TheChek News Flow

The European Commission said it identified three grievances over X’s content practices, which could lead to a fine of up to 6% of the company’s total worldwide annual turnover

Elon Musk’s social-media platform X is in breach of the European Union’s online-content law, opening the company up to a large potential fine, according to a preliminary decision from the bloc’s executive arm.

Friday’s decision from the European Commission follows a monthslong investigation into X, formerly known as Twitter, to assess whether it infringed the Digital Services Act, legislation that requires some of the world’s biggest online platforms to address illegal content and offer transparency around content moderation and advertising, among other rules.

The commission said it identified three grievances over X’s content practices, which could lead to a fine of up to 6% of the company’s total worldwide annual turnover. After Musk bought Twitter in 2022, he delisted the company and its financial performance data are no longer publicly available, making the potential size of any fine difficult to calculate.

The commission found that X’s design and functioning of its blue checkmark feature is an illegal verification tool as anyone can pay to obtain the checkmark and gain verified status, which deceives users. The checkmarks were previously reserved for users that Twitter deemed authentic and notable, but are now tied to subscription accounts.

“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. “There is evidence of motivated malicious actors abusing the ‘verified account’ to deceive users,” it added.

It also found that X failed to comply with advertising transparency rules as it doesn’t provide proper access to the company’s store of advertisements. The commission argued that users can’t use X’s advertising repository to find advertisers and view details including creatives, targeting information and reach.

A third failing concerns the accessibility of public data to researchers, as the commission said X prohibits eligible researchers from independently accessing its public data.

The findings are preliminary and X now has the chance to respond. If the commission ultimately confirms its preliminary findings, the company could be fined, and in the case of non-compliance, subjected to an enhanced supervision period to ensure compliance and periodic penalty payments.

X didn’t immediately respond to a request for comment.

A probe into X’s measures to counter the spread of illegal content and combat disinformation continues, the bloc said. Investigators are looking at the effectiveness of X’s Community Notes feature, which allows volunteers to add context to posts and aims to improve the reliability of information contained in posts.

X isn’t alone in coming under scrutiny. The EU is also investigating other social media companies that it considers very large online platforms—those that have a userbase of at least 45 million average active users in the bloc.

It is looking into TikTok to examine potential breaches of the Digital Services Act in areas linked to the protection of minors, advertising transparency, data access for researchers, and risk management of addictive design and harmful content. Earlier this year, the EU opened a second probe into a new product the video app launched that allows users to earn points while performing certain tasks.

An investigation into Facebook and Instagram owner Meta Platforms is looking into potential breaches surrounding the protection of minors as well as advertising and political content among other things, while AliExpress is also being probed over various risk and transparency concerns.

Shareholders including activist Nelson Peltz are pressuring consumer giant to boost growth

Unilever plans to cut a third of all office roles in Europe by the end of next year, as the company’s new chief executive forges ahead with his plan to boost growth at the struggling consumer goods giant.

The FTSE 100 company, which is under pressure from shareholders including activist investor Nelson Peltz, told senior executives on Wednesday that as many as 3,200 roles would be cut in Europe by the end of 2025, according to details of a company-wide call shared with the Financial Times.

The job cuts are part of Unilever’s “productivity programme” first announced in March that include slashing as many as 7,500 roles globally. The company employs 10,000 to 11,000 office-based staff in Europe.

“The expected net impact in roles in Europe between now and the end of 2025 is in the range of 3,000 to 3,200 roles,” said Constantina Tribou, a chief human resources officer, during the video call.

The cuts would apply “primarily to office-based roles” and will not include jobs based in factories, she added.

The exact location of the job cuts across Europe is yet to be formally decided by the multinational company, whose headquarters and primary listing are both in London after abandoning its Anglo-Dutch structure in 2020. A consultation process is starting over the next few weeks with affected employees, Unilever said in a statement.

Hermann Soggeberg, chair of Unilever’s European Works Council, said almost all European office locations would be equally affected but particularly the corporate centres in London and Rotterdam.

Employees listening to the call expressed anger in the live comments system during the question-and-answer session, in which one executive suggested staff should put their energy into the business rather than dwelling on the uncertainty and anxiety.

“Instead of wasting it in the anxious thoughts, let’s put our great energy in serving our customers and consumers and really making this business great. That is what is in our control,” the executive said.

“I am honestly so disappointed if that is the view for employees — how is that acceptable?” wrote one employee.

“Complete failure to read the room and shows zero awareness of how people feel on the ground,” wrote another.

Hein Schumacher, who replaced Alan Jope as chief executive of Unilever one year ago is under pressure from shareholders, chief among them Peltz, to shake up the company and boost growth after years of lacklustre financial performance.

The company announced in March that it would hive off its ice cream division in a bid to boost growth. The Netherlands-based division — which makes up 16 per cent of groups sales and includes brands such as Ben & Jerry’s and Wall’s — was lagging behind faster-growing categories such as beauty and wellbeing.

Unilever also announced it would cut 7,500 jobs globally, without specifying where the job cuts would be carried out. Unilever employs about 128,000 people around the world.

Soggeberg said the works council, which fights for employee rights, was liaising with management on a consultation to establish where the job cuts would be carried out and to establish how to minimise the losses.

Some people who are let go could be reassigned to new roles in the ice cream business once it is spun off “in order to reduce the number of affected colleagues”, Soggeberg said.

“We will not be able to safeguard every job, but we need to safeguard every person,” he added. “It’s the biggest restructure we have seen in the last decade. This is shocking for the people.”

