The European Union has imposed a €120 million fine on Elon Musk's social-media platform X, marking the first major enforcement action under the bloc's Digital Services Act and escalating tensions between Brussels and U.S. technology firms. The penalty follows a two-year investigation into the platform's redesign of its blue check verification system and its handling of advertising transparency and data access for researchers.
The European Commission said on Dec. 5 that X violated multiple provisions of the Digital Services Act, which governs large online platforms operating in the EU. Officials said the company failed to meet transparency obligations designed to protect users from deception and manipulation, particularly after it began selling blue checkmarks to subscribers rather than reserving them for verified identities.
At the center of the ruling is the commission's finding that the blue checkmark system misleads users about the authenticity of accounts. Regulators said the redesign exposed users to impersonation and fraud by blurring distinctions between verified identities and paid subscribers. "This deception exposes users to scams, including impersonation frauds, as well as other forms of manipulation by malicious actors," the commission said in its decision.
The enforcement action also cited shortcomings in X's advertising repository, which regulators said lacked sufficient detail about ad content and the entities financing campaigns. According to the commission, delays and missing information undermined the database's purpose of enabling public and academic scrutiny of political and commercial influence operations.
In addition, regulators concluded that X restricted external researchers' access to platform data, limiting independent analysis of risks such as misinformation and systemic manipulation. The commission said such barriers run counter to the Digital Services Act's objective of increasing transparency and accountability for very large online platforms.
European Commission Vice President Henna Virkkunen said the ruling was meant to reinforce baseline standards across the bloc. "Deceiving users with blue checkmarks, obscuring information on ads and shutting out researchers have no place online in the EU," she said, adding that enforcement was aimed at safeguarding users rather than suppressing innovation.
Under the decision, X has 60 working days to propose measures to correct the misleading verification design and 90 working days to submit action plans addressing advertising transparency and data access. Failure to comply could trigger additional penalties, including periodic fines.
The case represents the most consequential application to date of the Digital Services Act, which took effect in 2024 and applies heightened obligations to so-called very large online platforms. The law gives Brussels broad authority to impose financial penalties and operational remedies on companies deemed to pose systemic risks.
Musk responded publicly on his platform following the announcement, using profanity to criticize the European Union and suggesting it should be dismantled, a reaction that added to growing friction between U.S. tech executives and European regulators. Shortly afterward, X disabled the European Commission's advertising account, citing misuse of advertising tools, a claim EU officials rejected.
