Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Elon Musk’s X is being threatened with hefty fines by the EU over a series of transparency issues at the social media company, including allowing people to acquire a “checkmark” that was once reserved for verified users.

The European Commission, the EU’s executive body, said on Friday that X was “in breach” of the bloc’s landmark Digital Services Act, which came into force this year and was designed to better police online content.

In preliminary findings from an investigation that began last year, the EU said a decision following Musk’s $44bn takeover of the company two years ago, to allow anyone to pay to gain a blue checkmark, would deceive millions of users.

“Since anyone can subscribe to obtain such a ‘verified’ status, it negatively affects users’ ability to make free and informed decisions about the authenticity of the accounts and the content they interact with,” said regulators in Brussels.

X can defend itself but if the EU’s findings are confirmed, the company faces fines of up to 6 per cent of its total worldwide turnover. In 2021, the last full year that Twitter published its revenues, the company made $5.1bn.

On Friday, Musk wrote on X: “The European Commission offered X an illegal secret deal: if we quietly censored speech without telling anyone, they would not fine us. The other platforms accepted that deal. X did not.” He did not provide further details of the alleged censorship deal.

The DSA imposes a range of new responsibilities on big online platforms, such as forcing them to issue regular reports on the removal of illegal and harmful posts and offer opt-outs from targeted advertising.

Brussels added X’s practices had not complied with the DSA in a number of areas, such as prohibiting the use of dark patterns — deceptive techniques used to manipulate user behaviour, as well as transparency on advertising and allowing proper data access for researchers. 

“Back in the day, blue checks used to mean trustworthy sources of information,” said Thierry Breton, the French commissioner for the internal market.

“Now with X, our preliminary view is that they deceive users and infringe the DSA. We also consider that X’s ads repository and conditions for data access by researchers are not in line with the DSA transparency requirements.

“X has now the right of defence — but if our view is confirmed we will impose fines and require significant changes.”

The Financial Times reported in October that X would be the first company to be investigated over breaches of the EU’s digital rules.