🇪🇺 EU Fines Elon Musk’s X €120 Million ($140M) Over Digital Services Act Violations
The European Union has imposed a significant €120 million (approximately $140 million) fine on Elon Musk’s social media platform X (formerly Twitter), marking the first major non-compliance decision under the EU’s landmark Digital Services Act (DSA).
The fine follows a two-year investigation by the European Commission, the EU’s executive arm, which found that X breached several key transparency obligations designed to protect users and ensure accountability on very large online platforms.
This ruling sends a strong signal that the EU is committed to vigorously enforcing its new digital rulebook, which requires major platforms to take greater responsibility for policing illegal and harmful content, ensuring transparency, and protecting user rights.
Breakdown of the Key Violations Under the DSA
The European Commission identified three primary areas where X was found to be in violation of the Digital Services Act’s transparency requirements:
1. Deceptive Design of the “Blue Checkmark”
The Commission determined that X’s paid verification system constitutes a “deceptive design practice” (Article 25(1) DSA).
- The Issue: The current system allows any user to pay for a “verified” blue checkmark without X meaningfully verifying the individual or entity behind the account.
- The Harm: This makes it extremely difficult for users to judge the authenticity of accounts and content they engage with, potentially exposing them to scams, impersonation fraud, and other forms of manipulation by malicious actors.
- The Commission’s Stance: While the DSA does not mandate user verification, it strictly prohibits platforms from falsely claiming that users have been verified when no such verification has taken place.
2. Lack of Transparency in the Advertising Repository
X’s advertisement repository, which is meant to provide public oversight of online ads, was found to be non-compliant with the DSA’s transparency and accessibility requirements (Article 39 DSA).
- The DSA Requirement: Platforms must maintain an accessible and searchable database of all digital ads, including information on who paid for them and the intended audience. This is crucial for researchers and the public to detect political influence campaigns, coordinated information operations, and scam advertisements.
- The X Violation: The Commission found that X’s repository is undermined by:
- Design barriers and access issues, such as excessive delays in processing requests.
- Lack of critical information, including the content, topic of the advertisement, and the legal entity paying for it.
- The Consequence: These failures hinder the public and independent scrutiny of potential risks in online advertising on the platform.
3. Failure to Provide Researchers Access to Public Data
The EU determined that X has imposed “unnecessary barriers” on eligible researchers seeking access to the platform’s public data (Article 40(12) DSA).
- The DSA Requirement: The Act mandates that very large online platforms provide access to public data to independent researchers to allow for the study of systemic risks faced by European users, such as the spread of misinformation and illegal content.
- The X Violation: The Commission cited X’s terms of service prohibiting eligible researchers from independently accessing its public data (including through scraping) and its bureaucratic processes that impose barriers.
- The Consequence: This failure effectively weakens independent research into systemic risks, limiting the oversight required by the DSA.
The Fine and Next Steps
The €120 million fine was calculated based on the nature, gravity (in terms of affected EU users), and duration of the infringements. Under the DSA, companies can face penalties of up to 6% of their annual global revenue for serious violations, suggesting the EU has significant leverage for future enforcement actions.
The European Commission has set strict deadlines for X to comply with the ruling:
- 60 working days: To inform the Commission of specific measures to end the infringement related to the deceptive blue checkmark.
- 90 working days: To submit an action plan outlining necessary measures to address the issues with the advertising repository and researcher data access.
Failure to comply with these deadlines and the decision could lead to additional, significant periodic penalty payments.
Political Reaction and Context
The ruling has sparked a degree of transatlantic tension, with some U.S. officials criticizing the EU’s actions as unfairly targeting American tech companies and suggesting it infringes upon free speech principles.
- EU Response: European officials, including the Executive Vice-President for tech policy, Henna Virkkunen, strongly denied that the fine was about censorship. She stated: “Deceiving users with blue checkmarks, obscuring information on ads and shutting out researchers have no place online in the EU. The DSA protects users.”
- U.S. Counterpoint: Ahead of the decision, U.S. Vice President JD Vance criticized the EU, and Secretary of State Marco Rubio called the fine “an attack on all American tech platforms and the American people by foreign governments.” Elon Musk publicly agreed with the U.S. officials’ sentiments.
This decision is the first non-compliance sanction under the DSA and is part of broader ongoing investigations by the European Commission into X regarding the dissemination of illegal content and the platform’s measures to combat information manipulation. Separate investigations are also underway for other major platforms like Meta and TikTok.
I can provide a more in-depth, multi-section article that expands on the history of the DSA, the specific articles X violated, and the potential long-term implications for global tech regulation.
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