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The European Union on Friday fined Elon Musk’s social media company X €120 million ($140 million) for violating its landmark Digital Services Act, marking the bloc’s first-ever enforcement action under the sweeping digital regulation.
The European Commission said X broke EU rules by misleading users with its “deceptive design” of the blue checkmark system, failing to meet transparency obligations for its advertising repository, and blocking researchers from accessing public data.
The decision came amid growing transatlantic tensions over digital regulation, with U.S. Vice President JD Vance preemptively warning the EU not to “attack American companies over garbage,” prompting Musk to respond, “Much appreciated.”
The probe, launched in December 2023 and preliminarily concluded in July 2024, focused on changes Musk made after acquiring Twitter in 2022. The Commission found that the updated checkmark system allowed anyone to pay for a verification badge, eroding its intended function as a marker of authenticity.
Officials also said X failed to be sufficiently transparent about its advertising operations and did not grant academic researchers access to public platform data, as mandated under the DSA.
X now has 60 working days to reform its checkmark system and 90 days to submit an action plan for ad transparency and research access. Failure to comply may lead to additional penalties.
Henna Virkkunen, the EU’s tech chief, rejected claims that the decision was politically motivated.
“This decision is about the transparency of X. It has nothing to do with censorship,” she told reporters.
Despite warnings from Washington, including recent remarks from Commerce Secretary Howard Lutnick linking the DSA to trade talks, Virkkunen said the fine was proportionate and legally sound.
“We are not here to impose the highest fines. We are here to make sure that our digital legislation is enforced,” she said. “If you comply with our rules, you don’t get a fine—and it’s as simple as that.”
The case has highlighted the growing divide between Brussels and Washington over how to regulate Big Tech.
The Trump administration has criticized the DSA as a form of regulatory overreach, and its new national security strategy urged Europe to “abandon its failed focus on regulatory suffocation.”
Musk, who has re-emerged as a political ally in Trump’s inner circle despite earlier friction, remains a lightning rod in U.S.-EU tech disputes. The EU’s enforcement decision risks reigniting friction between Brussels and the White House.
The DSA empowers the Commission to fine platforms up to 6% of their global annual revenue. Although it could have based the fine on Musk’s entire business empire, including Tesla, Brussels opted for a relatively moderate sum focused on the violations by X.
The Commission emphasized that Friday’s fine addressed only a portion of the ongoing investigation into X. The platform is still under scrutiny for its handling of illegal content and disinformation.
“This is just one part of a very broad investigation,” Virkkunen said.
The announcement came as the Commission also confirmed it had accepted commitments from TikTok to address separate ad transparency concerns under the DSA. The Chinese-owned platform remains under investigation for other issues.
EU officials stressed that decisions are based on the law, not political pressures.
“We are focused on building a safe digital space in line with our laws,” said Virkkunen. “Europe has a sovereign right to enforce its rules.”
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