X, the social media platform owned by Elon Musk, has become the first recipient of a fine under the European Union’s Digital Services Act (DSA). The European Commission imposed a substantial penalty of €120 million on December 5, 2023, due to breaches of transparency obligations outlined in the DSA. Following this decision, X promptly deactivated the European Commission’s advertisement account, raising questions about the platform’s compliance with EU regulations.
The fine stems from a year-long investigation into X’s practices concerning account verification, advertising transparency, and access to public data for researchers. The Commission determined that X’s verification system, which allows any user to purchase a “blue checkmark,” misleads users regarding the authenticity of accounts. In its findings, the Commission stated that this practice “violates the DSA” and undermines the trust users place in the platform.
Additionally, X has been criticized for failing to provide researchers with adequate access to public data, as mandated by the DSA. The Commission noted that the platform’s advertising repository did not meet the necessary transparency and accessibility standards. Design features and access barriers, including excessive delays in processing requests, further hindered the repository’s effectiveness, according to the Commission.
X now faces a window of 60 to 90 days to present a corrective action plan to the European Commission detailing how it intends to address these violations. Earlier reports indicated that the EU had considered levying fines exceeding $1 billion against X for various DSA infractions earlier in 2023.
In a surprising turn, X deactivated the European Commission’s ad account shortly after the announcement of the fine. The platform’s head of product, Nikita Bier, accused the Commission of exploiting an oversight in X’s ad composer tool. He claimed, “You logged into your dormant ad account to take advantage of an exploit in our Ad Composer – to post a link that deceives users into thinking it’s a video and to artificially increase its reach.” Bier confirmed that this exploit has now been rectified.
In light of these developments, a spokesperson from the European Commission stated that they engage with all social media platforms in good faith. “The Commission is simply using the tools that platforms themselves are making available to our corporate accounts,” the spokesperson explained. They emphasized the expectation that these tools comply with the platforms’ terms and conditions as well as the legislative framework governing their use.
The European Commission had already suspended paid advertisements on X in October 2023, reflecting ongoing concerns about the platform’s compliance with EU regulations. In a separate investigation, Ireland’s regulatory body, Coimisiún na Meán, is reviewing whether users can effectively appeal decisions related to content moderation on X.
As the landscape of social media regulation continues to evolve, the implications of X’s fine and subsequent actions may shape the future of online platforms operating within the EU.
