Digital Services Act: EU Fines X €120m

Digital trust often relies on invisible signals, but altering those signals shifts the entire platform's foundation. According to a press release from the European Union, the Commission recently exposed this shift by penalizing a social media giant for changing how user verification works. This decision marks the first non-compliance ruling under the Digital Services Act (DSA). The regulator announced that the EU fines X €120 million for breaches related to transparency and design. As outlined by Digital Strategy EU, this penalty focuses on three specific architectural choices: deceptive blue checkmarks, opaque advertising data, and restricted access for researchers. While company leadership claims this attacks free speech, the ruling targets the platform's underlying structural changes. 

The Core Dispute 

Regulatory clashes often masquerade as political battles, yet the real friction point lies in differing definitions of consumer safety. The Guardian reports that formal proceedings began in December 2023 to investigate illegal content and deceptive design. By July 2024, preliminary findings highlighted issues with design and data access. The final announcement arrived on a Friday. The total penalty lands at €120 million, which equals roughly $140 million. This amount represents the cost of specific transparency breaches. The EU fines X primarily for confusing users about who stands behind an account. The commission argues that the current design exposes users to scams and manipulation. In an official statement released by the European Union, Executive Vice-President Henna Virkkunen emphasized that deceiving users has no place online. 

Breakdown of the Penalty 

Financial penalties reveal exactly which system failures a regulator values most. Euronews detailed that the total sum splits into three distinct buckets based on specific violations. The largest portion, €45 million, addresses the deceving design of blue ticks. Another €35 million targets the opaque advertising repository. The remaining €40 million penalizes the platform for blocking researcher access. The global revenue cap under the DSA allows fines up to 6% of worldwide revenue. Data cited by The Guardian indicates that with X’s estimated 2024 revenue sitting between $2.5 billion and $2.7 billion, the actual fine remains well below the maximum potential threshold. 

The Blue Tick Mechanism 

Symbols lose their utility when a commercial transaction replaces the verification process they once represented. Previously, a blue tick signaled identity verification for politicians, journalists, and celebrities. The new model ties this badge to a premium subscription tier. The EU argues this design deceives users. Reporting by TechCrunch highlights that payment now grants the badge without a relevant ID check. This shift flips a trust signal into a simple purchase. Scammers can easily buy credibility. Matt Navarra noted this change turned a trust signal into a mere transaction. The European Commission states this deception aids malicious actors involved in impersonation fraud. 

Why is the blue tick considered deceptive? As TechCrunch explains, the EU considers the blue tick deceptive because it suggests an account holds verified status when it actually only proves the user paid for a subscription. 

The Transparency Void 

Information vacuums created by restrictive architectures prevent outside observers from tracking manipulation. The penalty also targets the platform's advertising repository. Critics argue the archive lacks critical search functions. It fails to show "Paid by" information clearly. Detailed ad content and topic data remain missing. This opacity makes tracking election interference or scams nearly impossible. The EU fines X for not neing able to come uo with a searchable, transparent history of paid content. This hinders civil society oversight. The DSA mandates that platforms must maintain transparent archives to protect consumers. 

The Data Access Barrier 

Public accountability vanishes when private barriers block independent analysis of platform data. Researchers need data to study systemic risks and online harms. The platform currently prohibits scraping and offers only cumbersome API access. This creates a data barrier. Without access, civil society cannot oversee how algorithms impact public discourse. 

Why do researchers need access to X data? Researchers require access to platform data to independently monitor systemic risks, track misinformation trends, and ensure the platform complies with safety regulations. 

Comparative Frameworks 

The United States considers similar legislation through the Platform Accountability and Transparency Act (PATA). This bill proposes comparable data access requirements. State-level laws in Texas and Florida also uphold transparency mandates. 

The Political Reaction 

Economic penalties frequently trigger ideological defenses that reframe structural compliance as national persecution. The reaction from U.S. political figures framed the decision as an attack. According to The Guardian, JD Vance claimed the EU should support free speech rather than attacking American companies. Marco Rubio called the fine an attack on American tech platforms by foreign governments. Elon Musk labeled the decision "bullshit" and argued the days of censoring Americans are over. Brendan Carr suggested Europe taxes Americans to subsidize its own stagnant economy. However, Henna Virkkunen clarified that compliance prevents fines entirely. The EU fines X based on specific rule violations, not nationality. Other non-US companies, like TikTok, faced investigations but settled by offering concessions. 

Future Compliance and Deadlines 

Enforcement actions function as starting pistols for mandatory structural redesigns rather than just punitive endpoints. The decision imposes strict timelines for change. The company has 60 working days to submit a compliance plan for the blue checkmarks. A separate deadline of 90 working days applies to the ad repository and researcher access. 

What happens if X ignores the EU fine? According to Reuters, ignoring the fine or compliance orders could lead to additional daily penalties or further legal escalation under the Digital Services Act. 

Structural Requirements 

The platform must fix the blue checkmark design. It must also build a functioning ad repository. Finally, it must enable researcher access to data. 

The Architecture of Trust 

This ruling sets a clear precedent for how platforms design their internal systems. The dispute highlights a fundamental clash between verify-to-trust models and pay-to-play mechanics. While political voices frame this as a censorship battle, the regulatory focus remains on architectural transparency. The EU fines X to enforce the principle that digital design must not mislead the user. The outcome of upcoming compliance deadlines will determine if the platform adapts its core mechanics or faces continued friction.