Musk’s Twitter Blue Violates Unfair Business Practice Rules: EU Agency

Twitter Blue was launched in European Union countries in February and March.
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  • Elon Musk’s Twitter Blue subscription is a flagship project that makes the company profitable.
  • But advertised subscription prices in the European Union do not include taxes.
  • An EU consumer protection official told Insider that this violates the bloc’s pricing rules.

Elon Musk’s Twitter Blue subscription violates European Union rules on unfair business practices, a consumer watchdog at the bloc told Insider.

Specifically, the advertised subscription prices do not include taxes, which violates consumer protection laws in the 27-nation union, a spokesman for the watchdog said.

Twitter Blue is one of Musk’s flagship projects designed to make the social media company profitable. It was rolled out in EU countries in February and March.

In EU countries that use the euro currency, Twitter Blue has announced monthly price from €8, or about $8.50, for the web app – slightly more than the $8 price in the US. The advertised annual price for most users in the EU is €84, or about $88.50, versus $84 in the US.

However, EU prices do not include value added tax, a type of sales tax that varies across Europe; for example, it is 17% in Luxembourg and 25% in Sweden. While in the US sales tax is added to the advertised price at checkout, the EU requires companies to advertise the total price including VAT.

This means that Twitter users in Europe won’t know that the subscription could actually cost an extra $20 a year until Stripe’s checkout page automatically adds the tax after a second or two.

Insider tested the Twitter Blue subscription process in the UK and, via a VPN, in Belgium and Germany. 20% VAT is charged in any case upon payment. VAT in Great Britain is 20%, in Belgium it is 21% and in Germany it is 19%.

The German website initially showed €84 for an annual subscription, but this rose by 20%, or €16.80, to €100.80 at checkout. The final price was not shown anywhere before checkout.

While the tax is added at checkout in the US, the value added tax must be declared in the price in Europe.

Subscriptions to digital services such as Spotify, Netflix and YouTube include VAT in their advertised prices in Europe.

A spokesman for the European Consumer Center in Ireland — part of a network of offices designed to protect consumers and co-funded by the European Commission — said they had contacted legal staff at ECCs across the EU and had received responses from Belgium, Germany, Croatia , Ireland and Malta after contacting Insider.

“I can confirm that the display of prices and related promotions are in breach of Articles 6 and 7 of the ‘unfair business-to-consumer commercial practices’ directive,” they said.

The statutory provisions in question, which deal with misleading acts and omissions, state that “a commercial practice is considered to be misleading if it contains false information and is therefore false or in any way, including overall representation, misleads or is likely to mislead the average consumer , even if the information is factually correct.”

The legislation says this includes “the price or the manner in which the price is calculated”.

A spokesperson for ECC Ireland said: “When advertising pricing, Twitter must state the final price inclusive of VAT.”

The ECC network operates to advise consumers across borders and does not have the enforcement powers held by individual nations’ competition and pricing regulators.

In the UK, where Twitter Blue has been available since November, local laws require 20% VAT to be included in advertised prices.

People familiar with the UK’s competition regulator, the Competition and Markets Authority, told Insider that companies that do not include VAT in their advertised prices may be in breach of UK consumer protection regulations.

When contacted by Twitter Blue, the authority said it does not comment on individual businesses.

Twitter did not respond to Insider’s requests for comment.

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