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Musk-Twitter Deal: Legal Experts Believe It Would Be Difficult to Prove Investors Were Misled Over Bot Details

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Elon Musk may find a way to prove his claim that spam accounts on Twitter platform are significantly higher than the social media company has estimated, but showing that he and investors were misled will be difficult, legal experts say.

Musk tweeted on Tuesday that his $44 billion (roughly Rs. 3,40,923 crore) deal to acquire Twitter could not proceed until the company shows proof to back its estimate that spam accounts make up less than 5 percent of its user base. He has said he believes the figure is at least four times greater and that he will “defeat the bots or die trying.”

Independent researchers have projected that 9 percent to 15 percent of the millions of Twitter profiles may be bots.

For its part, Twitter has said in its regulatory filings that it applied “significant judgment” in coming up with the estimate and has cautioned that its disclosure may not accurately represent the actual number of spam accounts.

It is these disclaimers that give Twitter protection against potential lawsuits, be they from Musk over the deal or shareholders over the accuracy of the company’s regulatory statements, four securities law experts interviewed by Reuters said.

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Even if Twitter’s estimate is off, a plaintiff would have to show that the San Francisco-based company was seeking to willfully mislead investors — a tall order to prove in court. The Securities and Exchange Commission (SEC), the US regulator which oversees the disclosures of publicly listed companies, would have a hard time doing so for the same reasons, the experts said.

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“It would be difficult to establish the basis for either an SEC enforcement case or a shareholders action, unless it could be shown that Twitter deliberately or recklessly disregarded information that would show that its spam estimates were misleading,” said law firm Moses & Singer partner Howard Fischer.

An SEC spokesperson declined to comment.

A Twitter spokesperson said the company’s board planned to complete the deal with Musk at the agreed price and enforce the merger agreement. Musk representatives did not respond to requests for comment.

Another legal hurdle for Musk is his decision to waive due diligence when he negotiated the Twitter deal. Legal experts have said this makes it more challenging for Musk to argue in court that Twitter misled him.

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To be sure, Musk may be able to walk away or renegotiate the deal at a lower price even if the law is on Twitter’s side. This is because any litigation is likely to be protracted, and Twitter may decide it makes more sense to agree to a lower price or receive the $1 billion (roughly Rs. 7,750 crore) break-up fee Musk has to pay for not completing the deal, rather than try to force him to complete the transaction in court.

Investors are betting as much. Twitter shares ended at $38.32 (roughly Rs. 2,900) on Tuesday, a close to 30 percent discount to the $54.20 (roughly Rs. 4,200) per share deal price, indicating the market deems it likely that the deal gets completed at a lower price or is abandoned.

SHOWING BAD FAITH

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To meet the legal standard of showing Twitter misled investors over the spam accounts, evidence that the company acted in bad faith would be required, the experts said. This could be internal documents like e-mails or testimony from a whistleblower.

“This failure would have to rise to the level of willful ignorance, not just negligence,” said Georgetown University Law School professor Urska Velikonja.

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The issue of fake and spam accounts is important for Twitter’s business. The company’s shares plunged in 2018 after it carried out a purge of automated and spam accounts that prompted its monthly active users to drop by 1 million, when analysts had expected a gain of 1 million users.

Robert Frenchman, a partner specialising in white-collar crime at law firm Mukasey Frenchman, said it was possible that the SEC would end up reviewing the issue of Twitter’s spam account disclosures given the public attention it has attracted. But he added he did not expect Twitter to face any significant legal threat.

“I don’t see that as something that is likely to fall into the category of materially misleading and I bet that language is carefully drafted and with a methodology that may not be foolproof but that’s reasonable,” Frenchman said.

© Thomson Reuters 2022


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What Are WhatsApp Polls and How Do You Use Them? All You Need to Know

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WhatsApp’s new features and updates which have rolled out over the past few months have made the messaging experience much better. Now, WhatsApp users can even create polls in personal and group chats to see what their friends and contacts think. Both iOS and Android users can use this feature. A poll could help take the opinions of group members on any topic or idea, or could be useful for making plans quickly. Just like your chats, the responses you send to a poll question will be protected by end-to-end encryption. At the moment, Telegram and Facebook Messenger allow group polls. You can easily start using this new WhatsApp feature on your smartphone.

Here is How to Create a WhatsApp Poll

Step 1: Update WhatsApp to the latest version

Step 2: Open the private or group chat in which you want to create a poll

Step 3: For Android, tap on the paper clip icon at the bottom of the screen. For iOS, select the plus (+) icon at the bottom of the screen.

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Step 4: Select ‘Poll’

Step 5: Type the question you want to ask, along with response options

Step 6: Finally, tap on ‘Send’ to share the poll

Up to twelve response options can be offered to recipients for each poll, and these are not time-bound. Users can also see the responses selected by others by tapping on ‘View votes’.