A Unilever spokesperson said in a statement: “In March, we announced the launch of a comprehensive productivity programme, to drive focus and growth through a leaner and more accountable organisation.”

The spokesperson added: “We recognise the significant anxiety that these proposals are causing amongst our people. We are committed to supporting everyone through these changes, as we go through the consultation process.”

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When autos become obsolete more quickly, dealers see more return customers

People get nostalgic about their first set of wheels, but those fond memories probably miss an important detail—they were often pieces of junk. Auto dealers didn’t mind.

Back in 1976, when cars on American roads were just 6.2 years old on average, new car sales accounted for nearly 10% of car registrations. As of 2019, when the average car age had doubled, more consumers were able to hold on to their cars longer or opt for used ones. By then, the share of new vehicle sales had fallen to 6.4% of registrations.

Could electric vehicles bring back those glory days of brisk sales and rapid obsolescence? In some ways, EVs resemble cellphones: Technology on them keeps improving rapidly and they are powered by batteries that degrade over time and depreciate quickly.

It is still early days. EVs make up 6.8% of U.S. auto sales but just over 1% of light-duty vehicles today. As they become a bigger part of the fleet, they could once again rev up dealers’ business—through not only faster replacement cycles but also more frequent repairs. While EVs have fewer mechanical parts, a recent study from J.D. Power showed that owners of battery EVs and plug-in hybrids took their new vehicles to the dealership for repairs at a rate three times higher than gas-powered vehicle owners did.

One reason to think EVs could accelerate replacement cycles: EV technology is improving a lot more quickly than technology for gasoline-fueled cars, which have been getting optimized for at least a century.

“The incremental improvement you see every year on [gas cars] is relatively small. When you look at incremental improvement on EV technology, that’s actually quite phenomenal, especially the battery but also the energy management in the vehicle,” said Philipp Kampshoff, a senior partner at McKinsey who leads its Center for Future Mobility in the Americas.

Consider battery life: The median range on electric vehicles was 270 miles for 2023 model year cars, up 27% from five years earlier, according to the U.S. Department of Energy. The improvement is even more remarkable on high-end EVs: Back in 2018, the longest-lasting battery could hold 335 miles of charge. Last year, the highest battery range hit 516 miles. Like iPhone and iPad makers, EV manufacturers are able to do a lot of updates over the air, but these have limits when the physical components can’t keep up with the newest updates.

Expensive repairs are another reason EVs might get cycled out faster. They require more mechanical labor hours. EVs also have been depreciating at a faster rate than gas cars, which gives owners even more reason to opt for replacement rather than repair.

An EV bought brand new at the beginning of 2022 went for about half the manufacturer’s suggested retail price after about two years and one month of ownership, according to data from KBB and Manheim. Internal combustion engine cars and hybrids retained about 66% and 73% of their MSRP, respectively, after that period.

The recent depreciation for EVs was exaggerated by a series of price cuts on EVs that started last year with Tesla TSLA -8.44%decrease; red down pointing triangle. High maintenance costs also can contribute to steep depreciation: Luxury cars, for example, lose value quickly precisely because they are so expensive to maintain and repair, notes Karl Brauer, analyst at iSeeCars.

The same math applies to EVs that get into collisions: They are more likely to be declared total losses and sent to the scrapyard than fixed. In the first quarter, total loss frequency for EVs up to three years of age exceeded that of gas cars, according to data from Mitchell, a provider of software and data to insurers and the collision-repair industry. Up until 2023, total loss frequency had been lower for EVs because of how expensive they were relative to gas cars.

Ryan Mandell, director of claims performance at Mitchell, said he expects to see higher total loss frequency for EVs going forward, partly because cheaper EV models—such as those made by Kia—are becoming more popular. When the baseline used EV price is lower to begin with, it becomes more likely that the cost of reimbursing a driver for a similar car is lower than the cost of repairing it.

Battery degradation is another issue. Federal law requires automakers to give warranty on EV batteries for at least eight years or 100,000 miles, whichever comes first. About 13% of EVs outside that warranty window (2015 model or older) reported battery replacements, according to Recurrent, a provider of a battery-monitoring tool for EVs. In many cases, a replacement might cost more than buying a used EV. Recurrent notes, though, that most EVs have been on the road well under six years, making it difficult to form judgments. Predictive modeling from the National Renewable Energy Laboratory suggests that EV batteries should last 12 to 15 years under moderate climates.

There is already some indication that EVs are getting cycled out more frequently than gas cars. The average age of all cars on the road has been growing, and hit a record high of 12.6 years in 2024, but the average EV age has declined from 3.9 years in 2021 to 3.5 years this year, per S&P Global Mobility. Part of that is because new EV registrations have grown, but it is also because more EVs are off the road. About 6.6% of EVs registered in the U.S. left the fleet between 2013 and 2022, according to S&P Global Mobility data. That compares with a roughly 5.2% scrappage rate for gas vehicles. Scrappage includes cars that were sent to the junkyard, exported or simply parked without being used.

Given how much younger the EV population is, the scrappage rate is “higher than what we’d expect,” said Todd Campau, associate director of aftermarket solutions at S&P Global Mobility.

EVs have hit a speed bump lately: U.S. sales have slowed considerably to a growth rate of 2.6% in the first quarter year over year, according to Cox Automotive. A McKinsey survey published in June showed that 46% of EV owners in the U.S. said they are likely to switch back to a conventional car, primarily blaming the lack of charging infrastructure and the high total costs of ownership.

That surely frustrates dealers at the moment, but EVs could work out very nicely for them in the long run.