Twitter is agreeing to pay the Federal Trade Commission a measly $150 million in penalties for illegally handing off user data to sell targeted ads, according to court documents filed Wednesday.
The FTC filed its suit alongside the Department of Justice saying the company violated a 2011 FTC agreement to not share private data with advertisers. Twitter instead gave marketers user info provided for two-factor security purposes from 2013 to 2019. Under this new deal, regulators and an independent monitoring agency will get to review Twitter’s advertising practices over the next two decades.
The original FTC complaint charged the company with violating the FTC’s deceptive practices statute when it told users only they could control who had access to their tweets and private messages in a protected account, when of course Twitter employees had access to tweets and Twitter failed to limit outside access to private data.
In a statement on Twitter’s blog, Chief Privacy Officer Damien Kieran said that in 2019, the company “discovered” that user’s security email addresses and phone numbers was “inadvertently” being used for targeted advertising through its Tailored Audiences system. Twitter said they made a “whoopsie” when it matched people’s emails to advertisers’ marketing lists. At the time, they did not have exact numbers of how many users were affected, but prosecutors said more than 140 million users provided this info to Twitter.
“Twitter’s commitment to security and privacy is not a point-in-time exercise for us but a core value we constantly enhance by updating our practices to meet the evolving needs of our customers,” Kieran said.
The fine represents a pittance for a company that reported $1.2 billion in revenue for the first three months of the year, even if that number was lower than analysts predicted. This is especially small compared to a $5 billion settlement Facebook paid the FTC in 2019 for sharing security info with marketers—though even that is small change for such a massive company. Shareholders later claimed that Facebook paid so much in order for CEO Mark Zuckerberg to avoid being personally sued.
This blow against Twitter may be a concern during such a tenuous time for the company, but some experts have called on Congress to make it easier for the FTC’s to enforce regulations, especially regarding how companies moderate misinformation. At the same time, NPR cited Consumer Reports’ director of tech policy Justin Brookman who said that these regulations along with a multitude of lawsuits might force tech companies to look for other ways to make money than targeted ads.
Tesla CEO and prospective Twitter buyer Elon Musk seems to think this is indicative of more “lies” on the part of Twitter executives. He tweeted “If Twitter was not truthful here, what else is not true? This is very concerning news.”
More to the point, Twitter publicly apologized for giving out this user info back in 2019. Even as Musk has said he wants the platform to depend less on ads, it’s hard to say Twitter has held info on this situation back from the SpaceX CEO.
The world’s biggest billionaire has been railing against the company he wants to buy until it can “prove” its bot situation isn’t a big deal. Analysts have speculated that Musk is trying to back out of the deal now since his Tesla shares have declined since the start of this year, which he needs as collateral to make the deal go through. And as Musk’s few allies on Twitter board leave, the $44 billion deal seems more strained than ever.