Texas AG jumps into Twitter takeover drama to bolster Musk | technology

By MARCY GORDON – AP Business Writer

WASHINGTON (AP) – State officials across the country have attacked big tech companies in courts and state legislatures, and federal agencies have attacked Twitter over alleged user privacy violations.

Now, an attorney general with an oversized personality and an edge-skating attitude is stepping into the maelstrom of Musk’s $44 billion bid for Twitter almost in Elon Musk’s league. He’s launching a Twitter investigation into “possible hoaxes” about bots on his platform, to back up complaints Musk himself made this week when he threatened to back out of the deal.

Texas Attorney General Ken Paxton announced his probe into Twitter on Monday, just hours after Musk, the billionaire Tesla and SpaceX CEO, accused Twitter of refusing to explain the extent of its spam bot and fake accounts to disclose.

The unexpected turn in Musk and Twitter’s months-long drama sent the company’s shares down 1.5%, likely angering shareholders, who filed lawsuits against Musk last month, accusing him of lowering the stock price. Twitter’s shares have fallen more than 20% over the past month.

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Paxton’s unusual move struck observers as unique and possibly inappropriate, though he likely has legal authority to prosecute. Initiating his investigation, Paxton suggested that Twitter may have violated the Texas Fraud Trade Practices Act.

The Attorney General’s crackdown on Twitter is very different from the increasing legal action being taken by groups of states that have come together to tackle, for example, alleged anti-competitive practices by Google and Meta, or to investigate TikTok and its potential harmful effects on the psyche of young users Health.

Individual Attorneys General do not typically investigate large public companies for their regulatory filings. In the case of Twitter, the data submitted to the US Securities and Exchange Commission involves complex federal laws.

“The SEC has the resources, expertise and legal remedies to do this, and I doubt Texas has any of those,” Marc Fagel, a securities law expert who was regional director of the SEC’s San Francisco office, said in an interview . “As far as I can tell, this is a headline-based investigation.”

Johnny Koremenos, a spokesman for the Republican Attorneys General Association, told The Associated Press that he is not aware of any other attorney general who may be planning to launch a similar investigation into Twitter.

James Tierney, a former Maine attorney general who teaches at Harvard, has criticized Paxton’s investigation, which he says supports Musk, whose electric-car maker Tesla recently opened a plant in Austin, Texas.

“Consumer laws exist to protect consumers from real harm,” Tierney said. “They do not exist to allow a government official to interfere in ongoing corporate transactions on behalf of a member.”

Paxton notes that Twitter said in its SEC filings that less than 5% of all users are bots, although Paxton claims “they can actually make up 20% or more.” The Attorney General’s Office asked Twitter to turn over documents by June 27 showing how it calculates and manages its user data.

“The difference could dramatically impact the cost to Texas consumers and businesses doing business with Twitter,” Paxton claimed in his announcement. He claimed the discrepancy could skyrocket Twitter’s value, now estimated at $30.5 billion, and increase the cost of doing business.

The Texas attorney general, who has long carved out a distinctive public persona for himself, is unlikely to mind criticism. Paxton is yet to go to court a day after being charged with securities fraud in 2015, and his career has turned upside down what it means to be a compromised public official in Texas.

His detractors say Paxton has become an example of how powerful public figures themselves can drag out criminal charges that would otherwise threaten their careers and defy predictions of their political demise.

Associated Press writer Geoff Mulvihill of New Jersey contributed to this report.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, transcribed or redistributed without permission.

Texas AG jumps into Twitter takeover drama to bolster Musk | technology

Source link Texas AG jumps into Twitter takeover drama to bolster Musk | technology

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