The European Union recently issued a warning to social media platform X regarding its blue checkmark verification system. The EU found that this system violates rules under the bloc’s Digital Services Act (DSA), deeming it deceptive for users and contrary to established industry practices. This raises concerns about transparency, advertising, and data access on the platform, marking the first time a company has been accused of breaching the DSA at the preliminary findings phase in the EU’s investigatory process.
The EU’s investigation revealed that X’s blue check system, which allows users to pay for verification, hinders the ability of users to determine the authenticity of accounts they interact with. Moreover, there is evidence that malicious actors are exploiting the system to deceive users intentionally. EU Competition Chief Margrethe Vestager highlighted key transparency areas where X falls short, citing the use of dark patterns to mislead users, inadequate ad repository, and blocking access to data for researchers. The EU emphasizes the importance of compliance with EU legislation, especially in terms of transparency, within the DSA framework.
If X fails to address the three grievances raised by the European Commission, the company could face formal action and fines of up to six percent of its global revenue. As a Very Large Online Platform (VLOP) under the DSA, X reaches over 45 million monthly active users in the EU, making it subject to stringent regulations. Despite being privately owned by Elon Musk, who acquired it for $44 billion in October 2022, the financial penalties for non-compliance remain unclear. The Commission’s multifaceted investigation into X, which began on December 18th, 2023, also encompasses issues related to illegal content dissemination and moderation practices, particularly in the context of the Israel-Hamas conflict.
The EU’s crackdown on X reflects a broader trend of increased enforcement against major tech companies. Separate DSA probes have been initiated to assess Meta’s (Facebook and Instagram) efforts in moderating political, deceptive, or illegal content, as well as safeguarding children on their platforms. These actions underscore the EU’s commitment to holding tech companies accountable for their practices and ensuring compliance with regulatory standards.
The European Union’s scrutiny of X’s verification system serves as a cautionary tale for other big tech companies. Compliance with transparency, advertising, and data access regulations under the DSA is essential to avoid potential fines and legal consequences. As the digital landscape continues to evolve, regulatory bodies will continue to monitor and enforce rules to protect users and maintain a fair and transparent online environment.
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