Platform X, owned by Elon Musk, faces a significant fine from the European Union (EU) due to several transparency issues on the social network, including the company’s policy of allowing users to purchase verification status marked by a blue tick.
This development was reported by the Financial Times.
The European Commission has stated that Platform X has violated the EU’s landmark Digital Services Act (DSA), which came into effect this year to enhance online content regulation.
Preliminary findings from an EU investigation indicated that the decision, made after Musk’s $44 billion acquisition of the company two years ago, to allow anyone to pay for the blue tick, could deceive millions of users.
“Allowing anyone to subscribe to this ‘verified’ status undermines users’ ability to make informed and free decisions regarding the authenticity of accounts and the content they interact with,” regulators in Brussels said.
Platform X has the opportunity to defend itself, but if the EU’s findings are confirmed, the company could face fines of up to 6% of its total global turnover.
Brussels also noted that X’s practices do not comply with DSA requirements in several areas, such as the prohibition of “dark patterns” – deceptive methods used to manipulate user behaviour, transparency in advertising, and providing proper access to data for researchers.
“Previously, blue ticks signified reliable sources of information. Now, concerning X, we preliminarily believe that they are misleading users and violating the DSA. X has the right to defend itself, but if our findings hold, we will impose fines and demand significant changes,” said Thierry Breton, the French Commissioner for Internal Market.
Regulatory Concerns and Potential Repercussions
The investigation into Platform X’s practices comes amid growing scrutiny of how social media platforms handle verification and transparency. The EU’s DSA aims to create a safer digital space where the fundamental rights of users are protected, and ensuring the authenticity of information is a key component of this legislation.
The ability for users to purchase verification has raised concerns about misinformation and trust. Traditionally, the blue tick was a marker of credibility, indicating that an account belonged to a notable public figure, celebrity, or organisation.
The shift to a pay-for-verification model has, according to the EU, compromised this credibility, potentially allowing malicious actors to present themselves as legitimate sources of information.
EU’s Digital Services Act
The Digital Services Act is one of the most significant pieces of digital regulation enacted by the EU. It aims to set clear responsibilities for digital services, including social media platforms, to limit the spread of illegal content and misinformation. Key elements of the DSA include:
- Accountability and Transparency: Digital platforms must be transparent about their operations, including how they moderate content and manage user data.
- Consumer Protection: Safeguards against deceptive practices and ensuring that users have clear and truthful information.
- Access to Data for Research: Providing authorised researchers access to platform data to study and understand the impact of digital services on society.
Impact on Platform X
If the EU’s findings against Platform X are confirmed, the financial penalties could be substantial. Fines amounting to 6% of the company’s global turnover could reach billions, depending on X’s revenue figures. Moreover, compliance with the DSA would necessitate significant changes to X’s operations, potentially altering its business model and user experience.
For Musk and Platform X, the stakes are high. The decision to monetise verification was part of broader efforts to increase revenue, but the backlash and regulatory scrutiny highlight the challenges of balancing commercial objectives with regulatory compliance and user trust.
Next Steps
Platform X is expected to respond to the EU’s preliminary findings, presenting its defence against the allegations. The outcome of this regulatory challenge will have far-reaching implications not only for Platform X but also for the broader social media landscape, setting precedents for how digital platforms are regulated and held accountable in the future.
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