The inquiry will review whether Twitter violated the Texas Deceptive Trade Practices Act by misreporting the number of bot accounts, those that are automated and nonhuman, versus real users, the Republican official announced after Tesla CEO Elon Musk threatened to pull out of his deal to buy Twitter over similar concerns.
“Texans rely on Twitter’s public statements that nearly all its users are real people. It matters not only for regular Twitter users, but also Texas businesses and advertisers who use Twitter for their livelihoods,” Paxton said in a press release Monday. “If Twitter is misrepresenting how many accounts are fake to drive up their revenue, I have a duty to protect Texans.”
Although Twitter reported that fewer than 5% of its users are bots in regulatory filings, the number could be as many as 20% or more, Paxton claimed.
As part of the investigation, Paxton issued a civil investigative demand to compel Twitter to turn over documents related to how the company calculates and manages its user data and how the data relate to its advertising business.
The announcement comes after Musk suggested in a Securities and Exchange Commission filing Monday that if the social media platform does not hand over information on the number of spam bots, it would put his $44 billion bid to purchase the company in jeopardy.
Musk has become increasingly attached to Texas after Tesla moved its headquarters to Austin from California late last year. SpaceX also has facilities in Texas.
Twitter was given a June 27 deadline to respond to Paxton’s civil investigative demand.
The Washington Examiner reached out to Twitter for comment on Paxton’s investigation. As for the sale, a spokesperson said, “We intend to close the transaction and enforce the merger agreement at the agreed price and terms,” adding that the company “will continue to cooperatively share information with Mr. Musk to consummate the transaction.”