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The legal battle between Elon Musk and Twitter just took an unexpected turn after the social media’s former security chief said the company lied to Musk about the number of bots and spam accounts on the platform. The informer further accused senior members of fraud and “extensive violations” of the law affecting users, investors, and even company workers.
The revelations come from Peiter “Mudge” Zatko, who held the position of Security Lead, an important senior executive team member responsible for information security, privacy, physical security, information technology and Twitter Service —the corporate division responsible for global content moderation enforcement.
From the position he held at Twitter from November 2020 to January 2022, Zatko said he discovered “extreme, egregious deficiencies” in user privacy, digital and physical security, and platform integrity in terms of content moderation that amount to “extensive legal violations” by the social network.
The evidence presented by Zatko suggests that both Twitter CEO Parag Agrawal and certain senior executives and board members engaged in “extensive, repeated and uninterrupted violations” of the Federal Trade Commission (FTC) Act by making false and misleading statements to users and federal authorities about security, personal account and platform privacy, and information integrity.
Zatko charges Agrawal and senior Twitter executives with egregious violations of Securities and Exchange Commission (SEC) audit requirements, “fraudulent and material misrepresentations” in communications with the Board of Directors and investors, and “negligence and even complicity” over foreign government efforts to infiltrate, control, exploit, surveil and/or censor the company’s platform, personnel, and operations.
Elon Musk was right: Twitter lies about fake accounts
One of Zatko’s revelations that could have the greatest impact on the company’s future has to do with the number of fake accounts, popularly referred to as spam accounts or bots, which has been a central point of contention in the legal battle between Elon Musk and Twitter.
— Elon Musk (@elonmusk) August 23, 2022
Zatko’s allegations claim that Twitter uses an “opaque metric” to count what they call monetizable daily active users (mDAU), which was created to replace a previous metric of total monthly users that constantly changed when spam and bot accounts were removed.
The mDAU metric, according to the disclosures, would be an “improvement” for Twitter since its formula can be redefined internally at the company’s convenience, allowing it to report numbers that would reassure shareholders and advertisers. This implies an incentive for Twitter executives to avoid counting bots and thus make the platform more attractive to investors and advertisers.
Zatko claimed that “many millions” of fake accounts are not counted in the mDAU formula because, although their presence on the platform affects the user experience, Twitter would not be able to monetize them. The whistleblower also claimed that the actual data on spam accounts is kept secret because publishing it would damage the social network’s image and valuation.
When Zatko asked the company’s integrity managers what the actual number of bots and spam on the platform is, the answer was: “we don’t really know,” and the real reason is that they don’t care to know.
However, according to his estimates, the true number of fake Twitter accounts is “significantly higher” than the 5% of mDAUs the company claims in its SEC filings.
Despite the evidence presented by Zatko, a Twitter spokesperson told The Washington Post that the company stands by the data previously presented by its executives.
But Zatko insists that Agrawal tweeted “false and misleading” information when responding to Musk about the actual count of fake accounts.
“Agrawal’s tweet was a lie,” read Zatko’s claims. “In fact, Agrawal knows very well that Twitter executives are not incentivized to accurately “detect” or report total spam bots on the platform.”
Zatko’s claims make sense of Twitter’s legal effort to force Musk to close the $44 billion buyout deal, which was called off by the SpaceX leader, who alleges that the social network misled his legal team about the true number of bots and, consequently, about the advertising base.
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022
Musk, who seems to have been clear from the beginning, countersued Twitter and accused the company of fraud and breach of contract. If the judge determines that the social network did indeed lie, the company must pay Musk the $1 billion termination fee provided for in a clause of the initial contract.
The legal case between Twitter and Musk, following Zatko’s statements, could uncover the Tesla owner’s true intentions in making his juicy initial offer and expose a massive scheme of censorship, fraud, and manipulation of information by the social media giant.
Tomás Lugo, journalist and writer. Born in Venezuela and graduated in Social Communication. Has written for international media outlets. Currently living in Colombia // Tomás Lugo, periodista y articulista. Nacido en Venezuela y graduado en Comunicación Social. Ha escrito para medios internacionales. Actualmente reside en Colombia.