The European Commission has fined X (formerly Twitter) €120 million for violating several transparency rules under the Digital Services Act (DSA). Notably, this is the Commission’s first formal non-compliance decision since the DSA came into force.
The US government has criticised the move, calling it unfair to American companies, while X owner Elon Musk responded to the announcement by writing “Bullshit” under a Commission post.
Henna Virkkunen, who is the European Commission’s Executive Vice-President for Tech Sovereignty, Security and Democracy, defended the decision, saying that the fine was proportionate and based on the nature, gravity, and duration of the violations.
“We are not here to impose the highest fines. We are here to make sure that our digital legislation is enforced and if you comply with our rules, you don’t get the fine. And it’s as simple as that,” she told reporters. “I think it’s very important to underline that DSA is having nothing to do with censorship,” she added.
According to the Commission, X misled users with the platform’s blue checkmark system, failed to maintain a transparent and accessible advertising repository, and blocked researchers from accessing public data: rights that very large online platforms (VLOPs) are required to provide under EU law.
Misleading Blue Checkmarks
The Commission said X used a deceptive design by allowing users to pay for the blue checkmark without proper identity verification. Regulators found that the “verified” badge could give a false impression of authenticity, exposing users to impersonation and scams.
Importantly, while the DSA does not force platforms to verify all users, it prohibits companies from presenting accounts as verified when no meaningful verification has occurred.
Advert Repository Lacking Required Information
The Commission also found that X’s advertising repository does not meet the transparency standards required by Article 39 of the DSA. Officials said the repository is slow, difficult to search, and missing basic details such as the content of ads, their topics, and the legal entities paying for them.
These gaps make it difficult for researchers, civil society groups, and the public to detect scams, hybrid threat campaigns, or coordinated misinformation campaigns.
In comparison, TikTok avoided a fine after agreeing to expand the transparency of its own ad library. As such, TikTok’s concessions showed that platforms can comply when they cooperate.
Blocking Research Access to Public Data
Under Article 40(12) of the DSA, VLOPs must allow eligible researchers access to public data to study systemic risks. However, the Commission says X actively restricted such access by banning independent scraping in its terms of service and by creating burdensome approval processes.
These barriers, regulators said, effectively undermine research into several systemic risks in the European Union.
Next Steps for X
X now has:
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- 60 working days to explain how it will fix the issues related to the deceptive checkmark design.
- 90 working days to submit an action plan addressing problems with its ad repository and public data access for researchers.
Once the action plan is submitted, the Board of Digital Services will have one month to review it, followed by another month for the Commission to make a final decision, and set a reasonable timeline for its implementation. If the company fails to comply, the Commission may impose additional periodic penalty payments.
Notably, DSA penalties can reach up to 6% of a company’s global annual revenue: meaning far larger fines remain possible if X does not meet the required standards.
Part of a Larger Investigation
These penalties stem from a broader investigation launched on December 18, 2023, when the Commission opened formal proceedings into whether X violated the DSA in areas such as content moderation, risk management, transparency, and dark patterns.
The initial probe looked into X’s handling of illegal content during Hamas’ attacks on Israel, its Community Notes fact-checking system, notification procedures for content moderation decisions, and the design of its platform interface. The Commission said the issues identified, if confirmed, could violate several DSA articles, including Articles 16, 25, 34, 35, 39, and 40.
Earlier, X was designated a VLOP in April 2023 after reporting 112 million monthly active EU users in February 2023. As a result, it has to comply with stricter obligations, including assessing systemic risks, taking steps to reduce harm, offering transparent ad systems, and allowing researchers to access data.
The investigation also continues into TikTok, Meta, and Temu: which face DSA charges ranging from public data access for researchers to illegal product listings. These parallel cases indicate that the EU intends to enforce the law consistently across platforms, regardless of their country of origin.
Investigation Continues
While the Commission has now issued a non-compliance decision on transparency-related violations, other parts of the 2023 investigation, particularly those related to illegal content and information manipulation remain open.
However, the latest fine has drawn political criticism in the US, with the country’s officials calling it an attack on American tech companies. For instance, US Secretary of State Marco Rubio wrote: “The European Commission’s $140 million fine isn’t just an attack on @X, it’s an attack on all American tech platforms and the American people by foreign governments.”
Meanwhile, US Federal Communications Commission Chairman, Brendan Carr similarly said that Europe is “fining a successful U.S. tech company for being a successful U.S. tech company”.
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