It's not complicated. If a company knowingly misrepresents their user activity then it's fraud. Knowing that a significant portion of your user activity is bots but then claiming you don't have bots would be fraud.
> If a company knowingly misrepresents their user activity then it's fraud.
Demonstrating this in court might get pretty complicated, though. Legal terms often have a way of obscuring the complexity of real life (which is understandable, of course).
I'm guessing the number of well-known startups who have committed fraud by "faking it until they make it" is somewhere between 1 and N. What that number is might well be subjective to the judge or jury rendering a verdict. Unfortunately, lack of serious insight into this might also be evidence that "faking it until you make it" works even if it's fraud, so long as you can spin revenue that investors demand out of it eventually.
Edit: forgive my claiming lack of evidence = evidence; i'm just tired. I think my point that it's kind of unknowable, and this might prompt people to accept it as proof positive (even irrationally). I hope my comment can be received in good faith
Really? Because just about every dating site, every forum, every ... has been doing this for decades. If this were true, where are the many court cases where management loses against investors? Because I don't see them. The only one I see is the whole shitshow around Elon Musk buying Twitter.
Also a bunch of the bots are by nation states. In that case I would expect that at least some courts would not cooperate with any such fraud case (Russia, India, China, I don't know in Europe but I doubt there aren't a few examples ... and maybe US. Probably at least a few states). Best of luck to make anything stick if the courts to not cooperate.
