EU fines Elon Musk's X $140 million for lack of transparency

The European Commission on Friday issued a landmark €120 million fine to Elon Musk-owned X for breaching transparency requirements of the Digital Services Act (DSA).

The fine, the equivalent of about $140 million and the first issued under the European Union's DSA, is linked to the "deceptive design of its ‘blue checkmark', the lack of transparency of its advertising repository, and the failure to provide access to public data for researchers," the EU release states.

The "blue checkmark" is front-and-center in the ruling, stating that the once-free, now-paid checkmark deceives users and violates the DSA requirement to prohibit deceptive design practices. The blue checkmark now makes it difficult to verify authentic accounts and makes it easier for users to be scammed, according to the ruling.

"While the DSA does not mandate user verification, it clearly prohibits online platforms from falsely claiming that users have been verified, when no such verification took place," the ruling states.

The ruling also cites a lack of transparency within X's ad repository, stating that it has limited information about the content of advertisements and who is paying for them, which makes it difficult for researchers and the public to scrutinize.

X also failed to provide researchers access to public data as required by DSA.

The ruling follows a nearly two-year investigation launched in December 2023 to determine whether X violated DSA requirements related to the spread of illegal content and the effectiveness of its efforts to combat misinformation, the release states.

"Deceiving users with blue checkmarks, obscuring information on ads and shutting out researchers have no place online in the EU," said Henna Virkkunen, executive vice-president for European Commission for Tech Sovereignty, Security and Democracy.

X now has 60 business days to bring forward plans to address its use of blue checkmarks, 90 days to address EU concerns regarding its ad repository and public data access to researchers or face further fines, according to the ruling.