The European Union released documents on July 12 indicating that Elon Musk’s X.com has been preliminarily found to be in breach of the Digital Services Act (DSA).

According to the EU’s preliminary findings, X violated the DSA on three separate counts and faces fines of “up to 6% of the total worldwide annual turnover of the provider.”

DSA breaches

Per documents published by the European Commission:

“Today, the Commission has informed X of its preliminary view that it is in breach of the Digital Services Act (DSA) in areas linked to dark patterns, advertising transparency and data access for researchers.”

This notice refers to an investigation opened in December 2023. Among the concerns raised at the time were X’s moderation practices, use of generative artificial intelligence, failure to provide required data to researchers and lack of transparency over its advertising practices

As of July 12, Musk and X are on official notice that they’ve been found in violation of the DSA. However, as EU Internal Market Commissioner Thierry Breton recently wrote on X, these findings aren’t final and “X has now the right of defence.”

In response, Musk posted, “How we know you’re real?” Whether this indicates that Musk doesn’t trust his own platform’s verification service (Breton’s profile on X has a badge indicating he’s a verified user) or Musk was simply trolling the politician is unclear.

Elon Musk’s X could face $200M EU fines over alleged DSA violations image 0 Source: Elon Musk

The complaints

Profile badges on X are at the heart of the EU’s first DSA complaint against Musk and X.

The July 12 notice accuses X of designing and operating its “blue check” verification system “in a way that does not correspond to industry practice and deceives users.”

According to the EU:

“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.”

The commission added that “there is evidence of motivated malicious actors abusing the ‘verified account’ to deceive users.”

The other complaints stem from X’s handling of advertising and researchers. The EU requires “very large online platforms” (VLOPs), like X, to meet transparency requirements with regard to how advertising is meted on the platform. X allegedly failed to meet these requirements. It also allegedly eschewed directives to provide researchers with access to public data through the X API, placing it further in violation of the DCA.

Musk and X now have the right to appeal. If, however, the company and its founder are ultimately declared in violation, they face fines in excess of $200 million dollars — 6% of the company’s turnover, which was approximately $3.4 billion for 2023.

The company would also face a period of supervision, while it brings its products and services in line with the law.

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