Elon Musk's X deceives users and breaches online content rules, EU says

The European Commission on Friday accused Elon Musk's X of deceiving users and infringing digital content rules, putting the social media giant at risk of a hefty fine.

The commission, which is the European Union's executive arm, started an investigation last year to assess whether X is in breach of the Digital Services Act (DSA) — a piece of landscape legislation requiring Big Tech firms to better police the content on their platforms.

The body's preliminary view, published Friday, is that X has broken rules regarding dark patterns, advertising transparency and data access for researchers. So-called dark patterns are deceptive tactics designed to push people toward certain products and services.

X's use of the blue checkmark for verified accounts does not correspond to industry practices, the commission said, as anyone can subscribe and obtain a verified status. It added that there was evidence of "motivated malicious actors" abusing the verified status to deceive users.

The commission also accused X of putting in place design features and barriers that hinder advertising transparency, and said it fails to allow researchers to access its public data, as is required by the DSA.

"In our view, X does not comply with the DSA in key transparency areas, by using dark patterns and thus misleading users, by failing to provide an adequate ad repository, and by blocking access to data for researchers," the European Union's antitrust chief, Margrethe Vestager, said in Friday's statement.

"The DSA has transparency at its very core, and we are determined to ensure that all platforms, including X, comply with EU legislation."

X did not immediately respond to CNBC's request for comment.

If the commission's views are confirmed, X could face a fine of up to 6% of its global annual revenue.

"X has now the right of defence — but if our view is confirmed we will impose fines & require significant changes," EU industry chief Thierry Breton said in a post on X.

The commission is also investigating TikTok, Alibaba's AliExpress and Meta over similar concerns.

It comes as the EU clamps down hard on tech giants like Google and Meta. In 2022 the commission introduced the Digital Services Act, with a key part of it focused on how digital companies target users with ads.