Musk’s accusations about bots lead Twitter to a tax investigation: the purchase is still up in the air

The soap opera between Elon Musk and Twitter on account of the purchase of the social network has a new chapter. This Monday, Texas Attorney General Ken Paton has opened an investigation about the operation arguing that the company led by Parag Agrawal could have shared false information about the bot accounts in the development of the sales conversations, which would violate the Deceptive Trade Practices Law of the State of Texas.

For this reason, the prosecutor has ordered Twitter to write accurate reports on how it has calculated and managed data about its users on a monthly basis from 2017 to the present, and how it relates that information to its advertising business. The social network has until June 27 to respond to those demands.

Musk turns to his lawyers. Parallel to the start of this investigation, Elon Musk has sent a letter to Twitter through his lawyers in which he points out that the social network is rejecting the requests for data that it is asking about the number of false accounts on the platform, which is equivalent to a “clear material breach” of the agreement and would enable the founder of Tesla to break unilaterally the operation.

It is not the first time that Elon Musk has threatened to withdraw from the sale, he already did it two weeks ago through, precisely, from your Twitter profilebut it is the first time he has done so through official channels, since the letter was written by his lawyers and sent both to the social network and to the United States Securities and Exchange Commission.

“As the potential owner of Twitter, Mr. Musk clearly has a right to the requested data so that he can prepare for the transition of the Twitter business to his ownership and to facilitate the financing of such a transaction. To do both, he must have a complete and accurate understanding of the very core of Twitter’s business model: its active user base. […]. At this point, Musk believes that Twitter is refusing to transparently meet its obligations under the agreement, raising further suspicion that the company is withholding the requested data out of concern about what its own analysis of that data will uncover. data,” the letter states.

The problem. The main point of disagreement between Musk and those responsible for Twitter at the moment has to do with the percentage of false accounts that currently exist on the social network. According to the still leaders of the platform, are less than 5%a figure that the South African tycoon has been questioning since May 13.

According to Musk explained through his Twitter account, those responsible for the social network refuse to show evidence that false accounts are actually less than 5% of the total number of platform users, and assures that they believe that the real percentage is around 20%. Given these suspicions, the magnate affirms that his offer of 44,000 million dollars would have been based on inaccurate data, which is why he would be rethinking the purchase.

In response to Musk’s accusations, Twitter CEO Parag Agrawal explained andin a long thread the work of its employees to combat fake accounts and assured that every day they block approximately half a million of them.

Reality or strategy? The truth is that Twitter has not given details about how it internally calculates the number of false accounts that exist on the platform. But Musk has also not said where he got the percentage of 20% with which he has justified the temporary freezing of the operation.

At this time, therefore, it is Agrawal’s word against that of the South African tycoon, although if the latter has decided to take the claim to his lawyers, he must have a solid basis on which to support his accusations. However, with the CEO of Tesla and SpaceX, you never know.

Thus, it is not clear if Musk actually sees his investment in danger, and that is why he is rethinking the purchase, if he is taking advantage of the doubts about the real percentage of false accounts to generate more noise and try to lower the bulky price of the operation, or if the deterioration of the world economy (which has led him to address layoffs at Tesla) has made you decide to be more conservative with your investments. What is certain is that the soap opera will go on for a long time.

Image | Ministry of Communications

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Musk’s accusations about bots lead Twitter to a tax investigation: the purchase is still up in the air