Elon Musk accuses Twitter of fraud for hiding real number of fake accounts

Twitter called his claims 'factually inaccurate, legally insufficient and commercially irrelevant.'

Dado Ruvic / reuters

Elon Musk is accusing Twitter of fraud for hiding the real number of bots on its platform, according to The New York Times. In the latest installment of the Twitter-vs-Musk saga, the Tesla chief's team claimed in a legal filing that 10 percent of the social network's daily active users who see ads are inauthentic accounts. If you'll recall, Twitter has long maintained that bots represent less than five percent of its userbase, and Musk put his planned acquisition of the social network on hold in mid-July to confirm if that's accurate.

The Tesla and SpaceX chief, who's also a prolific Twitter user, launched an aggressive takeover of the social network in April after it became the company's largest shareholder. While Twitter quickly accepted his offer, they butted heads over the number of fake accounts on the platform shortly after that — he also accused the company of not giving him access to enough information to verify the number of bots on the website. Twitter gave him full access to its internal data in response, but in the end, Musk told the Securities and Exchange Commission that he wanted to terminate the acquisition over "false and misleading representations" made by the social network.

Twitter sued its largest shareholder for trying to back out of its $44 billion buyout deal, telling the court that Musk is wrongfully breaking their agreement by doing so. The website accused him of backing out because Tesla's and Twitter's shares went down due to the economic downturn and the "deal he signed no longer serves his personal interests."

In this new filing, Musk's camp said its analysts found a much higher number of inauthentic accounts than Twitter claimed using Botometer. That's a machine learning algorithm designed by Indiana University that "checks the activity of Twitter accounts and gives them a score based on how likely they are to be bots." Musk's lawyers said the social network concealed its bot problem to get Musk to agree to buy the company "at an inflated price." They also said:

"Twitter was miscounting the number of false and spam accounts on its platform, as part of its scheme to mislead investors about the company’s prospects. Twitter’s disclosures have slowly unraveled, with Twitter frantically closing the gates on information in a desperate bid to prevent the Musk parties from uncovering its fraud."

Twitter fired back with its own legal filing, calling his claims "factually inaccurate, legally insufficient and commercially irrelevant." The company said the Botometer is unreliable and had once given Musk's own Twitter account a score indicating that it's "highly likely to be a bot." Twitter's lawsuit against Musk is heading to court in October.

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