Elon Musk's X threatens millions in fines
With the purchase of Twitter by Elon Musk, not only does the name of the online platform change. In the EU Commission's view, a shift goes against existing law. For the Tech Billionaire, this could be costly.
According to preliminary estimates by the EU Commission, US entrepreneur Elon Musk's online platform X violates EU law with his platform. The company faces potential hefty fines, as the Brussels authority announced. The design of X, according to the Commission, can mislead users, specifically X (formerly Twitter) is accused of allowing any user to have a "verified" account, making it difficult for users to distinguish between real and fake accounts.
The EU Commission has for the first time made public preliminary investigation results regarding a new EU law on digital services (DSA). X can now respond to the allegations. The company was initially unreachable for comment. The Commission emphasizes that these preliminary results are not final.
Checkmarks for Subscribers
At Twitter, the white-blue checkmark symbols for verification were previously given to prominent figures, politicians, and public figures after review by the company. This is also common practice among other online services. Musk introduced instead that all subscribers receive checkmarks, which look like the old ones. There were numerous complaints immediately after the switch, as false accounts of companies and prominent figures suddenly appeared authentic.
The Commission noted that malicious actors were reportedly using these allegedly verified accounts on X to deceive other users. Online platforms must comply with stricter rules under the DSA since some time. This includes, among other things, more transparency in advertising and granting researchers access to certain data. Both points, according to the EU Commission's preliminary assessment, violate the DSA. Investigations against other major online platforms based on the DSA are also ongoing.
Current Revenue of X Unclear
If the EU Commission's preliminary assessment is confirmed, the EU Commission could impose a fine of up to six percent of the company's worldwide annual revenue. Against this decision, legal action could be taken. Only estimates are known about X's current revenue. Since Musk bought the predecessor service Twitter in October 2022 and it went public, no figures have been disclosed. Details about the deal have only emerged in pieces. For example, Bloomberg recently reported that revenues fell by 40% in the first half of 2023 to $1.48 billion compared to the previous year.
X has been under criticism for some time for not taking decisive action against false information and hate speech on the platform. The DSA obliges companies to strictly enforce illegal content such as hate speech and incitement to violence on the internet. Elon Musk had consistently emphasized his intention to remove what he considered excessive restrictions on free speech on the platform.
X was therefore sent a questionnaire by the EU Commission after it received numerous indications of illegal and misleading contributions to the attack by the Islamist Hamas on Israel on the platform. Since the answers were not satisfactory to the EU Commission, a proceeding against X was initiated. This proceeding runs independently of the currently presented preliminary results.
The European Commission's preliminary investigation suggests that Elon Musk's platform X, formerly known as Twitter, may violate EU law due to its verification process, potentially leading to substantial fines. Under the Digital Services Act (DSA), X is accused of allowing any user to have a "verified" account, blurring the lines between real and fake profiles. Additionally, Elon Musk's decision to grant checkmarks to all subscribers has been criticized, with malicious actors reportedly using these alleged verified accounts to deceive other users.
