Twitter has agreed to pay $150 million to settle a lawsuit filed by the Federal Trade Commission and the Department of Justice. The lawsuit accused the social media giant of breaching its data privacy commitments by using its member's phone numbers and email addresses to serve targeted advertising.

The lawsuit alleged that Twitter had misrepresented its policies between 2013 and 2019 while also violating the FTC Act and a previous settlement order. Apart from the hefty fine, Twitter also agreed to increased audits of its data privacy activities, along with other privacy restrictions.

Twitter allegedly used the email addresses and phone numbers it had gathered from its two-factor authentication system to target users with customized ads. The company apologized for the practice in 2019 and reasoned that it had "inadvertently" routed the user data to its advertising system. The lawsuit also claimed that Twitter fraudulently claimed to comply with the European Union-US and Swiss-US Privacy Shield Frameworks throughout that time, which limited how social media may reuse user data.

Associate Attorney General Vanita Gupta said the large penalty reflects just how serious the situation is and how much of an impact Twitter's actions have had on data security. He added that the expanded compliance and restrictions that Twitter has agreed to would ensure that it does not once again threaten its users' data privacy. In 2019, the FTC fined Facebook $5 billion for similar behavior and other privacy abuses.

Twitter will be required to maintain comprehensive privacy and information security programs, as well as to conduct frequent testing and audits of its protections under the new compliance standards. After a federal judge accepts the settlement, Twitter will be required to publicly inform everyone who joined the social media network before September 2019 of the new policies.

In a blog post and a tweet thread, Twitter's chief privacy officer Damien Kieran acknowledge the settlement. Kieran said the deal with the FTC reflects Twitter's pre-existing commitments and investments in security and privacy. He added that the company would continue to work with regulators to ensure that they understand how Twitter's security and privacy procedures are constantly evolving.

Meanwhile, Tesla and SpaceX founder, Elon Musk, announced that he would no longer be funding his bid for Twitter by borrowing against his Tesla holdings. The announcement came after Tesla's stock dropped significantly over the past few weeks.

Musk revealed the expiry of a series of margin loans against Tesla stock, which were included in his initial financing plan to purchase Twitter. Musk pledged an extra $6.25 billion in equity investment as part of the announcement, increasing his total commitment to $33.5 billion.