Twitter must give Elon Musk more data on fake users, judge rules

A Delaware judge has ordered Twitter to hand over more data to Elon Musk relating to how it calculates bot and fake accounts on its platform but stopped short of fully granting the billionaire’s “absurdly broad” requests for information on the entire user base.

Ahead of the October 17 trial date in litigation over whether Musk must go through with his $44bn takeover of the social media company, lawyers representing the billionaire entrepreneur have sought more data and documentation detailing Twitter’s calculation of how many users were legitimate and could be served advertising.

Musk’s efforts to back out of his agreement to buy Twitter have centred on his allegation that the company understated the number of fake accounts on its platform. The transaction was first agreed in April before tech stocks collapsed, leaving Twitter’s market value at just under $32bn.

Twitter attorney Bradley Wilson said in a hearing on Wednesday that the social network had been upfront in its disclosures that less than 5 per cent of accounts were fake or spam. He emphasised that the company exercised “significant judgment” in calculating monetisable daily active users, or mDAUs, and said its “candid” disclosures gave it legal protection against claims it misled investors.

Kathaleen McCormick, the judge overseeing the case, on Thursday ordered Twitter to produce information regarding 9,000 accounts it analysed for authenticity as part of an audit at the end of last year.

Twitter must also share some material relating to other internal discussions or analyses regarding crucial metrics about its user base beyond the mDAU metric, she ruled.

But the judge agreed with Twitter’s view that producing the entire range of data sought by Musk, who is chief executive of Tesla, on its more than 200mn mDAU was overly burdensome.

“[Musk’s] documents request would require plaintiff to produce trillions upon trillions of data points,” she wrote. “[Twitter] has difficulty quantifying the burden of responding to that request because no one in their right mind has ever tried to undertake such an effort.”

An attorney for Musk, Alex Spiro, said his team looked “forward to reviewing the data Twitter has been hiding for many months”.

Twitter declined to comment.

The data could aid Musk’s efforts to argue that the platform has been deceiving investors about the scale of the fake account problem on the social network. He has alleged Twitter’s creation of its mDAU metric was a cloak-and-dagger operation to impress Wall Street and provide cover for stagnating growth and a spiralling spam problem.

This week, Peiter Zatko, Twitter’s former security head, disclosed a separate whistleblower complaint making similar claims about active users to US regulators and members of Congress.

Zatko, who was fired from the company in January, is due to testify before the Senate judiciary committee on September 13. The appearance comes amid calls for investigations into his claims, which included allegations that Twitter’s cyber security was lax and had been infiltrated by foreign powers.

This month, Musk produced his own analysis of Twitter’s users in which he claimed at least 10 per cent were fake or bots, compared with the company’s estimate of “less than 5 per cent”. In a separate ruling on Thursday, the judge ordered Musk to make the methodology behind that claim available to the social media company.

The mDAU figure had also been under scrutiny by the US Securities and Exchange Commission, according to filings released on Wednesday. The markets regulator wrote to Twitter in June seeking more clarity on the mDAU metric, asking for an explanation as to how it had been incorrectly overinflated in 2019. Twitter issued a correction this year.

The dispute continues to roil Twitter’s daily operations. At an all-hands meeting on Wednesday, in which chief executive Parag Agrawal described Zatko’s allegations as “inaccurate”, executives revealed that staff attrition had risen to 18 per cent. The substance of the staff meeting was first reported by Reuters.