Washington (AP) – According to US government allegations, Twitter used users’ contact details for advertising – which now costs the website $ 150 million. Twitter agreed to a fine of this amount in order to settle a data protection lawsuit by the US authorities.
In a lawsuit released on Wednesday, the FTC and the Justice Department said Twitter asked users for their phone numbers and email addresses as it would help keep their accounts secure. Online services access emails or messages to mobile numbers, for example to register on new devices, forgot passwords or to re-unblock locked profiles. Twitter also used this data to display personalized advertisements to users. Contact information collected for other purposes was thus misused.
violation and punishment
As reported by the US government, from May 2013 to September 2019, more than 140 million users shared their phone numbers or email addresses on Twitter. She saw the website’s approach as a breach of the 2011 contract, in which Twitter undertook, inter alia, to to transparency in data protection. The service was therefore recognized by the government as a recidivist, which opened the door to a large payment.
At $ 150 million (€ 140 million), however, Twitter fares significantly cheaper than Facebook in 2019. At the time, US authorities also accused the world’s largest internet network of breaching previous data protection obligations. Facebook paid five billion dollars and agreed to stricter data protection governance. Among other things, Twitter must now be subject to data protection scrutiny by FTC-appointed experts and report incidents to the authority within 30 days. In addition, Twitter is said to offer a secure registration method that works without a phone number.
Attempt to take over Musk
A fine and new conditions emerge during an attempt to take over on Twitter by tech billionaire Elon Musk. The deal is not going well anymore: Musk recently announced a suspension of the acquisition deal. He justified this by the suspicion that the percentage of spam and bot accounts was higher than the estimates in official reports, less than five percent. However, from Twitter’s point of view, Musk cannot unilaterally suspend the contract – and the website is insisting on a contract.
On Wednesday, investors had a bit more hope that the transaction would eventually be successful. Musk shifted his funds. After all, it doesn’t want to take out equity-backed loans. He originally wanted to raise $ 12.5 billion (EUR 11.7 billion) in this way. However, a statement by the US Securities and Exchange Commission said Musk wanted to deposit the amount in a different way. The head of electric car maker Tesla has presented financial commitments of more than $ 46 billion for the deal with Twitter.
The abandonment of equity-backed loans was already expected following a significant drop in the price of Tesla’s paper. Following the switch, Musk now wants to contribute $ 33.5 billion in addition to other loans. To raise this amount, he has already invited various investors on board.
According to the statement, Musk also wants to talk to longtime Twitter boss Jack Dorsey about finalizing his stake in the deal in order to continue to engage with Twitter after the acquisition is completed. According to the latest information, Dorsey owns about 2.5 percent. Twitter, Musk has bought a good 9 percent in recent months.
Industry analyst Dan Ives said the change was good news. Musk is still working on the funding, and the change is a “good move” that will take the burden off Twitter after the acquisition, an expert at finance firm Wedbush wrote.
Twitter’s share temporarily rose by about six percent in after-hours trade after the announcement was posted. At a good $ 39, the price was still well below the $ 54.20 per share that Musk had promised shareholders.