Brussels regulatory authorities are using their new digital powers to threaten the social network X with hefty fines. The reason is transparency issues, especially related to the allocation of the blue checkmark, which was once reserved for verified users.

The European Commission, the executive body of the EU, announced on Friday that X violates the Digital Services Act (DSA), which came into force this year and aims to better control online content.

In preliminary findings of an investigation that began last year, the EU stated that X's decision to allow every user to obtain the blue check mark for a fee following Musk's $44 billion acquisition two years ago could potentially mislead millions of users.

Since anyone can subscribe to obtain such a 'verified' status, it undermines users' ability to make free and informed decisions about the authenticity of the accounts and content they interact with," explained the regulators in Brussels.

X has the opportunity to defend itself. Should the EU confirm its findings, the company faces fines of up to 6 percent of its global revenue. In 2021, the last full year in which Twitter published its earnings, the company generated 5.1 billion dollars.

On Friday, Musk wrote on X: "The European Commission offered X an illegal secret deal: If we secretly censor freedom of speech without informing anyone, they would not punish us. The other platforms accepted this deal. X did not." He did not provide further details about the alleged censorship deal.

Thierry Breton, EU Commissioner for the Internal Market, later responded on X: "Be our guest @elonmusk. There has never been – and will never be – any 'secret deal.' With anyone.

The DSA provides X with the opportunity to offer commitments to settle a case. To be perfectly clear: It was YOUR team that asked the Commission for an explanation of the procedure for settlement and clarification of our concerns... It is up to you to decide whether or not to offer commitments. That's how legal procedures work. We'll see you (in court or not).

The DSA imposes a series of new responsibilities on major online platforms, such as regularly reporting on the removal of illegal and harmful content, as well as offering opt-outs for targeted advertising.

Brussels added that the practices of X did not comply with the DSA in several areas, such as the ban on the use of dark patterns – deceptive techniques that manipulate user behavior – transparency in advertising, and granting proper data access for researchers.

Blue checkmarks used to signify trusted sources of information," said Thierry Breton, the French Commissioner for the Internal Market.

At this point, it is our preliminary view that X is deceiving users and violating the DSA. We also consider that X's ad directory and conditions for data access by researchers do not meet the transparency requirements of the DSA.

X now has the right to defense – but if our view is confirmed, we will impose fines and demand significant changes.

The Financial Times reported in October that X would be the first company to be investigated for violations of the EU's digital rules.