Twitter's premium service has been accused of breaking European Union rules, a snag for new owner Elon Musk's plans for making the platform profitable.
Twitter Blue, the premium service advertised by Musk, is breaking European rules by failing to show its total cost to consumers right away, according to regional regulators. The app failed to attach details about value-added tax, a European sales tax that may differ based on country. The tax can average between a 19% and 21% additional cost on top of the initial price.
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This failure to attach details about the value-added tax, or VAT, is a breach of the EU's "unfair business-to-consumer commercial practices" directive, a spokesperson from the European Consumer Centre told Insider.
The ECC is a network of organizations advising consumers but lacking enforcement powers for penalizing companies. That is left to local lawmakers to enforce since the rules differ from country to country. For example, the United Kingdom requires a 20% value-added tax to be listed in its advertising prices.
"When advertising the pricing, Twitter should state the final VAT-inclusive price," the spokesperson said.
Musk fired thousands of staff in November, leaving several vital offices understaffed for months. Staffing issues were exacerbated after the billionaire asked employees to sign on to work at a "hardcore" Twitter or to resign with benefits. Hundreds of staff left in response. More have been laid off since. Musk fired at least one employee after he was told that his popularity was diminishing.
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Musk has been attempting to get the situation under control and has sought new forms of revenue. For example, the company updated its advertising policy on Feb. 16 to allow marijuana advertisers to post ads on Twitter under limited circumstances.
Twitter did not respond to requests for comment from the Washington Examiner. Its media relations team was dismissed by Musk.