The European Commission just slammed X with a €140 million fine for violating the Digital Services Act, marking the first major penalty under the EU's sweeping tech regulation. The fine targets the platform's 'deceptive' blue checkmark system and failure to meet transparency requirements, escalating regulatory pressure on Elon Musk's social media empire.
The European Union just delivered its first major blow under the Digital Services Act, hitting X with a staggering €140 million fine that puts every social media platform on notice. The penalty targets what regulators call 'deceptive practices' around the platform's blue checkmark verification system - a cornerstone of Musk's monetization strategy since acquiring Twitter for $44 billion.
The fine represents a watershed moment for EU tech regulation. Since the DSA took effect in August 2023, regulators have been building cases against major platforms, but this marks the first time they've wielded their most powerful weapon: financial penalties that can reach up to 6% of global annual revenue. For context, that ceiling would translate to roughly $180 million for X based on estimated revenues.
At issue is X's overhaul of Twitter's verification system, which traditionally marked authentic accounts of public figures with blue checkmarks. Under Musk's leadership, the platform transformed verification into a paid subscription service through X Premium, allowing anyone to purchase the blue badge for $8 monthly. EU regulators argue this fundamentally misled users about account authenticity and credibility.
The 'deceptive' label carries particular sting because it strikes at the heart of X's business model transformation. When Musk took over Twitter, he immediately targeted the verification system as elitist and undemocratic. "Power to the people! Blue for $8/month," he posted in November 2022, launching the paid verification that European regulators now deem misleading.
Beyond verification issues, the Commission cited X's failure to meet DSA transparency obligations. The law requires platforms to publish detailed reports about content moderation decisions, algorithmic systems, and risk assessments. X has struggled to maintain the compliance infrastructure that Twitter's previous management had built, particularly after laying off roughly 80% of staff following Musk's acquisition.
This enforcement action puts X in uniquely precarious territory compared to other U.S. tech giants operating in Europe. While Meta, Google, and have invested heavily in EU compliance teams, X has taken a more confrontational approach to regulation. The platform briefly pulled out of the EU's voluntary Code of Practice on Disinformation in May 2023, though it later rejoined.
