An Overview of the Potential Legal Troubles from the Twitter Blue Fiasco

Elizabeth Huh

Elon Musk’s ownership of Twitter has been rife with challenges, from the initial revocation of his offer to the sudden layoffs. One notable blip was the new Twitter Blue system. Twitter originally gave out blue check marks to accounts such as official organizations and individuals that it verified to be notable and trustworthy.[1] However, in early November, Twitter launched a new system where users could purchase blue check marks for their accounts through a monthly subscription of eight dollars without Twitter independently verifying the authenticity of the accounts.[2]

There was an immediate onslaught of accounts with blue check marks impersonating companies and famous individuals, including Elon Musk himself.[3] These “verified” spoof accounts posted potentially damaging tweets. For example, a PepsiCo Inc. impersonator tweeted that “Coke is better” and a Nintendo America impersonator posted an image of Mario giving the middle finger.[4] Some came with immediate, real consequences:  an account posing as Eli Lilly and Company, a pharmaceutical company, tweeted that insulin was now free and its stock price dropped sharply—albeit temporarily—as a result.[5] There were thousands of retweets before the real company clarified on Twitter that insulin was, in fact, not free.[6] Twitter has since halted the new system and plans to launch a new one that uses colors to distinguish companies, governments, and individuals, and appends a separate check mark that demonstrates Twitter’s independent verification.[7]

Various experts have posited that the blue check mark debacle potentially exposed Twitter to legal troubles. In an interview with Reuters, attorney Jay Edelson of a class action law firm said that he was researching potential fraud claims. Companies could seek to sue Twitter for enabling imposters to trick consumers by awarding the check marks, and shareholders, such as those for Eli Lilly and Company, could try to sue for damages. However, the Reuters article highlighted the high thresholds to succeeding on these theories. Under federal securities law, plaintiffs must demonstrate that Twitter had fraudulent intent. Twitter was likely negligent at best and Professor John Coffee opined that negligence is not enough to establish liability, even under state anti-fraud laws. Further, for both shareholder and consumer litigation, plaintiffs must demonstrate that Twitter should be held responsible for its users’ conduct.[8] However, online publishers have broad immunity from liability under Section 230 of the Communications Decency Act for content posted by their users.[9] Various legal experts told Reuters that it could be argued that Twitter should not be entitled to protection because, by meting out these verification badges, Twitter contributed to the users’ damaging content.[10] In short, Twitter directly participated in misleading the users.[11] While the argument for excluding Twitter from immunity may have merit, the intent requirement alone still poses a significant hurdle.

Corporations may also try to sue Twitter under trademark infringement by arguing that Twitter hurt their brands through its deficient verification system.[12] However, there are various hurdles to this approach as well. Law professor Alexandra Roberts told Reuters that the plaintiffs will need to show that the tweets were not fair-use criticism, parody, or satire and that Twitter knowingly contributed to the infringement.[13] Trademark laws seek to prevent commercial confusion but many of these parody accounts tweeted what a reasonable person would understand to be a joke.[14] Thus, a trademark infringement claim may be even more difficult to make than a consumer fraud claim.

Ultimately, the most likely consequence is extralegal. Twitter created an untrustworthy environment for advertisers who will likely avoid the platform for marketing purposes until verification problems are resolved. The threat is twofold because, while there have always been scammers on Twitter, Twitter Blue provided the authentication that both increased and strengthened fraudulent activity because consumers relied on the blue check mark’s representation of trustworthiness. Further, even if these brands leave Twitter, they must still actively monitor Twitter for fraudulent accounts and report them.[15] Thus, the broader underlying issue is a lack of oversight of misinformation on these platforms.[16] Social media companies, such as Twitter, must take further steps to prevent the spread of misinformation and protect both users and consumers on their sites.


[1] Alyssa Lukpat, Twitter Stops Giving Out Blue Check Marks After Impersonators Take To the Platform, Wall St. J. (Nov. 11, 2022, 9:34 PM), [] [].

[2] Riddhi Setty, Twitter Blue Checks Raise Trademark Risk After Fake Lilly Fiasco, Bloomberg L. (Nov. 22, 2022, 12:45 PM), [] []; @TwitterSupport, Twitter (Nov. 11, 2022, 2:18 AM), [] [].

[3] Setty, supra note 2; Tim Lince, “Out of Control”:  Brand Impersonation on Twitter Rife as Risk of Fraud and Scams Arise, World Trademark Rev. (Nov. 11, 2022), [] [].

[4] Setty, supra note 2; Lince, supra note 3.

[5] Lukpat, supra note 1.

[6] Id.

[7] Alyssa Lukpat, Elon Musk Says Twitter Is Launching ‘Verified’ Service Next Week, Wall St. J. (Nov. 25, 2022, 9:27 PM), [] [].

[8] Alison Frankel, Would Twitter Get Online Publisher Immunity in Fake ‘Blue Check’ Suits?, Reuters (Nov. 15, 2022, 11:56 AM), [] [].

[9] Id.; Debra C. Weiss, Would Twitter Get Section 230 Immunity in Lawsuits Filed over Fake Tweets with Blue Check Marks?, ABA J. (Nov. 15, 2022, 12:39 PM), [] [].

[10] Id.

[11] Elon Musk reacted with laughing emojis to a tweet about the Nintendo America impersonator. @elonmusk, Twitter (Nov. 10, 2022, 3:20 AM), [] []. Although this may not be enough to prove intent, it may support the argument that Twitter played a role in misleading users.

[12] Setty, supra note 2.

[13] Frankel, supra note 8.

[14] Setty, supra note 2.

[15] See Lince, supra note 3.

[16] Alexandra Mogyoros, Elon Musk’s Twitter Blue Fiasco:  Governments Need to Better Regulate how Companies Use Trademarks, Conversation (Nov. 23, 2022, 3:11 PM), [] [].