Tech billionaire Elon Musk's X platform is misleading users with its blue checkmarks for certified accounts and violating EU content rules, Brussels stated on Friday, a finding that could lead to substantial fines.

EU regulators are dissatisfied with the blue badge system introduced under Musk's ownership, which now allows anyone to obtain the badge with a premium subscription. Previously, the badge was reserved for verified accounts, including those of leaders, companies, and journalists, following approval.

This formal warning against X is the first issued under the Digital Services Act (DSA), a comprehensive law that mandates digital companies to enhance their policing of online content. The warning follows an investigation initiated in December 2023.

X is now the third company in recent weeks to face scrutiny from the European Union for violating new regulations. Brussels recently warned Apple and Meta to comply with the Digital Markets Act (DMA) or face significant fines.

Since purchasing the platform in October 2022, Musk has rebranded Twitter as X and implemented various changes. However, his modifications have clashed with EU objectives, which aim to protect users online and foster competition in the digital sector.

The European Commission has expressed its preliminary view that X is "in breach of" the DSA, alleging that the social network "deceives" users with its new blue badge policies.

"Since anyone can subscribe to obtain such a 'verified' status, it negatively affects users' ability to make free and informed decisions about the authenticity of the accounts and the content they interact with," the commission said in a statement.

The commission further noted evidence of malicious actors exploiting the "verified account" status to deceive users. Additionally, X was accused of not complying with advertising transparency rules, as it does "not provide a searchable and reliable" ad database, and of failing to grant researchers access to public data.