Twitter is to pay $150 million as part of a settlement after it was accused of misusing private information for targeted advertising. According to court documents, the company lied to users that the information would be used for security reasons.
The complaint accuses Twitter of violating 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.
Twitter has also agreed to improve its compliance practices in addition to the settlement fee, according to the Federal Trade Commission FTC and the Justice Department.
Twitter, like other social media companies, derives the bulk of its revenue from advertising. According to U.S. authorities, Twitter generated $3.4 billion in revenue in 2019, with about $3 billion of that revenue coming from advertising.
In order to target advertising, several social media companies have been found wanting of encroaching on users data.
“Twitter obtained data from users on the pretext of harnessing it for security purposes, but then ended up also using the data to target users with ads. This practice affected more than 140 million Twitter users while boosting Twitter’s primary source of revenue,” said FTC Chair Lina Khan.
The sources for this piece include an article in Reuters.