Elon Musk X could face a $200M fine for DSA violations.
The European Union released documents on July 12 that indicated it found Elon Musk's X.com in violation of the Digital Services Act (DSA).
According to the EU's preliminary findings, X breached the DSA on three separate charges and faces fines of “up to 6% of the supplier's total worldwide annual revenue”.
Violations of the DSA
In each of the documents published by the European Commission:
“Today, the Commission announced that the X preview breached the Digital Services Act (DSA) in areas related to dark patterns, advertising transparency and access to information for researchers.”
This announcement addresses an investigation that opened in December 2023. Among the concerns raised at the time were X's regulatory practices, use of generative artificial intelligence, researchers' failure to provide relevant information, and a lack of transparency in the reporting process.
As of July 12, Musk and X are on public notice of DSA violations. However, as EU Internal Market Commissioner Thierry Breton recently wrote on X, these findings are not final and “X now has a right of defence.
In response, Musk asked, “How do we know you're real?” He posted. It's unclear whether this indicates Musk doesn't trust his own platform's authentication service (Breton's profile has a badge indicating he's a verified user on X), or whether Musk is simply pulling a politician.
Complaints
Profile badges on X are at the heart of the EU's first DSA complaint against Musk and X.
In a July 12 announcement, X accused the “Blue Check” verification system of being “designed and operated in a manner inconsistent with industry practice and misleading to users.”
According to the European Union:
“Because anyone can sign up for such ‘verified' status, it negatively impacts users' ability to make free and informed decisions about the authenticity of their accounts and the content they interact with.”
The commission added, “There is evidence that actual actors are misusing the ‘verified account' to defraud users.”
The other complaints are X's advertising and treatment of researchers. The EU requires “very large online platforms” (VLOPs) such as X to meet transparency requirements for how advertising is served on the platform. X is said to have failed to meet these requirements. It also violated the guidelines for researchers to access public data through the X API, making the DCA violation even more so.
Musk and X now have the right to appeal. However, if the company and its founder are found in violation, they face fines of more than $200 million — 6 percent of the company's turnover, which was estimated to be $3.4 billion by 2023.
A monitoring period awaits the company as it brings its products and services into compliance with the law.
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