The EU has reportedly warned Elon Musk's platform X this week that it risks facing heavy fines due to the 'misleading' blue-tick system. Preliminary findings indicate X has breached the Digital Services Act—with findings of deceiving users, withholding data provision to researchers, apart from having a bad ad library. If confirmed, these could include up to 6% of global revenue in fines.

EU Warns X of Big Fines over 'Misleading' Blue-Tick System

The EU issued a stern warning to Elon Musk's social media platform, X, that it could be slapped with hefty fines. This was in response to the finding by EU regulators that the blue-tick system on X over users can be misleading and violates important social media rules known as the Digital Services Act, or DSA.

Preliminary findings from an investigation into alleged violations, published by the European Commission, stated that X had violated the Digital Services Act. Should these findings be confirmed, it could well face a fine worth up to 6% of its overall worldwide turnover.

Blue-Tick System Malfunctions

The Commission has pointed out three major ways through which X infringed on the rules:

1. Deceiving users: the blueprint ticks were meant to signal to people that this account is authentic. Recently, some accounts bear the tags of having blue ticks yet are very untrustworthy, thus deceiving the users.

2. No Data for Researchers: One of the things that researchers couldn't access was public data like posts on the platform; this data becomes very beneficial in studying online behaviors and trends.

3. Inadequate Ad Library: X did not have a good ad library. It failed to allow researchers to adequately inspect ads, including those that can constitute misinformation.

European Union Concerns

One giant character standing behind the DSA and EU Commissioner for the Internal Market, Thierry Breton, voiced his concerns that now, with X, "Blue checks used to imply a user is looking at trustworthy sources of information. Now, we believe they deceive users and violate the DSA."

It can also react to the findings, as Breton also said. If the findings are confirmed – well, the EU will fine and demand far-reaching changes from X.

Further Investigations

Also, it investigates whether X has not taken sufficient action against illicit content and disinformation on its platform. Friday's announcement was the first set of findings against any company under the DSA. The Commission has already opened investigations into TikTok and Meta, a company owned by Mark Zuckerberg.

Economic Toll on X

X hasn't shared formal financial numbers since Elon Musk took over, but Musk has earlier said that the company's ad revenues have fallen significantly since he bought the platform in 2022. He said that X was targeting $3 billion in revenues this year.

He did this by offering paid-for blue ticks as part of €8 per month premium subscription service. But Brussels says bad actors have used this to protect users from falling foul of misleading verified accounts.

Problems with Verified Accounts

The Commission stated that there's proof that bad actors are using 'verified accounts' to scam people. When Musk initially re-launched the premium service in 2022, he opened the floodgates for a wave of phony accounts. Rogues could buy blue ticks and pose as famous businesses such as Nintendo and Tesla, along with public figures like the pope or George W. Bush.

X's Response

The article states that a comment on the situation has been invited from X. No information about their response is available yet, though.

There you have it—all: the EU makes it clear that it does mean business regarding the enforcement of X's compliance with the rules. Should the Investigation confirm that the misleading blue-tick system at X broke the rules, large fines and major changes at the company could be the result.