Someone please explain this to me.
Best mugshot ever
Texas Attorney General Ken Paxton said Monday he is investigating Twitter over its reporting of how many accounts on the platform are from bots and fake users, saying the company may be misrepresenting the number to inflate its value and raise its revenue.
Twitter has claimed in its financial regulatory filings that less than 5% of its daily active users are spam accounts. But Paxton on Monday alleged that spam accounts could make up as much as 20% of users or more.
“Bot accounts can not only reduce the quality of users’ experience on the platform but may also inflate the value of the company and the costs of doing business with it, thus directly harming Texas consumers and businesses,” Paxton said.
False reporting of fake users could be considered “false, misleading, or deceptive” under the Texas Deceptive Trade Practices Act, he said. Paxton sent Twitter a civil investigative demand, requiring the social media company to turn over documents related to how it calculates and manages its user data.
Twitter could not be immediately reached for comment on the investigation.
The investigation comes as Tesla CEO Elon Musk is also raising questions about the number of fake accounts on Twitter. Musk, who is in negotiations to buy the social media company, threatened to walk away from the deal saying that Twitter has not provided data he has requested on spam accounts.
I mean, I guess this could be a matter of interest for the state of Texas under its Deceptive Trade Practices Act. Hard for me to believe that it’s of such urgency right now as to merit action from the Attorney General – the question of how many fake Twitter accounts there are is as old as Twitter is – and of course the fact that it coincides with Elon Musk’s performance art bid to buy Twitter, which if there’s any justice in the world will cause him serious financial pain, makes it even less credible. But hey, surely we can take Ken Paxton’s word for it, right?
I do want to call your attention to the fact that what Paxton has actually done is to send Twitter a “civil investigative demand” for this info. Do you know what that means? Well, I now do, thanks to some research I did when a previous lawsuit filed by Twitter against Paxton, who had been demanding information about their ban of The Former Guy, was dismissed by a California judge. Paxton has made a similar “civil investigative demand”, and the judge ruled that Twitter had no cause to sue over this because a “civil investigative demand” is what the legal folks call “self-executing”, which is a fancy way of saying “completely voluntary”. Twitter was free to ignore the CID by Paxton, who would have had to sue them in federal court to enforce it, with Twitter then having the opportunity to argue that he had no jurisdiction over them in this matter.
That all sure sounds familiar here. If that’s the case – and Paxton clearly knows this – then what we have here is just a bit of trolling, plus some sucking up to another rich dude that Paxton likes. If you want to make the argument that this is a thing the state’s top lawyer ought to be doing, you go right ahead. Reform Austin has more.
Completely voluntary compliance? Self-executing? OAG enforcement action in federal court?
None of this sound right or even plausible. See:
TEXAS BUSINESS AND COMMERCE CODE
Sec. 17.61. CIVIL INVESTIGATIVE DEMAND.
(a) Whenever the consumer protection division [of the Attorney General’s Office] believes that any person may be in possession, custody, or control of the original copy of any documentary material relevant to the subject matter of an investigation of a possible violation of this subchapter [Deceptive Trade Practices-Consumer Protection Act], an authorized agent of the division may execute in writing and serve on the person a civil investigative demand requiring the person to produce the documentary material and permit inspection and copying.
(b) Each demand shall:
(1) state the statute and section under which the alleged violation is being investigated, and the general subject matter of the investigation;
(2) describe the class or classes of documentary material to be produced with reasonable specificity so as to fairly indicate the material demanded;
(3) prescribe a return date within which the documentary material is to be produced; and
(4) identify the persons authorized by the consumer protection division to whom the documentary material is to be made available for inspection and copying.
…
(h) A person on whom a demand is served under this section shall comply with the terms of the demand unless otherwise provided by a court order.
…
Sec. 17.62. PENALTIES. (a) Any person who, with intent to avoid, evade, or prevent compliance, in whole or in part, with Section 17.60 or 17.61 of this subchapter, removes from any place, conceals, withholds, or destroys, mutilates, alters, or by any other means falsifies any documentary material or merchandise or sample of merchandise is guilty of a misdemeanor and on conviction is punishable by a fine of not more than $5,000 or by confinement in the county jail for not more than one year, or both.
(b) If a person fails to comply with a directive of the consumer protection division under Section 17.60 of this subchapter or with a civil investigative demand for documentary material served on him under Section 17.61 of this subchapter, or if satisfactory copying or reproduction of the material cannot be done and the person refuses to surrender the material, the consumer protection division may file in the district court in the county in which the person resides, is found, or transacts business, and serve on the person, a petition for an order of the court for enforcement of Sections 17.60 and 17.61 of this subchapter. If the person transacts business in more than one county, the petition shall be filed in the county in which the person maintains his principal place of business, or in another county agreed on by the parties to the petition.
(c) When a petition is filed in the district court in any county under this section, the court shall have jurisdiction to hear and determine the matter presented and to enter any order required to carry into effect the provisions of Sections 17.60 and 17.61 of this subchapter. Any final order entered is subject to appeal to the Texas Supreme Court. Failure to comply with any final order entered under this section is punishable by contempt.
https://statutes.capitol.texas.gov/Docs/BC/htm/BC.17.htm#17.61
See, Twitter doesn’t reside or maintain its principal place of business in any county in Texas. It does business in all of them, or is likely to be found to do so, but that’s not sufficient to determine the appropriate court.
More importantly, Paxton doesn’t want this to wind up in front of a judge, so he’s not going to file an enforcement action. This is just a way of grabbing headlines.
If you have buyer’s remorse, just call off the deal. Dude is lucky he was born rich, so that he’s well insulated from any real consequences of his childish attention seeking.
JURISDICTION IN TEXAS – LONG-ARM OR OTHERWISE?
(i) Personal service of a similar investigative demand under this section may be made on any person outside of this state if the person has engaged in conduct in violation of this subchapter. Such persons shall be deemed to have submitted themselves to the jurisdiction of this state within the meaning of this section.
Tex. Bus. & Com. Code § 17.61(i)
Sec. 17.56. VENUE. An action brought under this subchapter may be brought:
(1) in any county in which venue is proper under Chapter 15, Civil Practice and Remedies Code; https://statutes.capitol.texas.gov/Docs/CP/htm/CP.15.htm#15
or
(2) in a county in which the defendant or an authorized agent of the defendant solicited the transaction made the subject of the action at bar.
Tex. Bus. & Com. Code § 17.56
ALL-PURPOSE COMMENT & CAVEAT
It’s tricky to predict how a court would rule (even for competent lawyers), especially when the identity of the judge, or the composition of the appellate panel, is unknown. Not to mention before a lawsuit is even filed. Not to mention on a novel question of law or application thereof. A good start for any such assessment, however, would be the text of the relevant statute.
That appears to be the DTPA here, but the state anti-trust statute also has a provision for civil investigative demands. See Tex. Bus. & Com. Code Sec. 15.10.
The formal moniker for that law is the Texas Free Enterprise and Antitrust Act of 1983 (Chapter 15 of the Texas Biz & Comm Code)