Elon Musk’s content moderation decisions make X the first target of the EU’s new Digital Services Act

Elon Musk’s X today became the first subject of formal infringement proceedings under the EU’s new Digital Services Act (DSA), which has applied to big platforms like the former Twitter since August. The trigger? X’s failure to handle disinformation on its platform in the context of the Israel-Hamas war.

The European Commission began investigating X’s DSA compliance just over two months ago, and this morning said the company may have broken the law in the areas of “risk management, content moderation, dark patterns, advertising transparency and data access for researchers.” That may sound abstract, but the Commission’s complaints cut to the heart of Musk’s approach to content moderation.

Having slashed costs by getting rid of many of the outsourced content moderators that used to police Twitter, Musk now relies a little too heavily on AI and X’s Community Notes mechanism. In September, X told the Commission it had just 2,294 content moderators in the EU; far less than the numbers used by the likes of YouTube (16,974) and TikTok (6,125).

The picture gets much worse when it comes to non-English content—X has only 12 people on its European content moderation team who can speak Arabic, 81 who can speak German, 20 with Spanish skills, and one person apiece with the ability to moderate content in Polish or Dutch.

Bad luck for X, then, that a highly polarizing war broke out in early October, flooding all social media platforms with lies and hate speech.

The Commission said its compliance proceedings, which have no fixed deadline, will have a heavy focus on X’s content moderation resources and the effectiveness of Community Notes. “Shortcomings in X’s ads repository” are also apparently problematic, as is its blue check system, which the Commission suspects of being a “deceptive design”—given that a blue check used to denote authenticity and prominence but can now just be bought with a subscription fee, I can see where the Commission is coming from.

“Today’s opening of formal proceedings against X makes it clear that, with the DSA, the time of big online platforms behaving like they are ‘too big to care’ has come to an end,” Commissioner Thierry Breton said in a statement. That’s the same Thierry Breton next to whom Musk stood in an always-funny video from back in May 2022, when the tycoon insisted that he agreed with “everything” in the incoming DSA—experts expressed deep skepticism at the time about Musk’s willingness to actually comply with the law, and boy, were they right.

The DSA carries fines that go as high as 10% of annual global revenue (or twice that for repeated serious infractions) and, unlike the General Data Protection Regulation, it’s enforced by the European Commission itself rather than underfunded national authorities. Breton: “We will make full use of our toolbox to protect our citizens and democracies.” X’s revenue for this year is projected to be around $3.4 billion, which already represents a major drop since Musk bought Twitter, so a big fine may pose an existential threat if the company survives long enough for the Commission to wrap up its proceedings.

More news below, and do please also read my article on the egregious Big Tech conflicts of interest that have been thrown up by AI’s rapid evolution—I know it’s hard to believe, but apparently, Silicon Valley doesn’t play the same corporate governance rulebook that applies to everyone else!

David Meyer

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NEWSWORTHY

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IBM buys Software AG platforms. IBM is paying $2.3 billion for two key Software AG enterprise integration platforms. As Reuters reports, the StreamSets and webMethods platforms comprise the German company’s recently launched Super Ipaas business, providing functionality such as application integration and API management.

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SIGNIFICANT FIGURES

49%

—The percentage of OpenAI’s profits to which big investor Microsoft is entitled, according to the Financial Times's sources. Until now, everyone has been assuming Microsoft had 49% of the equity in OpenAI’s profit-making arm, which is understandable as—until antitrust regulators recently started sniffing around this month—OpenAI’s website described Microsoft as its “minority owner.” It now says Microsoft has a “minority economic interest.”

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BEFORE YOU GO

Twitch’s nudity U-turn. Last week, the streaming service Twitch changed its policies to allow “artistic nudity” such as illustrated breasts and animated genitals. Two days later, it reversed course, re-banning fictional as well as real nudity (apart from the nudity shown in Mature-rated games).

As Twitch CEO Dan Clancy explained in a blog post, the original change was a response to artists that had long complained about overly limiting content policies—and the reversal was a response to the flood of photorealistic, AI-generated nude content that some users then poured onto the platform. “I wish we would have predicted this outcome,” he sighed.