X could face fines of up to 6% of its total global annual turnover due to violations under the European Union’s Digital Services Act (DSA). This penalty is designed to enforce compliance with EU regulations that ensure transparency in advertising, accessibility of data for researchers, and proper use of verification features like the “blue checkmark.”
Blue checkmarks have long been a controversial issue, especially after they became a paid feature. Now, the EU says X allegedly misuses its “blue checkmark” verification feature. Traditionally, this feature is used to authenticate accounts of public interest or notable figures. However, X reportedly allows nearly anyone to obtain this verification status, regardless of their actual status or identity.
How we know you’re real? 🧐
— Elon Musk (@elonmusk) July 12, 2024
Although Elon Musk does not seem to take the accusations seriously yet, the EU accused X of leading to confusion among users, who may mistakenly believe verified accounts are more trustworthy or official than they actually are. Malicious actors have exploited this system to deceive users, exacerbating the issue of misinformation and trust on the platform.
Advertising transparency
X is accused of failing to meet the required standards for advertising transparency as mandated by the DSA.
The DSA requires platforms to maintain a reliable and searchable repository of advertisements. This transparency is crucial for users to understand who is behind the ads they see and to assess the authenticity and credibility of the advertised content.
Without transparent advertising practices, users may be exposed to misleading or deceptive ads without adequate means to verify their legitimacy, undermining trust in the platform.
Data access for researchers
X allegedly restricts access to its data for independent researchers, contrary to the DSA’s provisions.
The DSA stipulates that large online platforms must provide access to their application programming interfaces (APIs) for research purposes. This access is essential for researchers to study and analyze societal impacts such as misinformation and public safety.
The Commission’s findings suggest that X’s practices discourage or hinder researchers from accessing its API, thereby limiting critical insights into the platform’s influence and behavior.
Potential consequences
If the allegations are substantiated and X is found to be in non-compliance with the DSA:
- Financial Penalties: X could face fines of up to 6% of its total global annual turnover. Although we don’t know this year’s turnover yet, if we use the 2022 stats ($4.4 billion in revenue in 2022), then a 6% fine would amount to $264 million.
- Additional Sanctions: The European Commission has the authority to impose periodic penalty payments and enhanced supervision to ensure future compliance.
- Industry Implications: The outcome will not only impact X but also set precedents for how other large platforms are regulated in the EU and potentially influence global digital governance standards.
All images are generated by Eray Eliaçık/Bing
