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Texas Attorney General Ken Paxton said Monday he is investigating Twitter over its reporting of how many accounts on the platform are from bots and fake users, saying the company may be misrepresenting the number to inflate its value and raise its revenue.
Twitter has claimed in its financial regulatory filings that less than 5% of its daily active users are spam accounts. But Paxton on Monday alleged that spam accounts could make up as much as 20% of users or more.
“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,” Paxton said.
False reporting of fake users could be considered “false, misleading, or deceptive” under the Texas Deceptive Trade Practices Act, he said. Paxton sent Twitter a civil investigative demand, requiring the social media company to turn over documents related to how it calculates and manages its user data.
Twitter could not be immediately reached for comment on the investigation.
The investigation comes as Tesla CEO Elon Musk is also raising questions about the number of fake accounts on Twitter. Musk, who is in negotiations to buy the social media company, threatened to walk away from the deal saying that Twitter has not provided data he has requested on spam accounts.
“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” an attorney representing Musk wrote in a letter to the Twitter’s head of legal, policy and trust.
Musk has previously said the acquisition “cannot move forward” until the company provides proof of its spam metrics.
The state’s top lawyer has gone after social media companies before. He sued Meta, the parent conglomerate of Instagram and Facebook, saying some of the company’s practices around biometrics violated Texans’ privacy. Meta, in response, temporarily disabled face filters.
Paxton sent Twitter a civil investigative demand in 2021 after it banned former President Donald Trump from its platform following the Jan. 6 attack at the U.S. Capitol. Twitter at the time filed a lawsuit against Paxton, asking the judge to halt the investigation.
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