk recently sold Tesla shares several times. He wants to prevent an emergency sale of the papers if Twitter calls for the takeover to be completed.
A whistleblower’s complaint to the SEC should therefore come in handy for Musk. As the US broadcaster CNN reported, the former security chief of Twitter, Peiter Zatko, raises serious allegations against the group. Employees should have access to the central systems of the service and to user data such as telephone numbers. In addition, accounts closed by users are said to have not been reliably deleted. Twitter rejects the allegations.