Elon Musk’s X first to be fined under EU’s Digital Service Act

In a landmark decision, Elon Musk's platform, X, has been hit with a fine of nearly $140 million, marking the first instance of a major online service being penalized under the European Union's Digital Services Act (DSA). The European Commission announced the fine on Friday, highlighting the platform's potential for additional penalties if it fails to rectify its compliance issues. This hefty fine stems largely from a controversial move Musk implemented shortly after acquiring Twitter in November 2022. He transformed the verification process for users by charging $8 per month for a blue checkmark, which had previously been reserved for verifying the identities of notable figures. This shift led to a surge of impersonation accounts mimicking celebrities, officials, and brands, raising significant concerns about user safety. The Commission's investigation, which has been ongoing since 2023, concluded that X's current method of portraying the blue checkmark as a means of verification misleads users. The DSA explicitly prohibits online platforms from falsely asserting user verification, especially when such verification has not occurred. This misleading practice has left users vulnerable to scams and impersonation fraud, as outlined by the Commission. Interestingly, despite Musk's stated intention to reduce bot activity on the platform, the Commission noted that the changes have actually complicated the identification of bots. Adding to the controversy, X faced criticism after a feature revealed that some of its most prominent influencers were based in regions known for online scams. X now has a 60-day window to outline its plans for addressing these compliance failures, as the EU continues to scrutinize the platform's operations.