The European Union has imposed a €120 million penalty on Elon Musk’s platform X for breaching key transparency requirements under the Digital Services Act—marking the first major enforcement action of its kind and sparking fresh friction with Washington. Regulators said X violated the rules through the “deceptive design” of its blue checkmark system and by failing to clearly disclose information about advertising and researcher access to public data.
“This decision is about X’s transparency obligations and has nothing to do with censorship,” said EU tech chief Henna Virkkunen, responding to criticism from U.S. Vice President JD Vance. Even before the ruling was public, Vance accused Europe of “attacking American companies over garbage,” prompting Musk to reply, “Much appreciated.”
The investigation, launched in December 2023, concluded that X failed to meaningfully verify user identities following Musk’s overhaul of the platform’s verification system. Under the new setup, “anyone can pay” for a blue badge, the commission said, leaving users vulnerable to impersonation, scams, fraud, and manipulation.
Regulators also found that X did not comply with transparency rules regarding political and commercial ads and failed to provide researchers with the level of data access required by the DSA. Other parts of the broader inquiry—covering illegal content and information manipulation—are still underway.
The case had seemed to stall amid concerns about U.S. backlash, especially after Donald Trump returned to the White House and Musk regained influence in Washington. Nevertheless, Brussels proceeded, with Virkkunen stressing that the fine was “proportionate” to the violations. “We are not here to impose the highest fines,” she said. “We are here to make sure our digital laws are upheld.”
Under the DSA, companies can face penalties of up to six percent of their global annual revenue. The EU could have calculated the fine based on Musk’s wider business holdings, including Tesla, but settled on what is seen as a measured amount.
Advocacy group the Center for Countering Digital Hate welcomed the ruling, saying it proves “no tech platform is above the laws all corporations must follow.” France’s digital affairs minister, Anne Le Henanff, hailed the move as “historic,” showing Europe can “turn words into action.”
The White House has repeatedly criticized the EU’s regulatory stance. U.S. Commerce Secretary Howard Lutnick recently urged Brussels to reconsider its digital framework if it wants progress on lowering steel tariffs. A national security strategy released Friday by the Trump administration called on Europe to “abandon its failed focus on regulatory suffocation.”
Separately, the commission said it had accepted commitments from TikTok to improve advertising transparency, though the Chinese-owned platform remains under investigation for other DSA-related issues. EU officials insisted that U.S. political pressure played no role in the X decision and emphasized that ensuring a solid legal foundation for enforcement was their top priority.
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