X, FORMERLY TWITTER, is deceiving users with its blue check system, according to a preliminary ruling from the European Commission under the new Digital Services Act.

The Commission found that the current subscription system – which allows any user to purchase a ‘verified’ status, previously only available for the official accounts of organisations and individuals – “negatively affects users’ ability to make free and informed decisions about the authenticity of the accounts and the content they interact with”.

“There is evidence of motivated malicious actors abusing the ‘verified account’ to deceive users,” the Commission said in a statement.

The first time that the new and powerful Digital Services Act has been used to issue a formal warning since its adoption in 2023. The act is intended to force social media companies to do more to police the content that appears on their content.

The ruling also found X lacking in required transparency in advertising. Specifically, it found that the company did not have provide “a searchable and reliable advertisement repository, but instead put in place design features and access barriers that make the repository unfit for its transparency purpose towards users”.

X has seen substantial changes since being bought by billionaire tech mogul Elon Musk in October 2022, including its name. 

The change to the site’s verified service was one of the more dramatic since the takeover. Originally, the blue checkmark beside a users name was an indication that it was the official account of that individual or organisation.

However, with the launch of Twitter Blue, the blue check became an indication that a user was paying a subscription. The original launch, just ten days after Musk’s $44 billion (around €40 billion) purchase of the company, ended in fiasco as users began to impersonate official accounts.

One user, posing as pharmaceutical giant Eli Lilly, posted a tweet saying “We are excited to announce insulin is free now.” The subsequent exposure the tweet received caused Eli Lilly’s stock prices to drop by 4.5%, and the company withdrew advertising funding from X, costing the social media giant millions.

Musk’s personal antics have also drawn attention, such as his challenge to fight Meta owner Mark Zuckerberg in a cage match, and his courting of the Irish far-right over proposed hate speech legislation.

X’s lack of moderation has also made it a target for enforcement under the DSA, with the EU telling the company to supply ”detailed information and internal documents”, and to provide information on how they will mitigate the impact that generative AI can have on election coverage.

X will be able to examine the EU’s file and defend itself against Friday’s finding. However, if the Commission’s view is confirmed, the company could face heavy fines, which can reach up tp 6% of its annual turnover.

With reporting from AFP.