According to court documents, the settlement involves charges that Twitter misrepresented the “security and privacy” of user data between May 2013 and September 2019.
Digital Desk: Twitter Inc has agreed to pay a $150 million penalty and put in new safeguards to settle federal regulators’ allegations that the social media company gave advertisers improper access to users’ personal information.
According to court documents, the settlement involves charges that Twitter misrepresented the “security and privacy” of user data between May 2013 and September 2019.
As part of the settlement announced by the Justice Department and the Federal Trade Commission, the corporation will pay $150 million (FTC). In addition to the monetary settlement, Twitter must strengthen its compliance practices under the terms of the agreement.
The misrepresentations violated the FTC Act and a 2011 settlement with the agency as per the complaint.
“Specifically, while Twitter represented to users that it collected their telephone numbers and email addresses to secure their accounts, Twitter failed to disclose that it also used user contact information to aid advertisers in reaching their preferred audiences,” the complaint said.
In a statement, Twitter’s chief privacy officer, Damien Kieran, said the settlement “aligns us with the agency on operational upgrades and program enhancements” to protect user privacy and security.
Twitter is a free service that mostly makes money from advertising. Elon Musk, the billionaire who bought the service for $44 billion, has slammed its ad-based economic model and promised to diversify its revenue streams.
“What else isn’t true if Twitter isn’t telling the truth here? This is extremely alarming news,” Musk commented on the social media company’s ad practices and the penalties in a tweet late Wednesday.
Officials from the United States pointed out that around $3 billion of Twitter’s $3.4 billion in earnings in 2019 came from advertising.
In 2021, the corporation generated $5 billion in revenue. A filing earlier this month stated that it had set aside $150 million after reaching an “in principle” agreement with the FTC on a penalty.
“Twitter obtained data from users on the pretext of harnessing it for security purposes but then ended up also using the data to target users with ads,” said FTC Chair Lina Khan in a statement.
“This practice affected more than 140 million Twitter users while boosting Twitter’s primary source of revenue,” Khan added.
Twitter also allegedly misrepresented its compliance with the European Union-US and Swiss-US Privacy Shield Frameworks, which prohibit corporations from utilizing data in ways that customers have not authorized.
The settlement with Twitter comes after years of controversy over digital corporations’ privacy policies.
In 2018, privacy advocates were outraged when it was revealed that Facebook, the world’s largest social network, was exploiting phone numbers submitted for two-factor verification to deliver adverts.
It may be mentioned that Facebook, now known as Meta, agreed to a $5 billion settlement with the FTC over the same issue in 2019.
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