In a landmark decision that underscores the European Union's commitment to regulating the digital space, the European Commission has fined Elon Musk's social media platform X (formerly Twitter) €120 million for violating the Digital Services Act (DSA). This marks the first instance of the EU issuing a non-compliance decision under the DSA, signaling a firm stance against platforms that fail to adhere to the bloc's stringent online governance rules.
The EU's investigation, initiated two years prior, concluded that X had breached transparency obligations under the DSA in three key areas. A significant portion of the fine, €45 million, was levied due to the "deceptive design" of X's blue checkmark system. The Commission found that by allowing anyone to purchase verification, X made it difficult for users to determine the authenticity of accounts, potentially exposing them to scams and manipulation.
Another €35 million was imposed for X's failure to provide sufficient transparency in its advertising repository. The EU requires platforms to maintain a public list of advertisers, including details on who paid for the ads and their intended audience, to guard against illegal scams, fake advertisements, and coordinated disinformation campaigns, especially in the context of political elections. The commission stated that X's database had "access barriers", lacked "critical information" and imposed "excessive delays in processing, which undermine the purpose of ad repositories". Finally, X was fined €40 million for obstructing researchers' access to public data, hindering their ability to monitor contentious issues such as political content.
The Digital Services Act, enacted in 2022, is a sweeping rulebook that aims to protect European users by requiring online platforms to take greater responsibility for the content and products hosted on their sites. It applies to all online intermediaries operating in the EU, with stricter obligations for Very Large Online Platforms (VLOPs) like X. Under the DSA, the Commission can fine companies up to 6% of their global turnover for violations.
The EU's action against X has sparked considerable debate, particularly regarding its potential impact on transatlantic relations. Some U.S. figures have criticized the EU's digital regulations, claiming they unfairly target American tech companies and amount to censorship. U.S. Secretary of State Marco Rubio described the fine as "an attack on all American tech platforms and the American people," while Vice President JD Vance accused the Commission of seeking to fine X "for not engaging in censorship".
Despite these criticisms, EU officials maintain that the DSA is not intended to stifle free speech or target specific companies. A Commission spokesperson asserted that the EU has the sovereign right to legislate and enforce its laws on foreign companies operating within its jurisdiction. Tech Commissioner Henna Virkkunen stated that the fine reflected "the nature of the infringement, the gravity of the breach for EU users, and the duration" of the violations.
The fine against X may have broader implications for other tech companies operating in Europe. The EU has previously found TikTok and Meta in breach of DSA transparency rules. This decision sets a precedent for how European regulators will interpret and enforce DSA transparency obligations. The Commission's willingness to impose substantial financial penalties signals that transparency shortcomings will not be tolerated and that platforms must prioritize compliance with EU regulations.
While X could have faced a far higher penalty of up to 6% of its global revenue, the €120 million fine is a clear message that the EU is serious about enforcing its digital regulations. It remains to be seen how X will respond to the fine and whether it will make the necessary changes to comply with the DSA. The European Commission is continuing other investigations it opened on the platform almost two years ago.
