The European Union has officially issued a substantial financial penalty of €120 million, equivalent to approximately $140 million, against Elon Musk’s social media company X for breaching the bloc’s comprehensive digital service framework. The sanction arises from multiple violations of the Digital Services Act (DSA), particularly focusing on what regulators termed the platform’s “deceptive design” in relation to its blue checkmark verification system. This announcement, delivered today, carries historical significance, as it represents the first time that any company has been fined under the EU’s landmark legislation aimed at curbing illegal and harmful activities circulating within online platforms. The decision follows a detailed and multifaceted inquiry launched by EU authorities in December 2023 to scrutinize how X has managed its compliance with these far-reaching digital service standards.
Henna Virkkunen, the EU’s Commissioner for Technology, emphasized in her official statement that deceptive tactics—such as misleading users through the appearance of authenticity granted by the blue checkmarks, obscuring critical information about advertising content, and restricting academic researchers from accessing essential data—are practices that have no legitimate place in Europe’s online environment. She further elaborated that the very essence of the DSA lies in preserving user protection, creating transparent mechanisms for verifying information, and reinstating public confidence in the digital ecosystem. According to Virkkunen, by enforcing this first non-compliance ruling, the EU seeks to hold X publicly accountable for practices that violate user rights and postpone genuine accountability within its operations.
The European Commission had already determined in July 2024, through preliminary assessments, that X had failed to fulfill several key obligations established by the DSA. These included maintaining transparency in advertising campaigns, offering equitable data access for independent researchers, and removing manipulative design features, often referred to as “dark patterns,” which are interface strategies deliberately crafted to mislead or coerce user behavior. Among these identified issues, X’s approach to the blue checkmark system stood out specifically. The EU found that by allowing any user to purchase a verification mark, the company blurred the distinction between reliable and anonymous accounts, thereby eroding the platform’s credibility and making it significantly more difficult for users to discern authentic sources from impersonators or misinformation agents.
Under the DSA, the European Union reserves the authority to impose fines that may reach as high as six percent of a company’s global annual revenue. However, determining the exact upper limit in this particular case has proven complicated. X, a privately held enterprise, was originally acquired by Elon Musk in October 2022 for $44 billion and was later reacquired by his artificial intelligence company, X AI, in March 2025 for $33 billion. These shifts in ownership structure have made it unclear what the company’s full revenue base is, and hence, what its theoretical maximum penalty might have been. Nonetheless, X retains the legal right to appeal the EU’s decision before the bloc’s courts or to negotiate a settlement agreement by enacting reforms that bring its operations in line with DSA regulatory expectations.
Behind closed doors, European lawmakers engaged in extensive deliberations over the size and implications of the fine. Reports from *The New York Times* suggested that regulators sought to craft the penalty not merely as punishment but as a powerful deterrent—a symbolic action meant to signal to other global technology firms that the EU’s commitment to responsible digital governance is real and enforceable. Yet, this push for assertive regulation came with its diplomatic challenges. Lawmakers reportedly weighed whether such a stern approach could provoke retaliatory trade or political responses from U.S. President Donald Trump, especially amid ongoing disputes concerning European trade policy and American technology exports. According to sources, Musk—alongside other U.S. technology executives—has privately encouraged the President to confront the European Union’s perceived overreach, arguing that such enforcement measures unfairly target American innovation and competitiveness.
The European Commission’s investigation, which began in 2023 and continues to unfold, also delves deeply into X’s broader moderation methods and its handling of illegal or harmful online content. This examination seeks to determine the extent to which X’s platform governance enables the spread of misinformation, hate speech, or other harmful material, and may yet result in additional sanctions depending on its findings.
EU leaders have been increasingly vocal in their criticism of X, especially since Musk’s acquisition of the platform. They have pointed to an observable surge in disinformation and politicized content promoted through the service. In January, members of the European Parliament vowed to intensify the scrutiny of X, issuing a pledge to “energetically” advance the ongoing investigation in response to Musk’s online endorsement of the leader of Germany’s far-right political movement. Beyond this instance, Musk has repeatedly used his personal account and the platform’s influence to express support for far-right figures globally, igniting controversy and raising questions about the neutrality and responsibility of large-scale digital intermediaries. These concerns were further amplified when Musk drew international criticism by performing a controversial gesture during his speech at President Trump’s inauguration, an act that many perceived as symbolic of the deepening entanglement between political extremism and influential online networks.
In its totality, the European Union’s fine represents more than a mere financial reprimand—it constitutes a defining moment in the enforcement of the Digital Services Act and signals a new era of accountability for technology companies operating within Europe. It underscores Brussels’ intention to ensure that large digital platforms cannot evade transparency and fairness, reinvigorating Europe’s commitment to a safer, more trustworthy digital public sphere.
Sourse: https://www.theverge.com/news/645154/eu-fines-x-dsa-violations-xai-elon-musk
