Texas Attorney General Ken Paxton announced on Monday that his office has opened an investigation into Twitter “for potentially false reporting over its fake bot accounts” which comes as Elon Musk battles with the company over the same issue.
Paxton said in a press release that the investigation centers on discovering if Twitter has violated the Texas Deceptive Trade Practices Act.
“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. “If Twitter is misrepresenting how many accounts are fake to drive up their revenue, I have a duty to protect Texans.”
In a statement, Paxton’s office said:
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.
The news comes after Musk, who bought the company last month for $44 billion pending details that needed to be finalized, accused the company of breaking the sale contract by not providing him data on bot accounts.
An attorney for Musk said in a letter to Twitter’s head of legal, policy and trust, Vijaya Gadde, that the social media company was “actively resisting and thwarting his information rights” as agreed to in the contract.
“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,” the letter said.