Twitter has refused to comply with Elon Musk’s repeated requests for the evaluation of spam and fake accounts on the platform, according to a letter from his lawyers Monday morning, leaving Musk threatening to terminate his deal to buy the social media giant.
Under terms of the merger agreement, Twitter is required to provide the Tesla CEO with any data he requests as it may relate to the transition of his ownership. The repeated denial of these requests since May 9, according to Musk’s lawyers, raises concern over whether the company is purposefully withholding information from him due to what access to such data would uncover.
“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” Mike Ringler, Musk’s attorney, wrote in a letter to Twitter’s chief legal officer, Vijaya Gadde.
Reached for comment, a Twitter spokesperson told Fast Company that it is following the terms of the agreement and it still expects the deal to close. “Twitter has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement,” the spokesperson said. “We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”
Last month, Musk announced that his $44 billion deal with Twitter would be put on a temporary hold, pending proof that bots and other spam or fake accounts comprise fewer than 5% of all Twitter users. Though Twitter estimated in an regulatory filing this spring that of its 229 million active users, spam accounts did indeed fall under this 5% threshold, Musk has said fake accounts could make up at least 20% of all users.
Musk’s complaints about fake and bot accounts on the social media platform are nothing new. In a 2018 Twitter post he wrote, “Lots of fake accounts on Twitter characterized by high following/follower ration to make it seem like many real people when it isn’t. Wonder why.”
Fake accounts are notoriously difficult to detect and remove, with many programmed to spread false information and trick followers into handing over financial information. For Musk himself, with more than 95 million followers, one estimate from SparkToro indicated that over half of his followers are fake, spam, or inactive users.
With the deal originally priced at $54.20 a share, Twitter shares have fallen over 3% since the release of Musk’s letter, landing at $38.92 this morning.