Twitter stiffens software provider with $8 million remaining on contract, lawsuit says

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A lawsuit says Twitter failed to pay a $1,092,000 bill under a software deal that doesn't expire until the end of 2024, and that the company ran by Elon Musk apparently intends to impose an additional $7 million in payments on the supplier.

Imply Data, Inc. sued Twitter in California Superior Court, San Francisco County, alleging breach of contract. The lawsuit was filed Tuesday (see Complaint) and reported by Bloomberg today.

“For more than four years, Imply licensed its proprietary software to Twitter, and Twitter paid Imply more than $10 million,” the lawsuit states. "Twitter has always been very pleased with Imply's product and its associated maintenance and support services, so in mid-2021 the parties extended the term of their software license and service agreement for three additional years from October 1, 2021 to September July 30, 2024."

In May, a few weeks after Musk reached an agreement to buy Twitter, the company informed Imply Data that it would not renew the contract but "acknowledged that the license agreement 'will continue in full effect' until 'at the end of his term on September 30, 2024,' the lawsuit states.

Payments stopped after Musk takeover

Twitter continued to make quarterly payments on the contract until Musk finalized the purchase in late October. "However, shortly after the closing of Musk's purchase of Twitter, Twitter declined to pay the unpaid quarterly bill, which was due November 30, 2022, and Twitter declined any obligation to pay Imply's future bills. , despite the unambiguous language of the software license and a service agreement requiring Twitter to do so," the lawsuit stated.

Imply creates a database based on open source Apache Druid software as well as Druid cluster management and monitoring products.

The New York Times reported on November 22 that Twitter was constraining certain vendors. Imply's complaint notes media coverage of Twitter refusing to pay sellers and says, "This lawsuit involves such a blatant case."

Imply uploaded the $1,092,000 invoice to Twitter's Supplier Portal, and the invoice was approved by Twitter on October 5, according to the lawsuit. “On November 28, 2022, when Imply accessed the Vendor Portal, Imply learned that Twitter had removed the invoice and closed the license agreement,” the lawsuit stated.

“We will no longer pay Imply”

Imply says Twitter "has also uploaded an internal messaging channel to the Provider Portal to support these actions." The lawsuit said that this email chain included a message from Martin O'Neill, head of global strategic sourcing at Twitter, who said: "A warning that we will no longer be paying Imply. If we can flag them in our system AP not to forward any of their invoices for approval, that would be great, thank you!"

The Twitter executive who received the email, Kristena Bravo, "forwarded this email to other Twitter employees and wrote: 'Can you please undo all Imply invoices currently pending in Oracle (if applicable) and disable the provider using the email below as evidence?", the lawsuit stated.

After reviewing these emails, Imply asked Twitter for the status of the payment due on November 30. "Twitter's Accounts Payable Department informed Imply that the invoice had been 'cancelled' and that if Imply had any concerns, Imply should "contact [Imply's] Twitter Business Partner. Imply reached out to Twitter to discuss canceling the invoice; however, Twitter has yet to respond in substance to this action," the lawsuit said.

Imply seeks damages for breach of contract. “Imply anticipates that Twitter's breach will continue, with the amount in default increasing each quarter until the end of the term of the license agreement…Twitter's breach has and will damage Imply by an amount that will be proven at trial, but that will likely be more than $8 million,” Imply told the court.

Dispute over the possibility for Twitter to terminate the contract

The lawsuit also alleges a breach of the covenant of good faith and fair dealing...