Elon Musk’s social media platform, X, is in hot water with the European Union (EU) after being slapped with preliminary findings of breaching the Digital Services Act (DSA). This could result in hefty fines exceeding $200 million for the company.
EU Accuses X of “Deceptive” Practices
The crux of the issue lies in X’s verification system, particularly the coveted “blue check” badge. The EU alleges this system is designed in a way that “deceives users” as anyone can seemingly obtain “verified” status. This lack of transparency hinders users’ ability to discern the authenticity of accounts and content. The EU further claims evidence exists of malicious actors exploiting X’s verification system to mislead users.
Transparency Issues Extend to Advertising and Research Access
Beyond verification, the EU takes aim at X’s advertising practices. As a “very large online platform” (VLOP) under the DSA, X is obligated to provide transparency regarding how advertisements are displayed. However, the EU contends that X has failed to meet these transparency requirements.
Adding another layer to the complaint, X is accused of neglecting directives to provide researchers with access to public data via the platform’s API (Application Programming Interface). This alleged refusal constitutes a further violation of the DSA.
Musk’s Right to Defend and Potential Consequences
While the findings are preliminary, both X and Musk have the right to appeal. If the violations are upheld, however, X faces a hefty fine of up to 6% of its global annual turnover. Considering X’s 2023 turnover was roughly $3.4 billion, the potential fine could exceed $200 million.
Furthermore, X would likely be placed under EU supervision until it demonstrably brings its practices into compliance with the DSA. This could involve significant changes to verification systems, advertising transparency measures, and researcher data access protocols.
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Musk’s Cryptic Response Adds Intrigue
Adding a layer of intrigue to the situation, Musk’s response to the EU’s notice on X was a simple question: “How we know you’re real?” It remains unclear whether this was a genuine inquiry about the legitimacy of the EU’s message on his own platform (Thierry Breton’s X profile has a verified badge) or a playful jab at the politician.
The coming months will be crucial for X and Musk. Their response to the EU’s accusations and the potential outcome of the appeal process will determine whether the platform faces significant financial penalties and the need for substantial operational changes.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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