The Meta-owned messaging app has recently worked on several updates, rolling out new tools including the Call Link feature, the ability to message yourself, and Companion Mode. While some of these new features are not available to all users at the moment, WhatsApp does plan to make them accessible to everyone in the coming days. The most recent and talked-about feature apart from WhatsApp polls is Communities. These allow users to have separate groups under one “Community” to organize large conversations.

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“With Communities, we’re aiming to raise the bar for how organizations communicate with a level of privacy and security not found anywhere else. The alternatives available today require trusting apps or software companies with a copy of their messages – and we think they deserve the higher level of security provided by end-to-end encryption,” stated WhatsApp in a blog post.

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Elon Musk Calls Donald Trump’s Twitter Ban ‘Grave Mistake’, Condemns Violence

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Twitter’s ban on then President Donald Trump after January 6, 2021, attack on the US Capitol by his supporters was a “grave mistake” that had to be corrected, Chief Executive Elon Musk said on Friday, although he also stated that incitement to violence would continue to be prohibited on Twitter.

“I’m fine with Trump not tweeting. The important thing is that Twitter correct a grave mistake in banning his account, despite no violation of the law or terms of service,” Musk said in a tweet. “Deplatforming a sitting President undermined public trust in Twitter for half of America.”

Last week, Musk announced the reactivation of Trump’s account after a slim majority voted in a Twitter poll in favor of reinstating Trump, who said, however, that he had no interest in returning to Twitter. He added he would stick with his own social media site Truth Social, the app developed by Trump Media & Technology Group.

Republican Trump, who 10 days ago announced he was running for election again in 2024, was banned on January 8, 2021, from Twitter under its previous owners.

At the time, Twitter said it permanently suspended him because of the risk of further incitement of violence following the storming of the Capitol. The results of the November 2020 presidential election won by Democrat Joe Biden were being certified by lawmakers when the Capitol was attacked after weeks of false claims by Trump that he had won.

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Trump repeatedly used Twitter and other sites to falsely claim there had been widespread voter fraud, and had urged supporters to march on the Capitol in Washington to protest.

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The attack is being investigated by US prosecutors and a congressional committee.

Twitter did not immediately respond to a request for comment on Friday on Musk’s statement that Trump did not violate any Twitter terms of service when his account was suspended.

Earlier on Friday, Musk tweeted that calling for violence or incitement to violence on Twitter would result in suspension, after saying on Thursday that Twitter would provide a “general amnesty” to suspended accounts that had not broken the law or engaged in spam.

Replying to a tweet, Musk said it was “very concerning” that Twitter had taken no action earlier to remove some accounts related to the far-left Antifa movement. In response to another tweet asking if Musk considered the statement “trans people deserve to die” as worthy of suspension from the platform, the billionaire said: “Absolutely”.

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Change and chaos have marked Musk’s first few weeks as Twitter’s owner. He has fired top managers and it was announced that senior officials in charge of security and privacy had quit.

© Thomson Reuters 2022


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WhatsApp Reportedly Testing Voice Status Update for iOS Beta: All Details

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WhatsApp, the Meta-owned instant messaging app, is reportedly working on a feature that will let iOS users share voice notes in their status updates. As of now, the users can only share pictures, videos and links in their WhatsApp status. However, once the new feature will be rolled out, WhatsApp users on iOS will be reportedly able to share voice notes or voice clips as well in their status updates on the app. According to the report, the messaging platform is testing the feature on iOS Beta for an upcoming update.

According to a report by WhatsApp development tracker WABetaInfo, WhatsApp users on iOS will be able to share a voice note of up to 30 seconds alongside text in their status updates, similar to what they can currently do in a WhatsApp chat.

The report has also shared a screengrab of the same, hinting at the upcoming feature, which shows a microphone icon on the bottom of the text status.

WhatsApp on iOS users will be required to click on the microphone icon and record their voice to upload it as their status update. They can even add text to it, if needed. It is worth noting that the voice status updates will only be shared with the people selected in the privacy settings. Also, these voice notes will always be end-to-end encrypted.

Not only iOS, but this ability is said to be also being tested in WhatsApp beta for Android’s upcoming update. As of now, this feature is still under development, so it would be very early to say anything.

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Meanwhile, WhatsApp recently rolled out WhatsApp Polls to users on both Android and iOS. The Polls feature was introduced alongside ‘Communities’, a feature that allows users to have separate groups under one umbrella to organise group conversations. WhatsApp Polls lets users create polls within the group with the ability to vote. Facebook Messenger and Telegram currently allow users to add group polls. WhatsApp’s poll feature will be protected by end-to-end encryption.

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