EU Fines X $140 Million for Misleading Blue Checkmarks

The European Union has levied a hefty fine of €120 million (approximately $140 million) against Elon Musk’s social media platform, X. This penalty stems from violations of the EU’s Digital Services Act (DSA), related to misleading practices regarding its blue checkmark system.

Background of the Fine

This ruling marks a significant moment as it is the first enforcement action taken under the DSA, a legislative framework aimed at mitigating illegal and harmful activities across online platforms. The investigation into X began in December 2023, focusing on various compliance issues, including the platform’s advertising transparency and user verification practices.

Key Violations Detected

• Misleading Blue Checkmarks: The blue checkmark system allows users to pay for verification, leading to confusion about account authenticity.
• Lack of Transparency: X failed to fulfill obligations regarding clear advertising practices.
• Restrictions on Researchers: The platform allegedly obstructed access to data required for research.

The European Commission emphasized that the blue checkmark system misleads users about account verification, which is contrary to DSA regulations. Henna Virkkunen, the EU’s tech chief, stated that such deceptive practices undermine user rights and accountability online.

Consequences and Next Steps for X

As a private company, X has significant stakes at hand, especially since Elon Musk acquired it for $44 billion in October 2022. It may be subjected to fines amounting to 6% of its global revenue for DSA infractions. While the current fine stands at €120 million, X is permitted to appeal the decision.

The company has a deadline of 60 working days to inform the EU about changes to the blue checkmark system. Additionally, it has 90 days to implement fixes related to other compliance failures. Failure to comply with these timelines could lead to further financial penalties.

Ongoing Investigations

The 2023 inquiry also includes a broader examination of X’s content moderation practices, particularly concerning the spread of illegal or harmful content. This ongoing investigation may lead to additional regulatory actions.

The enforcement of the DSA underlines the EU’s commitment to enhancing online safety and accountability for tech platforms, aiming to protect users and promote trust in digital environments.