Elon Musk’s X has been warned by the EU it potentially faces large fines after regulators said its blue-tick system for users is deceptive and in breach of its landmark social media rules. Musk responded with “We look forward to a very public battle in court” late on Friday. Announcing preliminary findings from an investigation, the European Commission said the platform did not comply with the Digital Services Act. X faces fines of up to 6% of its global turnover if the preliminary findings are confirmed. The EU’s executive arm said X had breached the act in three areas: deceiving users by giving blue ticks – previously a way to signal an account’s reliability – to untrustworthy accounts; failing to give researchers access to publicly available data such as posts; and running an inadequate advertising library, which prevents researchers from scrutinising ads, including deliberately misleading ones, on the platform. Thierry Breton, a key figure behind the act as the EU’s commissioner for internal market, said: “Back in the day, blue checks used to mean trustworthy sources of information. Now with X, our preliminary view is that they deceive users and infringe the DSA.” Breton said X had the right to respond but “if our view is confirmed we will impose fines and require significant changes”. The commission is still investigating whether X has breached the DSA by failing to tackle illegal content and disinformation on the platform. Friday’s announcement represents the commission’s first preliminary findings against a company under the DSA. It has also opened proceedings under the act against TikTok and Mark Zuckerberg’s Meta. X has not published formal financial figures under Musk’s ownership. But the Tesla chief executive has admitted the company’s advertising revenues – historically its main source of income – have fallen substantially since he bought it in 2022 and has said it was heading to revenues of $3bn in 2023. X introduced paid-for blue ticks as part of a revamp of its premium subscription service, costing €8 a month in the EU, which Brussels says has been abused by bad actors. “There is evidence of motivated malicious actors abusing the ‘verified account’ to deceive users,” said the commission. Musk’s first attempt at revamping the premium service in 2022 resulted in a rash of impostor accounts as pranksters took advantage of the change to buy a blue tick and pretend to be companies such as Nintendo and Tesla as well as public figures including the pope and George W Bush. Musk hit back at the EU on Friday in posts on X that claimed the commission had offered X an “illegal secret deal” to avoid a fine by agreeing to quietly censor users. He also threatened legal action against the commission. “We look forward to a very public battle in court, so that the people of Europe can know the truth”, wrote Musk. Breton replied on X that there had been no secret deal and said it was Musk’s own team who asked the commission for details on the complaint. “We did it in line with established regulatory procedures. Up to you to decide whether to offer commitments or not. That is how rule of law procedures work. See you (in court or not),” wrote Breton.