Illustration by Alex Castro / The Verge
This summer, the SEC conducted an active review of Twitterâs user numbers in response to concerns of bot activity, as revealed in new filings made public on Wednesday. The review came in the weeks after Elon Musk raised concerns over the same user figures and suggests federal regulators took Muskâs allegations seriously.
Notably, the review began more than a week before the full whistleblower report by Peiter âMudgeâ Zatko, although it deals with many of the same concerns he reported to the SEC.
âWe note your estimate that the average number of false or spam accounts during fiscal 2021 continues to represent fewer than 5% of mDAU,â the commission wrote to Twitter in a letter dated June 15th. âTo the extent material, please disclose the methodology used in calculating these figures and the underlying judgements and assumptions used by management.â
Seven days later, Twitter responded with a description of the methodology that is broadly consistent with the companyâs public statements. As described in the statement, Twitter conducts a human review of thousands of randomly chosen accounts out of the mDAU sample every quarter and flags for spam and platform manipulation where appropriate.
Itâs not clear whether this explanation was good enough for the SEC. A new letter announced the completion of the review on July 27th but gave no further judgment of Twitterâs conduct, saying only that âthe company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.â
Twitterâs unusual system for measuring âmonetizable daily active usersâ (or mDAU) has been at the center of both Elon Muskâs short-lived takeover attempt and a recent whistleblower report. Broadly, Twitter maintains that measuring the smaller sample allows it to more effectively track whether real human users on the platform are seeing the ad spaces it sells. But because no one outside of Twitter knows whether a given account is included in the mDAU sample, it makes it nearly impossible for outsiders to fact-check the companyâs numbers.
In his whistleblower report, Peiter âMudgeâ Zatko cited the mDAU system as a primary cause of growing bot activity on the platform, alleging that senior management was âconcerned that if accurate measurements [of bot activity] ever became public, it would harm the image and valuation of the company.â
Twitter did not immediately respond to a request for comment.