Whistleblower Says Twitter Lied to Musk About Spam Bots, With Possible Implications for Trial

Tom Ozimek
By Tom Ozimek
August 23Businessshare

A whistleblower who served as Twitter’s security chief said in regulatory filings obtained by The Epoch Times that the social media company misled tech entrepreneur Elon Musk about the number of bots on the platform, with possible implications for the legal battle between the Tesla chief and Twitter.

Peiter Zatko, who has publicly come forward as the whistleblower, made a series of explosive allegations regarding Twitter’s cybersecurity policies in a disclosure filed in July with federal regulators (pdf), including the claim of Twitter “lying about bots to Elon Musk.”

Zatko’s disclosure alleges that Twitter uses an “opaque metric” called monetizable daily active users (mDAU), rather than an earlier metric of total monthly users that was subject to big swings, including when spam and bot accounts were removed.

“From Twitter’s perspective, ‘mDAU’ was an improvement because it could internally define the mDAU formula, and thereby report numbers that would reassure shareholders and advertisers,” the disclosure states, adding that executive bonuses—which could be in excess of $10 million—are tied to mDAU growth.

The disclosure alleges that Twitter executives are “incentivized to avoid counting spam bots as mDAU” in order for the platform to be more appealing to advertisers. It also claims there are “many millions” of active accounts that aren’t part of the mDAU calculations because they’re spam bots or Twitter doesn’t think they can monetize them, but their presence on the platform still affects user experience.

‘We Don’t Really Know’

As Twitter’s erstwhile head of security, Zatko asked the company’s Head of Site Integrity—who’s responsible for addressing platform manipulation, including bots—what the underlying spam bot count was, according to the disclosure.

“We don’t really know,” was the response, according to the disclosure, which said that “the company could not even provide an accurate upper bound on the total number of spam bots on the platform.”

The reasons for not being able to provide an accurate bot count included difficulty with measurement and that “senior management had no appetite to properly measure the prevalence of bot accounts” because, as the disclosure claims, “they were concerned that if accurate measurements ever became public, it would harm the image and valuation of the company.”

Zatko’s disclosure also includes the allegation that the true number of spam accounts and bots on Twitter is probably “meaningfully higher” that the 5 percent of daily monetizable users that the social media firm claims.

The whistleblower also alleges that Twitter executives have “little or no personal incentive” to accurately count the number of bots and that “deliberate ignorance was the norm.”

The Epoch Times has reached out to Twitter with a request for comment, but received no reply by press time.

Zatko’s disclosure could give Musk’s legal team more ammunition in their legal fight against Twitter. The two sides are scheduled to go to trial in October in a Delaware court.

‘Meaningfully Higher’ Bot Count?

Musk and Twitter are facing off in court over the tech mogul’s reversal of a bid to buy the social media platform.

Key to Musk’s backing out of the deal is his claim that Twitter’s longstanding position that spam accounts and bots make up fewer than 5 percent of monetizable daily users is a fallacy.

A Twitter spokesperson told The Washington Post in response to Zatko’s claim that it “fully stands by” its earlier statements on the percentage of bots on the platform.

Twitter has sued Musk, seeking to force him to follow through with his $44 billion buyout offer.

Musk has countersued, alleging that Twitter misled his team about Twitter’s true advertising base and accusing Twitter of breach of contract and fraud. The buyout agreement includes a provision for a $1 billion termination fee to be paid by whichever side is considered to have broken the deal.

In early August, Musk signaled that his offer to buy Twitter might go through if the social media firm were to provide him with accurate data on user accounts and bots.

“If Twitter simply provides their method of sampling 100 accounts and how they’re confirmed to be real, the deal should proceed on original terms,” Musk wrote on Aug. 6 in response to a Twitter user’s comment. “However, if it turns out that their SEC [Securities and Exchange Commission] filings are materially false, then it should not.”

Musk also wrote that he wants to challenge Twitter CEO Parag Agrawal to a debate about the number of fake accounts on the platform.

“I hereby challenge [Parag Agrawal] to a public debate about the Twitter bot percentage. Let him prove to the public that Twitter has [less than 5 percent] fake or spam daily users!” Musk wrote in a post on Twitter.

Musk ‘Hoodwinked by Twitter’?

Twitter has pushed back on Musk’s allegation that he was duped into signing the buyout agreement.

“According to Musk, he—the billionaire founder of multiple companies, advised by Wall Street bankers and lawyers—was hoodwinked by Twitter into signing a $44 billion merger agreement. That story is as implausible and contrary to fact as it sounds,” Twitter stated in an Aug. 4 court filing.

Twitter also has accused Musk of creating a “public spectacle” to acquire the company while alleging that his public comments about Twitter caused its stock price to plummet.

“Rather than bear the cost of the market downturn, as the merger agreement requires, Musk wants to shift it to Twitter’s stockholders,” Twitter’s lawyers wrote in the lawsuit. “Since signing the merger agreement, Musk has repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its share price.”

Musk’s countersuit against Twitter accuses the firm of intentionally miscounting the number of bots on the platform “as part of its scheme to mislead investors about the company’s prospects.”

Musk’s lawyers also argued that Twitter’s reliance on the metric of mDAU as a basis for calculating revenue is misleading.

Further, Musk’s legal team has subpoenaed former Twitter CEO and co-founder Jack Dorsey in a bid to obtain documents and communications relating to Twitter’s use of user metrics other than monetizable daily active users, “including but not limited to, daily active users.”

Dorsey has yet to issue a public comment on the subpoena.

Jack Phillips contributed to this report.

From The Epoch Times

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