According to documents filed on Wednesday, Twitter Inc (TWTR.N) is obligated to give $150 million to settle allegations that it used personal information, such as phone numbers, to target advertising after informing users that the information would be used for security purposes.
As per court documents, Twitter’s agreement encompasses allegations that it misinterpreted the “security and privacy” of user data between May 2013 and September 2019.
The company will pay $150 million as part of the settlement announced by the Justice Department and the Federal Trade Commission (FTC). In addition to the monetary settlement, the agreement requires Twitter to improve its compliance practices.
The complaint said that the misrepresentations violated the FTC Act and a 2011 settlement with the agency.
“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.
Damien Kieran, Twitter’s chief privacy officer, said in a remark that its settlement “aligned us with the agency on operational updates and program enhancements” to safeguard user privacy and security.
Twitter is a free provider that mainly makes a profit through advertising. Elon Musk, the billionaire who is purchasing the service for $44 billion, has criticized its ad-based business model and promised to broaden its revenue sources.
According to US officials, about $3 billion of Twitter’s $3.4 billion in revenue in 2019 came from advertising.
In 2021, the company made $5 billion in revenue. It stated in a filing earlier this month that it had set aside $150 million after reaching an “in principle” agreement with the FTC on a penalty.
According to the complaint, Twitter falsely claimed that it complied with the European Union-US and Swiss-US Privacy Shield Frameworks, which prohibit enterprises from ever using data in ways that consumers do not authorize.
Twitter’s settlement comes after years of controversy over tech companies’ privacy practices. In 2018, privacy advocates were outraged when it was revealed that Facebook, the world’s largest social network, was using phone numbers provided for two-factor authentication to serve ads.
Facebook, now known as Meta (FB.O), reached a similar settlement with the FTC in 2019 as part of a $5 billion agreement.
