The European Union has taken a landmark enforcement action against Elon Musk's social media giant, X, formerly known as Twitter. The European Commission announced on Friday, December 5, that it is imposing a substantial fine of 120 million euros (approximately $140 million) for multiple violations of the bloc's digital transparency regulations.
First Major Ruling Under New Digital Law
This penalty marks a significant moment as it is the first non-compliance decision issued under the Digital Services Act (DSA). The DSA, which came into force in 2022, is a sweeping legislation designed to regulate large online platforms operating within the 27-nation bloc. The fine against X is the latest in a series of regulatory challenges faced by major US tech companies in Europe.
The Commission's action follows a two-year investigation into X's practices. Regulators identified several key areas where the platform failed to meet its legal obligations.
Key Violations Cited by EU Regulators
The Commission pinpointed three primary issues. Firstly, it criticised the "deceptive design of its 'blue checkmark'" system. After Musk's takeover, the platform changed the meaning of the verification badge, allowing anyone to purchase it, which regulators argue misleads users about the authenticity of accounts.
Secondly, X was found lacking in transparency regarding its advertising repository. The DSA requires large platforms to maintain a publicly accessible database with details about the ads they run, which X did not adequately provide.
Thirdly, the platform failed to provide sufficient access to public data for researchers. This access is crucial for independent scrutiny of platform dynamics, such as the spread of disinformation.
"Deceiving users with blue checkmarks, obscuring information on ads and shutting out researchers have no place online in the EU," stated Henna Virkkunen, the Commission's executive vice president for tech sovereignty, security and democracy. She added that this decision holds X responsible for "undermining users' rights and evading accountability."
Strict Deadlines and Potential Further Penalties
The ruling comes with strict deadlines for X to rectify its practices. The company now has 60 days to submit a detailed plan explaining how it will fix the issues with its blue checkmark system. It has 90 days to present a plan for resolving the problems with its advertising repository and for granting researchers proper access to public data.
The Commission issued a stern warning that "failure to comply with the non-compliance decision may lead to periodic penalty payments." While the exact nature of these additional fines was not specified, it indicates that the EU is prepared to take further financial action if X does not fall in line.
This regulatory move against X is part of a broader crackdown. Notably, it was announced just a day after the Commission revealed it would investigate whether Meta, the parent company of Facebook and WhatsApp, violated antitrust rules concerning AI providers' access to WhatsApp's data.
The substantial fine underscores the EU's commitment to enforcing its digital rulebook and sets a precedent for how the DSA will be applied to other major tech platforms in the future.
