Musk sends second termination letter to Twitter as legal battle rages
Aug 30, 2022
Washington [US], August 30 : Tesla CEO Elon Musk on Monday sent a second deal termination letter to Twitter by "leveraging" on the recent allegations made by a social media giant whistleblower, media reports said.
A former Twitter security chief Peiter Zatko last week made allegations on Twitter of wrongdoings including "Twitter's tracking and measurement of user engagement." Now, Elon Musk's legal team is trying to leverage on these allegations in a bid to defend Musk's attempt to walk away from his USD 44 billion takeover bid.
According to US media outlet Axios, Musk's lawyers on Monday filed a subpoena for Zatko, asking for "documents and communications" regarding a number of the alleged wrongdoings Zatko made.
In the new termination letter, Musk's lawyers argued that Zatko's allegations, "if true, demonstrate that Twitter has breached" a set of provisions from its merger agreement with Musk, including its compliance with all laws and that its assertion that it never filed misleading information to securities regulators.
The lawyers cite an allegation from Zatko that Twitter violated a 2011 Federal Trade Commission (FTC) consent decree regarding user data privacy, as well as "its general obligations under data privacy, unfair trade practice, and consumer protection laws and regulations," as per the media portal.
Notably, Twitter in a 2011 agreement with regulators vowed not to use information gathered for security purposes, like users' phone numbers and email addresses, to help advertisers target people with ads.
However, it must be noted that the whistleblower complaint is not similar to Musk's original argument. While Musk's legal team argued that Twitter violated its deal terms by misleading investors about the number of spam accounts on its platform and stonewalling information requests, the whistleblower alleges that Twitter deceived regulators about its efforts to reduce spam and protect Twitter from security threats.
Earlier on July 9, Musk announced the termination of a USD 44 billion Twitter purchase deal in a letter from Musk's team to Twitter. Musk decided to suspend the deal due to multiple breaches of the purchase agreement.
The Tesla CEO's team strongly believes that the proportion of spam and fake accounts is "wildly higher" than 5 per cent, according to the first letter he sent.
