Austin Twitter has used contact details of users for advertising, according to allegations by the US government – this now costs the online service $ 150 million. Twitter agreed to pay a fine of this amount to settle a data protection lawsuit brought by American authorities.
In the statement of claim published on Wednesday, the FTC and the Justice Department point out that Twitter asked users for their phone numbers and e-mail addresses on the grounds that it could better secure their accounts. Online services access e-mails or messages to mobile phone numbers, for example to log in on new devices, to forgotten passwords or to unlock blocked profiles again. But Twitter also used the data to show users personalized ads, the lawsuit said. This means that the contact information collected for other purposes has been misused.
Between May 2013 and September 2019, more than 140 million users shared their phone numbers or email addresses with Twitter, the US government stressed. She saw in the approach of the service a violation of an agreement from 2011, in which Twitter had committed itself, among other things, to transparency in data protection. The service was therefore considered by the government as a repeat offender, which opened the door for a high payment.
However, at $ 150 million (140 million euros), Twitter is significantly cheaper than Facebook in 2019. At the time, US authorities also accused the world’s largest online network of violating previous data protection obligations. Facebook paid five billion dollars and agreed to stricter data protection supervision. Among other things, Twitter now also has to have the data protection checked by experts appointed by the FTC and report incidents to the authority within 30 days. In addition, Twitter should offer a secure login procedure that works without a phone number.
The fine and the new conditions come in the middle of tech billionaire Elon Musk’s takeover attempt on Twitter. The deal is already not going well: Musk had recently declared the takeover agreement suspended. He justified this with the suspicion that the percentage of spam and bot accounts was higher than the estimates of less than five percent mentioned in official reports. However, from the point of view of Twitter, Musk cannot unilaterally put the business on hold – and the service insists on closing.
Musk is shifting funding
On Wednesday, investors gained a little more hope that the deal will eventually go through. Musk reallocated his funding. He now does not want to take out loans secured with his shares. Originally, he wanted to get 12.5 billion dollars (11.7 billion euros) in this way. However, in a statement to the US Securities and Exchange Commission (SEC), Musk said that he wanted to contribute this amount in another way. The head of the electric car manufacturer Tesla had presented funding commitments of 46 billion dollars for the Twitter deal.
The waiver of the loans secured with shares had already been expected after the price of Tesla securities had fallen significantly. After the restructuring, Musk now wants to contribute $ 33.5 billion, in addition to other loans. In order to raise this amount, he has already brought various investors on board.
According to the announcement, Musk also wants to talk to longtime Twitter CEO Jack Dorsey about bringing his shares into a deal in order to continue to be involved in Twitter after the acquisition is completed. Dorsey holds about 2.5 percent of Twitter, according to recent data, Musk bought a stake of a good nine percent in recent months.
Industry analyst Dan Ives saw the reshuffle as good news. Musk is still working on the financing and the change is a “good step” that will relieve Twitter after the acquisition, wrote the expert of the financial firm Wedbush.
Twitter shares temporarily rose by around six percent in after-hours trading after the release of the announcement. At just over $ 39, the price was still well below the $ 54.20 per share that Musk had promised shareholders.