The European Union has levied its first-ever fine under the landmark Digital Services Act (DSA), targeting Elon Musk's social media platform X. The €120 million (USD 140 million) penalty centers on the platform's "deceptive design," particularly its paid verification system, marking a significant escalation in the bloc's efforts to regulate major online platforms and protect users from misleading practices.
The EU's Landmark Decision Against X
On December 5, 2025, the European Commission announced a fine of €120 million (approximately USD 140 million) against X for violating the Digital Services Act. This decision is historic, representing the first financial penalty issued under the DSA, a comprehensive law designed to curb illegal and harmful activities on large online platforms. The EU's tech chief, Henna Virkkunen, stated the ruling sends a clear message that "deceiving users with blue checkmarks, obscuring information on ads and shutting out researchers have no place online in the EU." The fine follows a formal investigation launched in December 2023, which found X non-compliant in several key areas of the DSA.
The Core Issue: "Deceptive" Blue Checkmarks
The central violation cited by the EU concerns X's verification system. Prior to Elon Musk's acquisition, the platform's blue checkmark was reserved for notable public figures, journalists, and organizations whose identities had been verified by the company. This system aimed to help users identify authentic sources and prevent impersonation. Under Musk's ownership, X transformed this into a paid subscription feature, allowing any user to obtain a "verified" badge simply by paying a monthly fee. The European Commission ruled that this constitutes a "deceptive design" or "dark pattern," falsely implying that an account's authenticity has been meaningfully vetted. This practice, the EU argues, makes it "difficult for users to judge the authenticity of accounts and content they engage with," potentially exposing them to fraud and scams.
The Evolution of X's Blue Checkmark
| Period | Policy | Purpose/Outcome |
|---|---|---|
| Pre-Musk (Twitter) | Reserved for verified notable figures, journalists, and organizations. | To authenticate identity, increase safety, and prevent impersonation. |
| Post-Musk (X) | Available to any user via a paid monthly subscription (X Premium). | Became a revenue stream; criticized for making authenticity harder to judge and deemed "deceptive" by the EU. |
Additional Violations and Required Actions
Beyond the blue checkmark issue, the EU's investigation found X lacking in advertising transparency and in its provision of data access to researchers. The platform was criticized for obscuring information in its ad repository, a tool meant to help researchers and civil society detect malicious advertising, scams, and coordinated influence operations. X also failed to comply with DSA rules mandating that vetted researchers be granted access to public platform data. As a result of the ruling, X now has 60 working days to inform the EU of the measures it will take to rectify the deceptive use of blue checkmarks. It has 90 days to outline fixes for the advertising and data access violations. Failure to meet these deadlines could trigger additional penalty payments from the company.
Key Financial and Regulatory Details
- Fine Amount: €120 million (approximately USD 140 million)
- Legal Basis: Violation of the EU's Digital Services Act (DSA)
- Maximum DSA Penalty: Up to 6% of a company's global annual revenue.
- X's Revenue Context: Estimated at USD 2.5 billion in 2024 (down from over USD 5 billion in 2021 for the former Twitter).
- Compliance Deadlines:
- 60 working days: To inform the EU of plans to fix the "deceptive" blue checkmark system.
- 90 days: To outline fixes for advertising transparency and data access for researchers.
Financial and Political Context of the Fine
The DSA allows for fines of up to 6% of a company's global annual revenue. As X is now a private company, its exact financials are not public, making the potential maximum penalty unclear. Industry analysts estimate X's revenue was around USD 2.5 billion in 2024, a significant drop from the over USD 5 billion reported by Twitter in 2021. The €120 million fine, while substantial, is viewed in the context of X's broader financial struggles and Musk's vast personal wealth. According to reports, European regulators deliberated carefully on the fine's size, seeking to make an example of X as a warning to other tech giants while weighing potential political ramifications, including retaliation from the U.S. administration amid ongoing trade disputes.
Ongoing Scrutiny and the Future for X
This fine is not the end of X's regulatory challenges in Europe. The broader DSA investigation launched in 2023, which scrutinizes the platform's content moderation practices and the spread of illegal content, remains ongoing and could lead to further penalties. The EU has repeatedly criticized X for rising disinformation levels since Musk's takeover. The platform now faces a critical juncture: it must swiftly implement the demanded changes to its verification and transparency systems to avoid more fines, all while navigating continued regulatory pressure. This landmark decision firmly establishes the DSA as a powerful tool for EU enforcement and sets a precedent for how major online platforms will be held accountable for their design and operational choices.