In the ongoing legal battle surrounding Tesla CEO Elon Musk’s attempt to abandon his deal to purchase Twitter, a Delaware judge has just ordered both parties to produce additional information to the other, as Fox Business reports.
According to the outlet, Chancellor Kathaleen St. Jude McCormick last week compelled Twitter to give Musk more details related to prior company estimates on the true volume of fake accounts on the platform, and she also denied Musk’s efforts to disguise the methods of analysis he used to justify reneging on the acquisition agreement.
Musk notches discovery win
McCormick’s order requires Twitter to give Musk access to additional information on bot accounts associated with the social media platform, namely, data connected with 9,000 accounts audited by the company back in 2021.
Such production, it is thought, could bolster Musk’s arguments that Twitter did not disclose sufficient information about the true number of fake accounts on its interface and his claim that upwards of 30% of “monetizable daily active users” are indeed bots.
Further, McCormick ruled that Twitter must provide Musk with documents pertaining to additional metrics, whether or not they relate to monetizable daily active users, including so-called “User Active Minutes” information, yet another avenue through which the mercurial billionaire’s lawyers might be able to demonstrate that the company misled securities regulators and investors about the true health of its business.
Musk did not land an unqualified victory in this latest legal skirmish, however, given that McCormick denied other data requests made of Twitter, declaring them “absurdly broad” in that a literal reading of the ask would demand that the company turn over “trillions upon trillions of data points.”
Perhaps further muddying the waters in terms of whether Musk will ultimately be compelled to honor his agreement to purchase the social media giant are claims recently made by former Twitter security chief Peiter Zatko, according to The Hill.
Zatko alleges that Twitter is characterized by substantial security problems that jeopardize user privacy as well as national security, and he also claims that the company made false claims concerning its security safeguards in violation of a Federal Trade Commission (FTC) settlement.
“Twitter is grossly negligent in several areas of information security. If these problems are not corrected, regulators, media and users of the platform will be shocked when they inevitably learn about Twitter’s severe lack of security basics,” Zatko wrote in an exhibit to the complaint he lodged with the Securities and Exchange Commission, the Department of Justice and the FTC.
Sen. Chuck Grassley (R-IA), whose staff has reportedly spoken with Zatko about the issues he raised, explained, “Take a tech platform that collects massive amounts of user data, combine it with what appears to be an incredibly weak security infrastructure and infuse it with foreign state actors with an agenda, and you’ve got a recipe for disaster.”
Deal in the balance
Though Musk filed paperwork earlier this year declaring his intention to back out of the highly-publicized $44-billion purchase of Twitter, and the social media company swiftly initiated litigation over the deal, the outspoken entrepreneur later declared that the agreement could “proceed on original terms,” as long as the company confirmed key details about bot accounts.
As things stand now, however, the discovery process is set to continue under the above parameters, and with a trial date set for October, it remains far from clear whether the multi-billion dollar acquisition will go forward, or if Musk will be released from further obligation.