EU fines Elon Musks X $140 million for lack of transparency
In a significant move that underscores the European Union’s commitment to digital accountability, the European Commission has imposed a €120 million fine (approximately $140 million) on Elon Musk’s social media platform, X, for violating transparency requirements outlined in the Digital Services Act (DSA). This groundbreaking fine marks the first enforcement action under the DSA, a regulation intended to enhance online safety and transparency across digital platforms. The ruling specifically highlights X’s “deceptive design” concerning its paid blue checkmark system, which the Commission argues misleads users regarding account authenticity, complicating the verification process and increasing the risk of scams.
The DSA prohibits platforms from claiming user verification when no such verification occurs, and the Commission’s findings indicate that X’s current model contravenes these regulations. This issue is compounded by X’s inadequate transparency regarding its advertising practices. The Commission noted that the platform’s ad repository lacks essential information about the advertisements being displayed, including the identities of the sponsors, which inhibits both public scrutiny and academic research. Furthermore, X’s failure to grant researchers access to public data, a requirement under the DSA, has raised concerns about the platform’s accountability in addressing misinformation and harmful content. Henna Virkkunen, the European Commission’s executive vice-president for Tech Sovereignty, Security, and Democracy, emphasized that deceptive practices and lack of transparency have no place in the EU’s digital landscape.
Following this ruling, X has been given a timeline to rectify its practices: it must submit plans to address the blue checkmark issue within 60 business days and tackle the transparency concerns related to its ad repository and public data access within 90 days. Failure to comply could result in additional fines, further underscoring the seriousness of the Commission’s commitment to enforcing the DSA. This landmark decision not only sets a precedent for future regulatory actions but also serves as a stark reminder to digital platforms about the importance of transparency and user protection in the rapidly evolving online environment.
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The European Commission on Friday issued a landmark €120 million fine to Elon Musk-owned
X
for
breaching transparency requirements
of the Digital Services Act (DSA).
The fine, the equivalent of about $140 million and the first issued under the European Union’s DSA, is linked to the “deceptive design of its ‘blue checkmark’, the lack of transparency of its advertising repository, and the failure to provide access to public data for researchers,”
the EU release states
.
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The ”
blue checkmark
” is front-and-center in the ruling, stating that the once-free, now-paid checkmark deceives users and violates the DSA requirement to prohibit deceptive design practices. The blue checkmark now makes it difficult to verify authentic accounts and makes it easier for users to be scammed, according to the ruling.
“While the DSA does not mandate user verification, it clearly prohibits online platforms from falsely claiming that users have been verified, when no such verification took place,” the ruling states.
The ruling also cites a lack of transparency within X’s ad repository, stating that it has limited information about the content of advertisements and who is paying for them, which makes it difficult for researchers and the public to scrutinize.
X also failed to provide researchers access to public data as required by DSA.
The ruling follows a nearly
two-year investigation
launched in December 2023 to determine whether X violated DSA requirements related to the spread of illegal content and the effectiveness of its efforts to combat misinformation, the release states.
“Deceiving users with blue checkmarks, obscuring information on ads and shutting out researchers have no place online in the EU,” said Henna Virkkunen, executive vice-president for European Commission for Tech Sovereignty, Security and Democracy.
X now has 60 business days to bring forward plans to address its use of blue checkmarks, 90 days to address EU concerns regarding its ad repository and public data access to researchers or face further fines, according to the ruling.
