Texas Attorney General Ken Paxton has launched an investigation against micro-blogging site Twitter for potentially false reporting over its fake bot accounts in violation of the Texas Deceptive Trade Practices Act.
Twitter has received intense scrutiny in recent weeks over claiming in its financial regulatory filings that fewer than 5 per cent of all users are bots, when they may in fact comprise as much as 20 per cent or more.
The difference could dramatically affect the cost to Texas consumers and businesses who transact with Twitter.
To address this concern, 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 the site's advertising businesses.
Twitter has until June 27 to respond to the Attorney General demand.
"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 in a statement.
If Twitter is misrepresenting how many accounts are fake to drive up their revenue, I have a duty to protect Texans."
On Twitter, "bots" are automated, non-human accounts that can do virtually the same things like 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.
This week, tech billionaire Elon Musk stated that if Twitter fails to give data on spam and fake accounts, he may walk out of his $44 billion acquisition agreement.
In a fresh SEC filing, Twitter shared a letter it received from Musk's legal team indicating displeasure with the company's offered information regarding the level of "spam and fake accounts" on its service.
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