X Receives €120 Million Penalty for Transparency Violations in Europe
The European Commission fined X €120 million ($140 million) on Friday for breaching transparency requirements under the Digital Services Act. According to CNBC, this represents the first non-compliance decision issued under the legislation adopted in 2022. The penalty targets three specific violations: deceptive design of the platform's paid verification system, inadequate advertising transparency, and restricted researcher access to public data.
The investigation began two years ago and concluded that X's blue checkmark system misleads users about account authenticity. After Elon Musk acquired the platform in 2022, the verification badge changed from a credential for notable figures to a subscription service available for $8 monthly. The Commission stated this makes it difficult for users to judge the authenticity of accounts and content they encounter.
X now has 60 days to present a plan addressing the blue checkmark issues and 90 days to resolve problems with its advertising repository and researcher data access. The Commission warned that failure to comply could result in periodic penalty payments.
Financial Impact and Platform Obligations
The fine amount reflects X's advertising revenue rather than Elon Musk's broader business empire. Bloomberg reports that X is expected to generate approximately $2.3 billion in advertising sales in 2025, compared to SpaceX's projected $15.5 billion revenue. Regulators initially considered basing the fine on Musk's entire private business holdings but ultimately limited the calculation to the platform's own financial performance.
The penalty represents 5.2% of X's expected 2025 advertising revenue. While modest compared to Musk's $467 billion personal wealth, the decision establishes a precedent for Digital Services Act enforcement. Platforms can face fines up to 6% of global annual revenue for repeated violations.
The advertising transparency requirement mandates that platforms maintain databases showing who paid for advertisements and their intended audience. This helps researchers identify scams, fake advertisements, and coordinated influence campaigns. X's database contains design features and access barriers that create excessive processing delays, according to regulators.
Precedent for Tech Sector Regulation
This penalty establishes how European authorities will enforce digital content rules across the technology sector. Reuters notes that the Digital Services Act applies to all online platforms operating in the European Union, with stricter requirements for Very Large Online Platforms serving over 45 million active European users.
The case arrives during heightened tensions between Washington and Brussels over technology regulation. United States Vice President JD Vance criticized the European Union on Thursday, stating the bloc should support free speech rather than targeting American companies. Musk responded with appreciation for the comment. President Donald Trump has repeatedly condemned European fines against American technology firms, describing them as discriminatory and disproportionate.
According to TechPolicy.Press, the Trump administration ordered State Department officials in August 2025 to regularly engage with European governments about Digital Services Act concerns. The administration designated the legislation as a foreign trade barrier and has threatened retaliatory tariffs against countries maintaining digital regulations affecting American companies.
European Commission Executive Vice President Henna Virkkunen defended the decision, stating that deceiving users with blue checkmarks, obscuring advertising information, and blocking researchers have no place online in the European Union. The Commission maintains that its laws do not target any specific nationality but rather defend digital and democratic standards.
The ruling continues investigations into other potential violations, including X's handling of illegal content dissemination and measures against information manipulation. Additional penalties could follow these ongoing probes. Musk has previously indicated he intends to challenge any fines in court, which could delay payment for several years.
Further Reading
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