Twitter Inc. announced paying $150.00 million in fines due to the allegations that the company misused private information to target advertising. The settlement covers claims that the microblogging firm misrepresented the security and privacy of user data.
Specifically, the company represented to users that it collected their telephone numbers and email addresses to secure their accounts. However, it failed to disclose that it also used user contact information to aid advertisers in outreaching their preferred audiences.
According to the court documents, this violation happened between May 2013 and September 2019, which is against the Federal Trade Commission Act.
In addition to the monetary settlement, the agreement requires the social media company to improve its compliance practices.
The United States officials cited that Twitter earned about $3.00 billion in advertising in 2019. Thus, it is a massive part of the total profit of $3.40 billion.
In 2021, the platform made $5.00 billion in revenue. Earlier this month, the firm said in a filing that it had allocated $150.00 million after agreeing in principle upon a penalty with the FTC. The latest Twitter settlement follows years of fallout over tech companies’ privacy practices.
In 2018, Facebook, the world’s most extensive social network, experienced the same issue. The firm used phone numbers provided by the two-factor authentication to serve ads, enraging privacy advocates.
Eventually, Meta settled the issue as part of a $5.00 billion agreement in the same year.
Musk Increases Commitment in a Twitter Takeover Bid
Meanwhile, on Wednesday, Elon Musk plans to front $33.50 billion in his bid to take over Twitter. The move is a positive sign that the billionaire has increased his commitment to the takeover.
After the announcement, shares of the microblogging firm soared 5.49% or 2.04 points to $39.20 per share. However, the firm has skidded 12.89% or 5.50 points since the start of the year.
Initially, the Twitter deal was controversial as investors had low confidence that the bid would go through at that price.