EU Accuses Elon Musk’s X of Deceptive Practices Over blue ‘Checkmark’, Faces Sanction

European regulators have accused Elon Musk’s X of deceiving its users with the paid blue checkmark thereby breaching its Digital Services Act (DSA).

The regulators said the fact that anyone can buy the blue checkmark on X defeats the purpose of the badge which was meant to be a mark of verification.

According to a statement released on Friday by the European Commission, X has breached the DSA in areas linked to dark patterns, advertising transparency, and data access for researchers.

While noting that the breach was detected in its preliminary investigation, the Commission said X may be fined up to 6% of its total worldwide annual turnover, if the breach is confirmed.

Grounds of breach
Presenting its preliminary findings based on internal company documents, interviews with experts, as well as cooperation with national Digital Services Coordinators, the Commission said:

“First, X designs and operates its interface for the “verified accounts” with the “Blue checkmark” in a way that does not correspond to industry practice and deceives users.

“Since anyone can subscribe to obtain such a “verified” status, it negatively affects users’ ability to make free and informed decisions about the authenticity of the accounts and the content they interact with. There is evidence of motivated malicious actors abusing the “verified account” to deceive users.

“Second, X does not comply with the required transparency on advertising, as it does not provide a searchable and reliable advertisement repository, but instead put in place design features and access barriers that make the repository unfit for its transparency purpose towards users.

“In particular, the design does not allow for the required supervision and research into emerging risks brought about by the distribution of advertising online.

On the third count, the Commission said X failed to provide access to its public data to researchers in line with the conditions set out in the DSA. In particular, it said X prohibited eligible researchers from independently accessing its public data, such as by scraping, as stated in its terms of service.

While noting that it had sent the preliminary findings to X, the EU regulators said the company now can exercise its rights of defence by examining the documents in the Commission’s investigation file and by replying in writing to its preliminary findings.

Backstory
X, formerly known as Twitter, was designated as a Very Large Online Platform (VLOP) on 25 April 2023 under the EU’s Digital Services Act, following its declaration of reaching more than 45 million monthly active users in the EU.

On 18 December 2023, the Commission opened formal proceedings to assess whether X may have breached the Digital Services Act in areas linked to the dissemination of illegal content and the effectiveness of the measures taken to combat information manipulation, for which the investigation continues, as well as dark patterns, advertising transparency and data access for researchers, which are subject of the preliminary findings adopted today.

The Commission has also put in place a whistleblower tool, allowing employees and other people with knowledge to contact the Commission in an anonymous way to contribute to the Commission’s monitoring of compliance by designated VLOPs/VLOSEs.
The Commission has also opened formal proceedings against TikTok in February and April 2024, AliExpress in March 2024, and Meta in April and May 2024.