Twitter fined in privacy settlement as Musk pledges more fairness for deal

Twitter was fined $150 million by the Federal Trade Commission and the Department of Justice on Wednesday, as part of a settlement for misleading users about how it handles their personal data.

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 used to help marketers target ads, a report said. said the agencies. The deceptive behavior lasted for at least six years, from 2013 to 2019, the agencies said.

Under the settlement, which must be approved by a federal court, Twitter has not admitted any wrongdoing.

“The $150 million penalty 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. “, said Vanita Gupta, associate attorney general. , said in a statement.

In recent years, regulators have scrutinized companies for their privacy practices. In 2019, the FTC fined Facebook $5 billion as part of a settlement for violations related to Cambridge Analytica, a voter profiling firm. This year, the agency teamed up with the company formerly known as Weight Watchers to produce an app that collects data from young people. The FTC also said it is considering drafting new rules governing how companies collect and use data online.

Twitter has previously grappled with the FTC over privacy. In March 2011, the company settled accusations that it failed to protect users’ personal information after two breaches in 2009, in which hackers took administrative control of Twitter. Under this settlement, the company agreed not to mislead consumers about how it protects 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 provided for security purposes, Twitter violated those terms, the FTC and the Justice Department said.

“Keeping data safe and respecting privacy is something we take extremely seriously, and we have cooperated 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 advertising, 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 take the company private. But in recent weeks, Mr Musk has cast doubt on the deal as Twitter rushed to finalize it.

On Wednesday, Mr. Musk revealed in a filing that he had boosted his personal financial commitment in the Twitter deal and now plans to contribute $33.5 billion – either from his own funds or in partnership with other Twitter shareholders – at the acquisition price.

The initial funding plan included $21 billion in Mr. Musk’s equity, plus a $12.5 billion bank loan that was to be secured by Mr. Musk’s shares in Tesla, the electric car maker that he’s leading. The amount of the loan had already been halved earlier this month as Tesla shares fell amid a broader market rout and Mr Musk secured equity commitments from other investors.

In Wednesday’s filing, Musk said the entire loan had been “terminated” and that he would rely more heavily on additional equity. Twitter shares rose 6% in after-hours trading as investors interpreted the move as a sign that Mr Musk was not about to walk away from the deal.

In the filing, Mr. Musk also said he was in discussions with other Twitter shareholders, including Jack Dorsey, a founder of the company, about transferring their existing shares in the merged company once the deal is done. concluded, rather than being paid for their participation. . 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.

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