In its first DSA sanction, the EU imposed fines of €120 million over a “deceptive” blue check verification system.

The European Commission (EC) has imposed its first fine under Europe’s landmark Digital Services Act (DSA), against Elon Musk’s X.

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The European Union’s executive arm called the design of the blue check mark system “deceptive” and on Friday imposed a fine of 120 million euros (about $140 million) on X, saying the company had violated its transparency obligations under the Digital Services Act.

Other violations of the law include a lack of transparency in the X ad repository and failure to enable researchers to access public data, the committee said.

Before Musk bought the company, Twitter used to issue blue checks to journalists, celebrities, politicians and public figures on the platform after verifying their identity. Musk got rid of that policy in 2023, and all the blue “verified” check today indicates is that the user is a X Premium subscriber, and that they meet certain eligibility criteria, such as having a profile photo, a display name, and linking their account to a phone number.

“X’s use of the ‘blue check mark’ for ‘verified accounts’ deceives users,” the commission wrote in a statement. “This violates the DSA’s commitment to online platforms to ban deceptive design practices on their services. In

The authority added that such a system exposes users to fraud, impersonation, and manipulation.

The regulator also found that X’s ad repository did not comply with the DSA’s transparency and accessibility requirements, saying the company imposed excessive delays in processing access requests. The committee also said that the ad inventory did not contain important information such as the content or subject matter of the ads, as well as who paid for those ads.

“This hinders researchers and the public from independently scrutinizing any potential risks in online advertising,” the committee wrote.

Access to public data is another area of ​​concern for the EU. The DSA requires that public platforms allow researchers to access public data to study systemic risks, and the European Commission investigation found that X does not allow researchers to do so independently.

“Furthermore, X-processes for researchers’ access to public data impose unnecessary barriers, effectively undermining research on many systemic risks in the EU,” the European Commission wrote.

This decision comes two years after the European Commission launched an investigation into the company over suspected violations of rules related to risk management, content moderation, dark patterns, advertising transparency and data access for researchers.

“Tricking users with blue check marks, hiding information on ads, and driving away searchers has no place on the EU internet,” Hina Virkonen, executive vice president for technical sovereignty, security and democracy at the European Commission, said in a statement.

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Confirmed violations of the DSA law can face a range of major penalties, including fines of up to 6% of global annual turnover.