First DSA strike: EU fines Elon Musk’s X €120 million for breaching digital laws

The European Commission has delivered its first major enforcement action under the landmark Digital Services Act (DSA), slapping a €120 million ($140 million) fine on Elon Musk’s social media platform, X. The penalty follows a two-year investigation that found X in breach of key transparency and user protection obligations.

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The ruling is set to escalate the ongoing transatlantic tension over digital regulation, with Musk and some US officials immediately denouncing the fine as an attack on free speech.

Three core violations under the DSA

The European Commission’s decision found X guilty of three distinct violations, all related to transparency and accountability requirements for very large online platforms (VLOPs):

• Deceptive blue checkmarks (€45M): Regulators ruled that X's paid verification system, where users can buy the blue checkmark without meaningful identity verification, amounts to "deceptive design." This practice, the Commission stated, makes it difficult for users to judge account authenticity, exposing them to scams, impersonation fraud, and manipulation.

• Ad transparency failure (€35M): X failed to maintain a transparent and accessible advertising repository as required by the DSA. Regulators found that the company's ad library lacked critical information, such as who paid for the ads and what their content was.

• Blocking researchers (€40M): The platform was penalized for creating unnecessary barriers for independent researchers seeking access to public data, undermining the DSA’s goal of enabling external analysis of systemic risks like misinformation.

Executive Vice-President Henna Virkkunen, responsible for tech regulation, stated: "Deceiving users with blue checkmarks, obscuring information on ads, and shutting out researchers have no place online in the EU. With the DSA's first non-compliance decision, we are holding X responsible for undermining users' rights and evading accountability."

A geopolitical flashpoint

Musk swiftly reacted to the news on his platform, pinning a comment that framed the issue as a geopolitical conflict over platform control. The fine has drawn sharp criticism from some US political figures, who accused Brussels of targeting American companies.

Despite the political fallout, the EU defended its action, emphasizing that the DSA is a rulebook for platform transparency and accountability, applied equally to all large platforms operating within the bloc, and is not a measure of content censorship.

X now has 60 working days to submit a plan to address the deceptive blue checkmark system and 90 days to develop an action plan to fix the advertising and researcher data access issues. Failure to comply could result in additional periodic penalties of up to 6% of X's global annual revenue.