Twitter Fined in Privacy Settlement, as Musk Commits More Equity for Deal

Twitter was fined $ 150 million by the Federal Trade Commission and the Department of Justice on Wednesday as part of a settlement to mislead users about how they deal with their personal data.

Twitter told users it was collecting their email addresses and phone numbers to protect their accounts, but did not suffice to say that the information was also used to help marketers target ads, the agencies said. The deceptive behavior lasted 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 wrongdoing.

“The $ 150 million fine reflects the seriousness of privacy against Twitter, and the significant new compliance measures to be imposed as a result of today’s proposed compromise will help prevent further deceptive tactics endangering users’ privacy,” Vanita Gupta, associate attorney general, said in a statement.

Regulators have been scrutinizing companies for their privacy practices in recent years. In 2019, the FTC slapped a 5 billion fine on Facebook in a settlement of violations involving voter-profiling firm Cambridge Analytica. This year, the agency struck a deal with a company once known as Weight Watchers to create an app that collects data from young people. The FTC also said it was considering writing new rules on how companies collect and use data online.

Twitter has previously clashed with the FTC over privacy. In March 2011, the company settled allegations of failing to protect users’ personal information after two breaches in 2009, during which hackers seized administrative control over Twitter. Under that settlement, the company has not agreed to mislead customers about how to protect their privacy for the next 20 years. Twitter also said it would conduct regular security audits.

By using personal information for advertising purposes provided by users for security purposes, Twitter violated those terms, the FTC and the Justice Department said.

“Protecting data and respecting privacy is something we take very seriously and we have cooperated with the FTC in every step,” said Damien Kieran, Twitter’s chief privacy officer. Statement, Twitter declared the problem in 2019 and stopped using security information for advertising, Mr. Kira added.

The compromise comes at a time when the social media company is battling a tumultuous takeover of Elon Musk, the world’s richest man. Last month, Twitter acknowledged Mr. Musk’s $ 44 billion bid to privatize the company. But in recent weeks, Mr. Musk has expressed skepticism over the deal, while Twitter has pushed for it to be finalized.

On Wednesday Mr. Musk revealed in the filing that it had stepped up its personal financial commitment to the Twitter deal, and was now planning to contribute $ 33.5 billion – either from its own funds or in partnership with other Twitter shareholders – towards the acquisition price.

The initial lending plan includes $ 21 billion in equity from Mr. Musk, in addition to the $ 12.5 billion bank loan that was to be secured by Mr. Musk’s stock in Tesla, the electric car maker he operates. The loan amount was halved earlier this month as shares of Tesla fell amid a broader market path and Mr. Musk secured equity commitments from other investors.

In Wednesday’s filing, Mr. Musk said the entire loan has been “terminated” and will rely more on additional equity. Shares of Twitter rose as much as 6 percent in after-hours trading, as investors interpreted the move as an indication that Mr. Musk was not going to get away with the deal.

In the filing, Mr. Musk also said he was discussing with other Twitter shareholders, including company founder Jack Dorsey, about rolling out their existing shares in the merged company after the deal closed, rather than paying for their share. If Mr. Dorsey or some other shareholders do so, which can reduce the amount of money that Mr. Musk has personally promised – and a financial risk – for him.

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