The settlement covers the allegation that the company misused private information, like phone numbers, to target ads at unsuspecting users.
The hefty penalty of $150 million will settle the allegation that Twitter asked users for personal information for the express purpose of securing their accounts but then also used it to serve targeted ads.
According to statements by the US Federal Trade Commission (FTC) and the Department of Justice (DoJ), in 2013, Twitter began asking users to provide either a phone number or email address to improve account security. However, the same permissions were used to serve users' ads.
"Twitter used the phone numbers and email addresses to allow advertisers to target specific ads to specific consumers by matching the information with data they already had or obtained from data brokers," reads the FTC statement.
In addition to the penalty, the company must improve its compliance practices. For example, Twitter will have to stop profiting from deceptively collected data, notify users if their data was misused, and limit employee access to users' personal data.
US officials noted the importance of ad revenue to the company adding that of the $3.4 billion in revenue that Twitter earned in 2019, about $3 billion was from advertising.
"As the complaint notes, 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 M. Khan.
Twitter is far from the first social media company to face allegations over lax attitudes toward its users' privacy. It was revealed in 2018 that Facebook was using phone numbers provided for two-factor authentication to serve ads, enraged privacy advocates. The company, now called Meta, agreed to a $5 billion settlement with the FTC in 2019.
Twitter has been in the spotlight recently as tech billionaire Elon Musk set his aims to purchase Twitter for $44 billion.
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