Twitter was fined $150 million by the Federal Trade Commission and the Justice Department on Wednesday, as part of a settlement for misleading users about how it treated their personal data.
Twitter had told users it was collecting their email addresses and phone numbers to protect their accounts, but did not do enough to say that the information was also used to help marketers target ads, the agencies said. The misleading behavior lasted for at least six years, from 2013 to 2019, the agencies said.
Under the settlement, which must be approved by a federal court, Twitter did not admit wrongdoing.
“The $150 million penalty reflects the seriousness of the privacy against Twitter, and the substantial new compliance measures to be imposed as a result of today’s proposed settlement will help prevent further misleading tactics that threaten users’ privacy,” Vanita Gupta, the associate attorney general , said in a statement.
Regulators have in recent years scrutinized companies for their privacy practices. In 2019, the FTC fined Facebook $5 billion in a settlement over violations related to Cambridge Analytica, a voter-profiling firm. This year, the agency settled with the company once known as Weight Watchers for producing an app that collected data from young people. The FTC has also said it is considering writing new rules governing how companies collect and use data online.
Twitter has previously grappled with the FTC over privacy. In March 2011, the company settled charges that it had failed to safeguard users’ personal information after two 2009 breaches, during which hackers seized administrative control of Twitter. Under that settlement, the company agreed not to mislead consumers about how it protected their privacy for the next 20 years. Twitter also said it would conduct regular security audits.
By using personal information for ad targeting that users had provided for security purposes, Twitter violated those terms, the FTC and the Justice Department said.
“Keeping data secure and respecting privacy is something we take extremely seriously, and we have cooperated with the FTC every step of the way,” Damien Kieran, Twitter’s chief privacy officer, said in a statement, Twitter disclosed the problem in 2019 and stopped using security information for advertising, Mr. Kieran added.
The settlement comes as the social media company grapples with a tumultuous takeover from Elon Musk, the world’s wealthiest person. Last month, Twitter accepted Mr. Musk’s $44 billion bid to take the company private. But in recent weeks, Mr. Musk has cast doubt on the deal while Twitter has pressed ahead to finalize it.
On Wednesday, Mr. Musk disclosed in a filing that he had boosted his personal financial commitment to the Twitter deal, and was now planning to contribute $33.5 billion — either from his own funds or in partnership with other Twitter shareholders — toward the acquisition price.
The initial financing plan included $21 billion in equity from Mr. Musk, plus a $12.5 billion bank loan that was to be secured by Mr. Musk’s stock in Tesla, the electric carmaker he runs. The loan amount had already been reduced by half earlier this month as shares of Tesla fell amid a wider market route and Mr. Musk secured equity commitments from other investors.
In Wednesday’s filing, Mr. Musk said the entire loan had been “terminated” and that he would rely more heavily on additional equity. Twitter’s shares rose as much as 6 percent in after-hours trading, as investors interpreted the move as a sign that Mr. Musk wasn’t about to walk away from the deal.
In the filing, Mr. Musk also said that he was in discussions with other Twitter shareholders, including Jack Dorsey, a founder of the company, about rolling their existing shares into the merged company once the deal closed, rather than getting paid for their stakes. If Mr. Dorsey or certain other shareholders do so, that could reduce the amount of money that Mr. Musk has personally pledged — and the financial risk to him.