Weston Family P'ship LLLP v. Twitter, Inc.

Weston Family P'ship LLLP v. Twitter, Inc.

Opinion

LEE, Circuit Judge:

Every day, millions of people use Twitter to share and read news, offer (often horrendous) hot takes, and fire off mean tweets. Twitter, in turn, mines the personal data of its users to better target advertisements. In August 2019, Twitter [*4]  revealed that it had inadvertently shared with advertisers the personal data of users who had opted out of data-sharing, but it reassured its users that it had "fixed these issues." A few months later during its quarterly earnings announcement, Twitter disclosed that software bugs had hampered its advertisement customization and that it had suffered a $25 million revenue shortfall. The plaintiffs then filed this securities fraud lawsuit, alleging that Twitter had misled investors by hiding the scope of its software bugs when it touted its latest advertisement initiative.

] Securities laws, however, do not require real-time business updates or complete disclosure of all material information whenever a company speaks on a particular topic. To the contrary, a company can speak selectively about its business so long as its statements do not paint a misleading picture. Twitter's statements about its advertising program were not false or misleading because they were qualified and factually true. The company had no duty to disclose any more than it did under federal securities law. We thus affirm the district court's dismissal of the lawsuit.

BACKGROUND³

Twitter operates a social media platform [*5]  that allows people to share short 280-character messages to the public. Like most social media outlets, Twitter does not charge its users but rather earns money through advertising. Twitter shares certain user data—e.g., cell phone location data—with companies that pay more for ads tailored to certain users. But because of privacy concerns, Twitter has permitted users to opt out of such data-sharing since 2017.

At issue is Twitter's Mobile App Promotion ("MAP") product, which allows advertisers to prompt users to download their apps onto their phones or tablets. MAP is most effective when an advertiser knows information about the user's device settings, such as its operating system or which apps the user has already downloaded. Twitter has highlighted MAP as an important driver of Twitter's future revenue growth, and has invested in an improved, next generation MAP product.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.