Elon Musk’s social media platform X may face potential hefty fines from the European Union due to various transparency issues including a controversial policy allowing users to purchase the once-exclusive “checkmark” for verified accounts.
On Friday (July 12), the European Commission, the EU’s executive arm, announced that X was “in breach” of the Digital Services Act (DSA), a new regulatory framework aimed at ensuring better oversight of online content. The act came into effect earlier this year.
The preliminary findings of an investigation, which began last year, highlighted concerns about a policy implemented after Musk’s $44 billion acquisition of the company two years ago. This policy permits anyone to pay for a blue checkmark, previously reserved for verified users.
“Since anyone can subscribe to obtain such a ‘verified’ status, it negatively affects users’ ability to make free and informed decisions about the authenticity of the accounts and the content they interact with,” said regulators in Brussels.
X will have an opportunity to defend itself, but if the EU’s findings are confirmed, the company could face fines of up to 6 per cent of its total worldwide turnover.
In 2021, Twitter, as it was then known, reported revenues of $5.1 billion.
Brussels also noted that X’s practices have not complied with the DSA in several areas, including prohibiting the use of “dark patterns” — deceptive techniques used to manipulate user behavior — and ensuring transparency in advertising and data access for researchers.
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“Back in the day, blue checks used to mean trustworthy sources of information,” Thierry Breton, the French commissioner for the internal market, was quoted as saying by the Financial Times. “Now with X, our preliminary view is that they deceive users and infringe the DSA. We also consider that X’s ads repository and conditions for data access by researchers are not in line with the DSA transparency requirements.”
“X has now the right of defence — but if our view is confirmed, we will impose fines and require significant changes,” Breton added.
(With inputs from agencies)