in its first dsa penalty, eu fines x €120m for ‘deceptive’ blue check verification system

European Commission Fines X Under Digital Services Act

The European Commission (EC) has levied its inaugural penalty under the Digital Services Act (DSA), targeting Elon Musk’s platform, X.

Concerns Regarding the Blue Checkmark System

The EC’s primary objection centers on X’s practice of permitting the purchase of “blue checkmarks.” These marks historically signified verified user identities.

Describing the current blue checkmark implementation as “deceptive,” the EU’s executive body issued a fine of €120 million (approximately $140 million) to X on Friday. This action stems from alleged violations of transparency obligations as outlined in the DSA.

Additional Violations Identified

Further breaches identified by the Commission include insufficient transparency within X’s advertising repository and restricted access to public data for researchers.

Evolution of the Verification System

Prior to Elon Musk’s acquisition, Twitter employed a verification process for journalists, celebrities, politicians, and prominent public figures, confirming their stated identities.

This policy was altered in 2023 under Musk’s leadership. Currently, a “verified” blue checkmark simply denotes a subscription to X Premium, alongside meeting basic eligibility requirements such as a profile picture, display name, and linked phone number.

Commission’s Statement on Deceptive Practices

“X’s utilization of the ‘blue checkmark’ for ‘verified accounts’ misleads users,” the Commission stated. “This contravenes the DSA’s requirement for online platforms to prohibit deceptive design practices. The current system allows anyone to acquire ‘verified’ status through payment, without substantial identity verification, hindering users’ ability to assess the authenticity of accounts and content.”

The Commission further emphasized that this system increases vulnerability to scams, impersonation, fraud, and manipulative tactics.

Advertising Repository Deficiencies

The regulator also determined that X’s advertising repository fails to meet DSA standards for transparency and accessibility. The company is accused of imposing unreasonable delays when processing access requests.

Critically, the repository lacks essential information regarding advertisements, including content, topic, and the identity of the advertiser.

“This impedes independent scrutiny of potential risks associated with online advertising by researchers and the public,” the Commission explained.

Restricted Access to Public Data

Another area of concern is access to public data. The DSA mandates that large online platforms provide researchers with access to public data for the study of systemic risks.

The EC’s investigation revealed that X does not adequately facilitate independent researcher access to this data.

“Furthermore, X’s procedures for researcher access impose unnecessary obstacles, effectively hindering research into several systemic risks within the European Union,” the EC noted.

Investigation Timeline and Background

This decision follows a two-year investigation initiated by the EC, focusing on suspected breaches related to risk management, content moderation, deceptive design patterns, advertising transparency, and data access for researchers.

Official Response from the European Commission

“Deceiving users with blue checkmarks, obscuring advertising information, and restricting researcher access are unacceptable practices within the EU’s online environment,” stated Henna Virkkunen, executive vice-president for Tech Sovereignty, Security and Democracy at the European Commission.

Required Actions and Potential Penalties

X has been given 60 days to detail its plans for addressing the blue checkmark issue, and 90 days to submit an action plan for rectifying the breaches concerning advertising and public data transparency and accessibility.

Violations of the DSA can result in substantial penalties, including fines of up to 6% of the company’s global annual turnover.