🇪🇺 Clash of Titans: X Fined €120M Under DSA, Musk Calls for EU's Abolition
The simmering tensions between Elon Musk's X (formerly Twitter) and the European Union have erupted into an open regulatory war following the EU's decision to levy a massive €120 million fine on the social media platform. This landmark penalty, the first non-compliance decision under the EU's flagship Digital Services Act (DSA), has been met with defiance from Musk, who publicly called for the abolition of the EU, and a retaliatory act by X, which revoked the European Commission's advertising account.
📜 Background on the Digital Services Act (DSA)
The DSA is a comprehensive EU regulation designed to create a safer, more predictable, and more transparent online environment. It imposes sweeping obligations on Very Large Online Platforms (VLOPs), such as X (defined as those with over 45 million EU users), particularly concerning the moderation of illegal content, the protection of users, and the operation of their algorithmic systems.
The core principle underpinning the fine is transparency and accountability. The DSA grants the European Commission (EC) direct supervisory and enforcement power over VLOPs, allowing it to issue hefty penalties of up to 6% of a platform's annual global revenue for non-compliance.
🔍 What the Commission Found: The Three Core Breaches
The EC's decision to fine X stemmed from a two-year investigation that identified three critical violations of the DSA's transparency and user protection requirements:
- Deceptive Blue Check Verification: The Commission found the platform's paid "blue checkmark" system to be deceptive. The practice of allowing any user to pay for the "verified" badge without meaningful identity checks violates the DSA's prohibition on deceptive design practices. The EC argues this misleads users, making it difficult to discern account authenticity and exposing the public to scams, impersonation, and manipulation.
- Ad Transparency Opacity (Article 39): X's advertising repository was deemed insufficient in meeting the DSA's transparency and accessibility requirements. The platform was found to incorporate design and access barriers—such as excessive delays—and to lack critical information required for public scrutiny, including the content/topic of the ad and the legal entity paying for it.
- Restricted Researcher Access (Article 40): The EC concluded that X failed to provide eligible researchers with adequate access to public data for independent study into systemic risks (like disinformation or scams), citing X's terms of service that prohibit the scraping of public data.
X has been given strict deadlines: 60 working days to address the blue-check issue and 90 working days to submit remediation plans for the advertising repository and researcher access deficiencies. Failure to comply could trigger escalating periodic penalty payments.
💥 X's Response and Tactics
Elon Musk reacted to the fine with immediate and sharp public defiance, posting on X that the fine was "bulls***" and calling for the "EU to be abolished"—a sentiment he claimed was motivated by the bloc's "tyrannical unelected bureaucracy."
In an unprecedented corporate move, X retaliated directly against the European Commission by revoking its advertising account. X's Head of Product publicly confirmed the suspension, accusing the Commission of attempting to exploit a bug in X's "Ad Composer" tool to artificially boost the visibility of the post announcing the fine. The EC acknowledged the suspension, describing it as a retaliatory act that undermines the dialogue between regulators and platforms.
🗣️ Political and Public Reactions
The ruling has intensified a broader political debate:
- EU Officials: The EC defended the action, with officials emphasizing that the DSA is not about censorship but about enforcing transparency, traceability, and accountability. They stressed that the fine was a necessary step to hold a VLOP responsible for undermining user safety.
- U.S. Politicians: Prominent U.S. political figures, particularly those aligned with the previous administration, denounced the fine as regulatory overreach and an "attack on all American tech platforms." They framed the penalty as an attempt to restrict free expression and tax American tech success abroad.
- Researchers/Civil Society: Groups focused on platform accountability and digital rights welcomed the decision, specifically citing the fine for restricting researcher access as critical for independent oversight of systemic risks like political disinformation.
⚖️ Legal and Commercial Implications
This first major DSA non-compliance fine sets a significant precedent, sending a clear message to all VLOPs that the EU is serious about enforcement.
- Compliance Costs: X will face immediate and potentially significant costs in overhauling its systems, especially its blue checkmark design and ad repository, to meet EU standards.
- Escalation Risk: By choosing a confrontational rather than cooperative stance, X risks an escalation of penalties. The EC could impose further, higher fines if the company fails to meet the compliance deadlines, which could pose a substantial financial threat given the possible 6% of global annual revenue maximum penalty.
- Global Precedent: The DSA is closely watched globally. The EC's successful enforcement could encourage other jurisdictions, including the US, to adopt similarly stringent regulation for digital platforms.
The coming weeks will be crucial as X's deadlines approach, determining whether the platform will engage in a court battle or grudgingly comply with the EU’s landmark digital rulebook.
