Elon Musk Escalates Rift With Twitter Over Fake Accounts, Threatens To Pull Plug On Deal

Elon Musk’s bid to takeover Twitter has faced several stumbling blocks since it was first announced, but now the acquisition is in jeopardy over one of Musk’s pet issues with the network -- fake accounts.

On Monday, Musk accused Twitter of “resisting and thwarting” his right to information about fake accounts on the platform, calling it a “clear material breach” of their acquisition agreement. This was revealed in a letter sent to Twitter by Skadden Arps attorney Mike Ringler on Musk’s behalf.

In the letter, Ringler accused Twitter of withholding its data on spam accounts from Musk in what he described as an effort to "obfuscate and confuse the issue." Going further, Ringler said Twitter was obligated to share its data with Musk before the acquisition deal is finalized and that as the company's prospective owner, Musk is "entitled" to seek the data he has requested.

"At this point, Mr. Musk believes Twitter is transparently refusing to comply with its obligations under the merger agreement, which is causing further suspicion that the company is withholding the requested data due to concern for what Mr. Musk’s own analysis of that data will uncover," Ringler wrote in the letter.

Musk has been adamant about addressing the problem of fake accounts on Twitter since announcing his takeover bid. In April, Musk tweeted that he would require Twitter to "authenticate all real humans" if he succeeded in taking over the company. In the past, Musk has complained that Twitter bots were the platform’s “single most annoying problem.”

On May 17, Musk announced that his bid would be put on hold over what he said was Twitter’s refusal to turn over all of its bot data to him before the deal was finalized. After a tweet where Musk alleged 5% of Twitter users were bots, the company accused him of violating a nondisclosure agreement that was part of their deal.

The rift over data, however, has carried the risk of scuttling Musk’s takeover bid, a move Ringler warned is possible if his client’s demands were not fully satisfied. By refusing to provide Musk with the data he seeks, Ringler said Twitter was committing a "clear material breach" of the terms of the merger.

Musk "reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement," Ringer wrote.