Elon Musk’s platform X has become the first major test case for Europe’s new Digital Services Act, after the European Commission imposed a €120 million penalty on December 5, 2025. The decision has triggered a sharp political and commercial confrontation, pitting Brussels’ most ambitious online rulebook against one of the world’s most prominent tech executives and his allies in Washington.
Blue Checkmarks and “Deceptive Design”
At the center of the case is X’s overhauled blue checkmark system. Since November 2022, users have been able to pay about €7 per month to obtain the same blue badge that previously signified that an account truly belonged to a public figure, institution, or notable organization.
EU regulators concluded that this shift created a “deceptive design” that misleads users about which accounts are authentic. The Commission cited research from 2023 indicating that around 60% of X users misunderstood what the blue check now represents, increasing the risk of impersonation scams and confusion around the identity of influential voices on the platform. In the Commission’s view, the company failed to give ordinary users a reliable way to distinguish genuine accounts from paying imitators, undermining trust in information circulating in Europe.
Ad Transparency and Researcher Access
The Commission also found that X breached two other core obligations of the Digital Services Act: advertising transparency and data access for researchers.
Under the law, large platforms must maintain an easily accessible database of all advertisements served, including who paid for them and how they were targeted. Regulators said X instead made this ad repository difficult to use, with design barriers and significant delays that concealed information about sponsored content. This obstructed efforts to detect malicious advertising and coordinated disinformation campaigns aimed at users in EU countries.
A third violation concerned access to public platform data. Article 40 of the DSA requires “very large online platforms” to provide vetted researchers with data needed to study systemic risks, such as the effects of recommendation algorithms and the spread of harmful content. The Commission determined that X imposed “unnecessary barriers” that in practice blocked meaningful research into how its systems influence what European users see.
Together, these failings formed the basis of the €120 million fine: €45 million for the blue checkmark design, €35 million for insufficient advertising transparency, and €40 million for obstructing researcher access. Officials stressed that the penalty was “proportionate” and far below the DSA’s ceiling of up to 6% of a company’s global annual turnover.
Musk and U.S. Officials Escalate the Dispute
Musk reacted publicly within hours, replying “Bulls*” below the Commission’s announcement. In subsequent posts he intensified his criticism, declaring that “The EU should be abolished, and sovereignty returned to individual countries,” and arguing that the enforcement action targeted him personally as well as X.
Senior figures in the Trump administration quickly echoed his pushback. Secretary of State Marco Rubio described the decision as an “attack on all American tech platforms,” while Commerce Secretary Howard Lutnick said the DSA was crafted “to stifle free speech.” Vice President JD Vance added that European institutions “should be supporting free speech, not attacking American companies.” Ambassador Andrew Puzder said the administration would “oppose censorship and challenge burdensome regulations that harm US companies.”
This coordinated response underscored the widening rift between Washington and Brussels over how far governments should go in regulating large online platforms, and whether European rules unduly affect U.S.-based firms.
Retaliation on X and the EU’s Firm Stance
X’s reaction went beyond rhetoric. Over the weekend following the fine, the company terminated the European Commission’s advertising account, accusing EU institutions of exploiting an “ad system loophole.” The decision effectively cut off the Commission’s ability to pay for promoted messages on X, restricting its reach to users with official announcements and public information in one of the platforms where political conversation is most visible.
EU officials responded by emphasizing that the dispute is about legal compliance, not speech. Paula Pinho, the Commission’s chief spokesperson, stated that enforcement is purely tied to adherence to the Digital Services Act and that “If there is compliance, there are no fines.” Finnish lawmaker Henna Virkkunen said that practices such as misleading users with badges, obscuring advertising, and excluding researchers have “no place in the EU.”
Meanwhile, investigations into X’s recommendation systems continue, focusing on whether its algorithms contribute to radicalization or other systemic risks.
A Test Case for the Digital Services Act
The Digital Services Act is the EU’s most far-reaching attempt to regulate the online environment, with full enforcement beginning in 2024. It applies to platforms operating in the EU, with tougher duties for “Very Large Online Platforms” serving more than 45 million users in the bloc. Key requirements include rapid removal of illegal content, transparent advertising repositories, prohibitions on manipulative design patterns, and structured access for researchers studying platform risks. Penalties can reach 6% of worldwide annual revenue, and recurring fines of up to 5% of average daily turnover can be imposed for ongoing non-compliance.
X is the first company fined under the DSA, but it is not alone under scrutiny. The Commission has issued preliminary findings that TikTok and Meta failed to meet transparency obligations around data access for researchers. TikTok has already negotiated a settlement involving binding commitments to improve its advertising repository, allowing it to avoid an immediate financial penalty.
Under the current enforcement decision, X has 60 days to submit proposals to fix the blue checkmark system and 90 days to present plans for bringing its advertising transparency and research access practices into line with DSA standards. Failure to meet these deadlines could trigger recurring daily fines, potentially creating a prolonged standoff if the company refuses to adjust its systems.
For both sides, the stakes extend beyond a single platform. In Brussels, officials see this case as a precedent that demonstrates Europe is prepared to enforce its framework against any large platform operating in its territory, regardless of ownership. In Washington, the Trump administration frames the dispute as part of a broader clash over digital sovereignty and differing models of online governance. Musk can contest the fine in EU courts, a process that could take years, but in the meantime X must choose whether to comply, seek a negotiated settlement, or continue down a path of open confrontation that could invite even tougher measures in the future.
Sources
European Commission December 5, 2025 Digital Services Act enforcement announcement
BBC News “Elon Musk’s X fined €120m over ‘deceptive’ blue ticks” (December 5, 2025)
TechCrunch “In its first DSA penalty, EU fines X €120M for ‘deceptive’ blue check verification system” (December 5, 2025)
Al Jazeera “EU hits Musk’s X with $140m fine for ‘deceptive’ blue tick, ad transparency” (December 5, 2025)
Euronews “European Commission hits Elon Musk’s X with €120 million fine” (December 4, 2025)
AP News “EU hits Elon Musk’s X with 120 million euro fine for Digital Services Act violations” (December 5, 2025)
Fortune “Elon Musk’s X fined $140 million by EU for breaching digital regulations” (December 6, 2025)