EU says Musk’s X violates transparency rules, misleads users

A preliminary investigation by the European Commission, the European Union’s executive arm, alleged that Elon Musk’s social media platform X, formerly known as Twitter, violated the bloc’s Digital Services Act, according to a Friday release. X misleads users, fails to provide an adequate ad database, and blocks researchers from accessing data, wrote Margrethe Vestager, executive vice-president for A Europe Fit for the Digital Age, a branch of the European Commission.

The bloc’s statement alleged that X deceives users by allowing anyone who buys an X subscription to receive a verified blue checkmark. The practice negatively affects how users make free decisions about the authenticity of an account and its content, the commission said. Evidence showed malicious actors abusing the verified account status to deceive users, it added.

The bloc also claimed that X did not comply with advertising transparency requirements for a database of all the ads it runs to be published. These databases publicly share who paid for an ad and what target audience it intended to reach. Design features and access barriers make X’s current ad database hinder transparency to users and thwart research into the emerging risks of online advertising, the EU said.

X also violates bloc rules by not allowing researchers to independently access public data, the commission alleged. When X does allow researchers to use data, the process of obtaining it seemingly dissuades researchers from carrying out their projects if they don’t pay disproportionally high fees, the statement continued.

If the commission confirms the now preliminary views, Musk would face a fee totaling 6 percent of X’s annual global income. The company generated about $3.4 billion in global income last year according to Investopedia, which would mean a fine of just over $200 million dollars.

How has Musk responded? The European Commission fined X because the company rejected a secret and illegal censorship bargain, Musk alleged hours after the EU’s accusations went public. The commission offered not to fine X if the company started censoring users without their knowledge, which X refused, Musk said.

Dig deeper: Read my report on the EU Commission threatening Meta with a fine for violating the bloc’s digital rules.