The European Commission has fined X €120 million for breaching transparency obligations under the bloc’s Digital Services Act, marking the first non-compliance ruling since the law took effect. The decision follows a two-year investigation into the platform’s verification system, advertising transparency and data-access practices. 

Regulators found three areas of infringement. X’s paid blue-check verification system was deemed a deceptive design practice, with the Commission stating that users could not reliably determine the authenticity of account holders after the platform began offering verification through subscriptions. Prior to the service’s redesign, verification was limited to vetted public figures, institutions and journalists, according to The Guardian. 

The Commission also cited insufficient transparency in X’s advertising repository, according to Reuters. The Digital Services Act (DSA) requires platforms to maintain a publicly accessible list of advertisers to help detect illegal or misleading ads, including scams and politically sensitive content. Regulators said X did not meet these obligations. 

A third violation concerned the company’s failure to provide researchers access to public data. Under the DSA, vetted researchers must be able to review content and platform dynamics, particularly election-related material and areas vulnerable to manipulation. 

Senior officials said the fine reflects the nature, gravity and duration of the infringements. According to their breakdown, €45 million relates to the verification system, €35 million to ad transparency failures and €40 million to restricted research access. 

EU Tech Chief Says Penalty Is Proportionate

EU Commissioner Henna Virkkunen said the penalty is intended to uphold user rights rather than punish companies. “We are not here to impose the highest fines. We are here to make sure that our digital legislation is enforced,” she said. She added that the case “has nothing to do with censorship.” 

Virkkunen said future enforcement decisions are expected to move faster than the two years taken to conclude the X investigation. The DSA allows fines of up to 6% of a platform’s global revenue, but the Commission opted for a lower amount for this ruling. 

The Commission also stated that the DSA “protects users” and “restores trust in the online environment,” emphasizing that deceptive verification, opaque advertising systems and restricted data access undermine accountability across digital platforms. 

Ongoing Investigations Into Content Moderation and Algorithmic Systems

Both The Guardian and Reuters say the ruling resolves part of a broader inquiry opened in December 2023 into X’s compliance with the DSA. Investigations continue into the dissemination of illegal content, measures to limit information manipulation, the platform’s recommendation algorithms and its mechanisms for users to flag unlawful material. Regulators are also assessing whether the company meets obligations related to content linked to incitement of violence or terrorism. 

Meta, TikTok and Chinese marketplace Temu are also under investigation for alleged transparency and safety violations under the DSA. 

X Has 90 Days to Respond; No Immediate Company Comment

X did not immediately respond to the Commission’s decision. Regulators said the company has been informed and now has 90 days to submit an “action plan” or pursue an appeal, a process other large platforms have used in past competition or regulatory cases. 

U.S. officials have criticized the EU’s tech-regulation framework, arguing it targets American companies. Ahead of the decision, U.S. Vice President JD Vance said on X that the EU “should be supporting free speech not attacking American companies.” European officials responded that the rules apply equally to all firms, including non-U.S. companies such as TikTok, which has offered concessions to avoid penalties. 

TikTok, investigated over advertising-repository requirements, pledged changes to improve transparency and will not face a penalty at this stage. The Commission said commitments from TikTok address concerns raised earlier this year about the visibility of political and age-restricted ads. Separate inquiries into TikTok’s design features, algorithmic systems and child-protection obligations remain underway.

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