Elon Musk’s social media platform X has received a €120m (£105m) fine from the European Commission after being found in violation of new EU digital laws. This high-profile ruling is expected to cause friction with US billionaire Donald Trump.
The violations include what the EU described as “misleading” blue checkmark verification badges given to users, as well as insufficient transparency in advertising practices, which have been under investigation for two years.
The EU’s regulations mandate that tech companies maintain public lists of advertisers to ensure their structures prevent illegal fraud, false advertising, and organized political campaign manipulations.
Additionally, the EU found that X had not granted sufficient access to public data typically available to researchers observing critical topics like political content.
This significant ruling marks the conclusion of an inquiry that started two years ago.
On Friday, the commission announced that X had failed to meet its transparency responsibilities under the Digital Services Act (DSA), marking the first judgment against the platform since the enforcement of regulations on social media and major tech platforms began in 2023.
In December 2023, the Commission began formal proceedings to determine if X violated the DSA regarding illegal content distribution and the effectiveness of measures to address information manipulation, with the investigation ongoing.
Under the DSA, X could face fines of up to 6% of its global revenue, which is projected to be between $2.5bn and $2.7bn (£1.9bn and £2bn) in 2024.
There are still three additional investigations underway, two of which examine alterations to content and algorithms implemented after Musk’s acquisition of Twitter in October 2022, when it was rebranded to “X.”
The commission is also exploring whether laws against inciting violence or terrorism have been violated.
Moreover, the company is evaluating a system that would permit users to report and flag content they suspect to be illegal.
The fine, divided into three components, includes a €45 million penalty for the introduction of a blue “authentication” checkmark that users could purchase, which obscured the reliability of account holders, according to senior officials.
Prior to Musk’s takeover, blue checkmarks were exclusively awarded to verified account holders, including politicians, celebrities, public bodies, and established journalists from mainstream and emerging media like bloggers and YouTubers. Following the acquisition, users subscribing to X Premium can now obtain blue check status.
“With the DSA’s first compliance decision, we aim to hold Company X accountable for infringing on users’ rights and evading responsibility,” stated Hena Virkunen, executive vice president of the European Commission overseeing technology regulation.
“Deceiving users with blue checkmarks, obscuring information in advertisements, or restricting access for researchers is unacceptable online within the EU.”
X was also fined €35 million for advertising violations and €40 million for failures related to data access for researchers.
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This ruling could provoke backlash from the Trump administration. Recently, US Commerce Secretary Howard Lutnick stated that the EU might have to explore technical regulations to cut steel tariffs by 50%.
His statement was labeled “blackmail” by Spanish commissioner Teresa Rivera.
EU officials asserted that the ruling stands independent of allegations brought forth by a US delegation meeting with trade ministers in Brussels last week. The EU emphasized its right to regulate US tech firms, noting that 25 companies, including non-US entities like TikTok, must adhere to the DSA.
Musk, who is on the path to becoming the first trillionaire, has 90 days to draft an “action plan” to address the fine, though he remains free to contest the EU’s decision, similar to appeals made by other corporations like Apple to the European Court of Justice.
In contrast, the EU announced it had secured a commitment from TikTok to establish an advertising repository, addressing transparency concerns raised with the European Commission earlier this year.
The DSA mandates that platforms maintain accessible and searchable ad repositories to enable researchers and civil society representatives to detect fraudulent, illegal, or age-inappropriate advertisements.
Government officials indicated that the emerging issue of fraudulent political ads and ads featuring impersonated celebrities cannot be adequately analyzed without compliance from social media companies.
Mr. X has been contacted for commentary. The EU confirmed that the company has been made aware of the decision.
Source: www.theguardian.com
