On Monday, Texas Attorney General Ken Paxton announced that his department has opened an inquiry into Twitter “for potentially false reporting on its fake bot accounts,” coming as Elon Musk fights with the firm over the same issue.
Texas State Attorney General Ken Paxton announced that the inquiry is focused on determining whether Twitter has broken the Texas Deceptive Trade Practices Act.
“Texans trust Twitter’s public statements that nearly all of its users are genuine people. It matters not just for casual Twitter users, but also for Texas businesses and advertisers who rely on the platform for their livelihoods,” Paxton added. “I have a duty to protect Texans if Twitter is intentionally misrepresenting how many of their accounts are fake in order to boost revenue.”
Paxton’s office said in a statement:
In recent weeks, there has been a lot of debate over whether or not Twitter’s financial regulatory filings indicate that less than 5 percent of all users are bots, when the company may in fact include as much as 20 percent or more fake accounts. The cost to Texas businesses and consumers who interact with Twitter might be substantially impacted by this distinction.
To address this issue, attorney general Ken Paxton issued a Civil Investigative Demand, which is a formal request to discover if Twitter’s reporting on fake versus real users is “false, deceptive, or misleading” under the Texas Deceptive Trade Practices Act. “Twitter must hand over documents that explain how it manages and calculates user data, as well as how these numbers are connected to Twitter’s advertising businesses. Attorney General Paxton has given Twitter a deadline of June 27 to answer his Demand.”
The news comes after Musk, who acquired the firm last month for $44 billion pending certain paperwork, denounced the business for allegedly breaking a sales agreement by failing to provide him data on bot accounts.
According to the letter, an attorney for Musk claimed that Twitter was “actively resisting and obstructing his information rights” as agreed in the contract.
“This is a clear breach of Twitter’s terms of the merger contract, and Mr. Musk hereby reserves all rights that may arise as a result of this action, including his right to not finalize the transaction and his right to cancel the merger agreement,” according to the letter.