EU Fines Elon Musk's X $140 Million for Digital Services Act Violations Amid US-EU Tensions

The European Union imposed a 120-million-euro ($140-million) fine on Elon Musk's X platform Friday for violating its digital rules, triggering strong criticism from Washington officials.

This high-profile investigation into the social media platform served as a critical test of the EU's determination to regulate Big Tech companies. Before the penalty was officially announced, US Vice President JD Vance had already expressed concerns about "attacking" American companies through what he termed "censorship".

Following Brussels' announcement of the fine, US Secretary of State Marco Rubio intensified the criticism, declaring on X: "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. The days of censoring Americans online are over."

This marks the first financial penalty imposed by the European Commission under its Digital Services Act (DSA) related to content regulations.

According to the Commission's statement, X violated the DSA's transparency requirements in multiple ways. These violations include misleading design elements of its "blue checkmark" verification system and failing to provide researchers with proper access to public data.

EU Technology Commissioner Henna Virkkunen clarified to reporters that "This decision is about the transparency of X" and has "nothing to do with censorship," directly countering Washington's characterization of the action.

In a post on X Thursday, Vance had advised the EU that it "should be supporting free speech not attacking American companies over garbage" – a statement to which Musk responded with "Much appreciated".

The EU's formal DSA investigation into Musk's platform began in December 2023, and by July 2024, officials determined that X had violated regulations on multiple counts.

The European Commission found that modifications to the platform's checkmark verification system following Musk's 2022 takeover meant that "anyone can pay" to receive a badge of authenticity without X "meaningfully verifying who is behind the account".

"This deception exposes users to scams, including impersonation frauds, as well as other forms of manipulation by malicious actors," the Commission explained in its statement.

Additionally, X failed to maintain sufficient transparency regarding its advertising practices and did not provide researchers with access to public data as required by DSA regulations.

The platform remains under investigation regarding its handling of illegal content and information manipulation.

The first phase of the X investigation appeared to have stalled since last year, with no progress on imposing penalties. EU officials likely considered the changing political landscape in the United States – dramatically different from 2023 – following Trump's return to the presidency with Musk's initial support.

Despite their subsequent falling out, Musk has recently reappeared in White House circles, forcing Brussels to consider how any fine against X might exacerbate tensions with the Trump administration.

The DSA grants the EU authority to fine companies up to six percent of their global annual revenue – and in X's case, regulators could potentially have based calculations on Musk's entire business empire, including Tesla.

Brussels ultimately settled on what could be considered a moderate sum relative to X's influence, though Virkkunen told reporters the amount was "proportionate" to the specific violations.

"We are not here to impose the highest fines," the tech chief explained. "We are here to make sure that our digital legislation is enforced. If you comply with our rules, you don't get a fine – and it's as simple as that."

She emphasized that this penalty represents just one component of a "very broad investigation" into X that remains ongoing.

The Center for Countering Digital Hate advocacy group commented that the EU's action "sends a message that no tech platform is above the laws all corporations have to abide by".

Washington has clearly expressed its disapproval of EU tech regulations. A new national security strategy released Friday by the Trump administration urges Europe to "abandon its failed focus on regulatory suffocation".

France's digital affairs minister Anne Le Henanff praised the EU's "historic" decision, stating: "By sanctioning X, Europe shows it is capable of moving from words to action."

Germany's digital minister Karsten Wildberger affirmed that the bloc's digital rules "apply to everyone, no matter where they come from".

Concurrent with the X penalty, the Commission announced it had accepted commitments from TikTok to address concerns regarding its advertising system, though the Chinese-owned platform remains under DSA investigation for other issues.