EU Commission sends preliminary findings to X for potential breach of the Digital Services Act

In a significant move to enforce the EU’s Digital Services Act (DSA), the EU Commission has issued preliminary findings against the tech giant X, alleging multiple breaches of the DSA. The Commission’s allegations, which could lead to substantial fines and regulatory measures, focus on X’s practices related to dark patterns, advertising transparency, and data access for researchers.

What are dark patterns?

The investigation has uncovered evidence that X may have employed “dark patterns”, which are deceptive design techniques that manipulate user behavior and coerce them into making unwanted actions. These tactics, often used to increase revenue or limit the user’s choices, can have serious consequences for consumers. Specific examples cited by the Commission include:

• Forced subscriptions: X may have implemented mechanisms that automatically subscribe users to paid services without their explicit consent.
• Hidden fees: X may have concealed additional charges or fees, making it difficult for users to understand the actual cost of their actions.
• Limited choice: X may have restricted user options or presented them with misleading choices to influence their decisions.

Lack of advertising transparency

The DSA requires online platforms to provide users with clear information about the targeting of advertisements and the criteria used to personalize content. The Commission’s findings suggest that X may have fallen short in this regard, including:

• Opaque targeting methods: X may have used undisclosed or complex algorithms to target advertisements, making it difficult for users to understand how their data is being used.
• Insufficient transparency: X may not have provided adequate information about the sources of advertising data or the factors influencing ad placement.

Restricted data access for researchers

The DSA aims to promote transparency and accountability by enabling researchers to access platform data for academic purposes. The Commission’s investigation has revealed potential concerns about X’s data access policies. Key allegations include:

• Excessive restrictions: X may have imposed overly stringent conditions or requirements on researchers seeking access to platform data.
• Limited scope of data access: The Commission suggests that X may have restricted access to certain types of data, hindering researchers’ ability to conduct comprehensive studies.

Potential consequences

If the Commission’s preliminary findings are confirmed, X could face significant penalties. The DSA allows for fines of up to 6% of a company’s global annual turnover. The Commission may also impose regulatory measures, such as requiring X to implement changes to its practices or undergo enhanced supervision.

How can Logan & Partners help?

Logan & Partners can provide expert guidance and representation to businesses facing regulatory challenges, including those related to the DSA. If you are concerned about potential DSA compliance issues or need assistance navigating digital regulations, don’t hesitate to reach out and book a free initial consultation.

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