Twitter threatens lawsuit against Meta over newly introduced Threads; BofA sees little impact

Twitter has issued a legal threat against Meta Platforms (NASDAQ:), the parent company of Instagram, over its newly introduced text-based platform called Threads.

Twitter accuses Meta of unlawfully poaching former Twitter employees to create a “copycat” application and misappropriating Twitter’s trade secrets and intellectual property.

In a letter sent by Twitter’s lawyer, Alex Spiro, to Meta CEO Mark Zuckerberg, which was obtained exclusively by Semafor, Twitter demands that Meta immediately cease using any Twitter trade secrets and confidential information. Twitter asserts its right to enforce intellectual property rights and warns of potential legal action if Meta does not comply.

Spiro claimed that Meta had recruited numerous ex-Twitter employees who possessed and still have access to Twitter’s trade secrets and confidential information. Additionally, he asserted that Meta had tasked these employees with developing the “Threads” app, intending for them to utilize Twitter’s trade secrets and intellectual property in order to expedite the creation of Meta’s competing app.

In response, a source from Meta denies the allegations, stating that none of the employees on the Threads engineering team are former Twitter employees.

Following the news, Elon Musk also weighed in, tweeting “competition is fine, cheating is not.”

Bank of America analysts said that Meta has a history of successfully replicating competitor apps without serious legal challenges.

“Until further facts surrounding the claim emerge or further steps are taken by either party, we anticipate that the current threat of legal action will have limited immediate impact on the ramp of the app. However, if Threads was to grow to a size similar to, or larger than, Twitter, we could see possibility of antitrust issues with cross platform data use,” the analysts said in a note.

(Additional reporting by Senad Karaahmetovic)