Twitter was fined $150 million on Wednesday by the Federal Trade Commission and the Department of Justice as part of a plea deal for misleading users about how it handled their personal information.
Twitter had told users it was collecting their email addresses and phone numbers to protect their accounts, but didn’t do enough to say the information was also being used to help marketers target ads, the agencies said. The deceptive behavior lasted at least six years, from 2013 to 2019, the agencies said.
Under the settlement, which must be approved by a federal court, Twitter did not admit wrongdoing.
“The $150 million fine reflects the seriousness of the allegations against Twitter, and the substantial new compliance measures that will be imposed as a result of today’s proposed settlement will help prevent further deceptive tactics that threaten users’ privacy,” Vanita Gupta, the associate attorney general, said in a statement.
Regulators have been monitoring companies for their privacy practices in recent years. In 2019, the FTC fined Facebook $5 billion in a settlement for violations related to Cambridge Analytica, a voter profiling company. This year, the agency reached a settlement with the company once known as Weight Watchers to produce an app that collected data from young people. The FTC has also said it is considering writing new rules for how companies collect and use data online.
Twitter has previously wrestled with the FTC over privacy. In March 2011, the company settled allegations that it failed to protect users’ personal information after two 2009 breaches in which hackers took administrative control of Twitter. Under that settlement, the company agreed not to mislead consumers about how it protected their privacy for the next 20 years. Twitter also said it would conduct regular security audits.
By using personal information for ad targeting that users had provided for security purposes, Twitter violated those terms, the FTC and the Department of Justice said.
“Keeping data safe and respecting privacy is something we take very seriously, and we’ve worked with the FTC every step of the way,” Damien Kieran, Twitter’s chief privacy officer, said in a statement. statement† Twitter disclosed the issue in 2019 and stopped using security information for ads, Mr Kieran added.
The settlement comes as the social media company grapples with a tumultuous takeover of Elon Musk, the world’s richest person. Last month, Twitter accepted Mr Musk’s $44 billion offer to sell the company. But in recent weeks, Mr. Musk has questioned the deal as Twitter pushes ahead to finalize it.
On Wednesday, Mr. Musk announced in a filing that he had increased his personal financial commitment to the Twitter deal and now plans to contribute $33.5 billion — either from his own funds or in partnership with other Twitter shareholders. – towards the acquisition price.
Musk’s original financing plan included $21 billion in equity capital, plus a $12.5 billion bank loan to be backed by Mr. Musk’s stock in Tesla, the electric car maker he runs. The loan amount had already been cut in half earlier this month as Tesla shares fell amid a broader market crisis and Mr. Musk secured equity pledges from other investors.
In Wednesday’s filing, Mr. Musk said the entire loan had “terminated” and he would rely more heavily on additional equity. Shares of Twitter rose a whopping 6 percent in after-hours trading as investors interpreted the move as a sign that Mr. Musk had no intention of walking away from the deal.
In the filing, Mr. Musk also said he was in talks with other Twitter shareholders, including Jack Dorsey, a company founder, about rolling their existing shares into the merged company once the deal was closed, rather than being paid. receive for their efforts. If Mr. Dorsey or certain other shareholders do so, it could reduce the amount of money Mr. Musk has personally pledged — and the financial risk to him.
