X isn’t a private company: The European Commission is looking for a “painful, but necessary” blue check system

The charges against X follow a months-long investigation into the company. Nearly two years ago, a top European Commission official told NPR that serious fines would haunt Musk if he ignored the bloc’s new digital services regulations.

X introduced a more complicated system that Musk described as being “painful, but necessary.” After a series of scandals, X came up with a more complicated system that Musk described as being “Painful, but necessary.” Verified companies can get gold checks, gray checks go to governments, and in April 2024 users considered “influential” had their blue checks restored for free.

“It negatively affects users’ ability to make free and informed decisions about the authenticity of the accounts and the content they interact with,” the commission wrote in its findings. There is evidence that the malicious actors are abusing the account to deceive users.

In the European Union, authorities say the new blue check system violates the law. In particular a regulation known as the Digital Services Act, or the DSA, which forces large social media companies to aggressively police harmful content, or face financial penalties.

Under the new law, X must publish a database of all the digital advertisements it runs, with details about who bankrolled the ads and what audience the ads are targeting.

The EU investigators claimed that X’s ad database was unreliable, making it difficult for researchers to study “emerging risks” like ads that target vulnerable groups.

Musk wrote that they wouldn’t fine him if he quietly censored speech without telling anyone. The other platforms accepted that deal. Musk said he’d fight the case.

European authorities are looking at whether or not X has done enough to combat hate speech. European officials said that the investigation is still going on.

If X fails to address the European Commission’s three grievances, the company could face formal action and fines of up to six percent of its global revenue. Since X is a private company — purchased by Elon Musk for $44 billion in October 2022 — it’s unclear how much it potentially stands to lose in financial penalties. X qualifies as a Very Large Online Platform (VLOP) under the DSA since it reaches more than 45 million monthly active users in the EU.

The European Union is ramping up enforcement of its strict rules for big tech companies. The DSA launched separate probes to assess Meta’s ability to make political, deceptive, or illegal content safe for children on the platforms.

The European Commission said that by allowing any account to pay for verification, it negatively affects the users’ ability to make free and informed decisions about authenticity of accounts. X has the chance to respond to the findings. If Musk cannot reach a resolution with the EU, the company could face fines of as much as 6 percent of its annual turnover.

Apple, Microsoft and Meta have been accused of breaking EU rules in the past month. Meta and Apple must resolve their cases before March 2025 to avoid fines. Yesterday, Apple said it would make its Tap and Go wallet technology available to rivals, in its latest concession to local regulator demands.