What's Happening?
The European Commission (EC) has imposed a €120 million fine on X, the social media platform formerly known as Twitter, for breaching transparency obligations under the Digital Services Act (DSA). The fine is a result
of X's practice of allowing users to purchase a 'blue checkmark,' which traditionally indicated verified identity. The EC criticized this system as deceptive, as it no longer verifies the authenticity of users, but rather indicates a subscription to X Premium. This change, implemented after Elon Musk's acquisition of the platform, has raised concerns about user exposure to scams and impersonation. Additionally, the EC found that X's advertisement repository lacks transparency and accessibility, failing to provide essential information about ads and their sponsors. The platform also restricts researchers' access to public data, hindering the study of systemic risks.
Why It's Important?
This fine marks the first penalty under the DSA, highlighting the EU's commitment to enforcing transparency and accountability in digital services. The decision underscores the importance of protecting users from deceptive practices and ensuring that platforms provide clear and accurate information. For U.S. companies operating in Europe, this serves as a critical reminder of the stringent regulatory environment and the potential financial repercussions of non-compliance. The case also emphasizes the growing scrutiny on social media platforms regarding their role in misinformation and user safety, which could influence future regulatory actions both in Europe and potentially in the U.S.
What's Next?
X has been given 60 days to address the issues related to the blue checkmark system and 90 days to propose an action plan for improving ad transparency and data accessibility. Failure to comply could result in further sanctions, including fines up to 6% of the company's global annual turnover. This situation may prompt other social media platforms to reassess their verification and transparency practices to avoid similar penalties. The outcome of X's response could set a precedent for how digital platforms are regulated under the DSA, potentially influencing global standards for online transparency and accountability.
