EU fines X €120M over deceptive blue checkmark system

The European Commission has issued its first-ever penalty under the Digital Services Act (DSA), targeting Elon Musk’s social media platform, X. The regulatory body imposed a fine of €120 million (approximately $140 million) following an investigation into the platform’s operational practices, specifically highlighting the “deceptive” nature of its verification system.

The Blue Check Controversy

Central to the Commission’s decision is the evolution of the platform’s blue checkmark. Historically, the symbol served as a marker of authenticity for public figures, journalists, and government officials. Under the current X Premium model, however, the badge is available to any user willing to pay a subscription fee, provided they meet basic requirements like having a profile photo and a linked phone number.

The European regulator argues that this design violates the DSA’s mandate against deceptive practices. According to the official statement, the current implementation makes it difficult for users to distinguish authentic accounts from imposters, thereby increasing risks related to scams and manipulation.

Beyond Verification: Ad Transparency and Data Access

While the checkmark system triggered the primary public outcry, the Commission’s ruling also identified two other significant areas of non-compliance:

• Advertising Repository: The platform failed to provide a transparent and accessible ad library. The Commission noted excessive delays in processing requests and a lack of critical information, such as ad topics and funding sources.
• Research Barriers: The DSA requires platforms to grant researchers access to public data to study systemic risks. The investigation concluded that X has created unnecessary obstacles, effectively preventing independent scrutiny.

Henna Virkkunen, executive vice-president for Tech Sovereignty, Security and Democracy at the European Commission, emphasized that these practices are incompatible with EU standards. “Deceiving users with blue checkmarks, obscuring information on ads, and shutting out researchers have no place online in the EU,” Virkkunen stated.

Next Steps for X

The company now faces strict deadlines to rectify these issues. X has 60 days to present a plan for addressing the concerns regarding the blue checkmark design. Additionally, the platform has 90 days to develop an action plan for resolving the deficiencies in its advertising transparency and public data access protocols.

This enforcement action concludes a two-year investigation that initially focused on broader concerns, including risk management and content moderation. As this is the first penalty of its kind under the DSA, it sets a significant precedent for digital platforms operating within the bloc, which can face fines of up to 6% of their total global annual turnover for proven breaches.