The European Commission has imposed a €120 million fine on the social media platform X, formerly known as Twitter, for violations of its Digital Services Act (DSA). This penalty, the first issued under the DSA, addresses concerns regarding X's blue check mark verification system, advertising transparency, and data access for researchers. Days after the fine was announced, X terminated the European Commission's advertising account, citing an attempt by the Commission to use an "exploit" within its system. The action has drawn reactions, including criticism from U.S. officials who describe the EU's regulatory measures as targeting American technology companies, a claim the Commission denies.
European Commission Imposes Fine
On Friday, the European Commission announced a €120 million (£105 million) fine against X's holding company for multiple failures to comply with rules governing large digital platforms under the Digital Services Act (DSA). The Commission identified several specific violations:
- Misleading Verification System: X's practice of allowing users to pay for a blue verified check mark was deemed misleading, as the company did not "meaningfully verify" the identity behind the account. This practice, according to the Commission, exposes users to risks such as scams, including impersonation fraud, and manipulation.
- Advertising Transparency: Failure to provide sufficient transparency regarding its advertising practices.
- Data Access for Researchers: Insufficient provision of effective data access for researchers.
The fine was calculated based on the nature and gravity of these infringements, their impact on EU users, and their duration. Henna Virkkunen, the European Commission's Executive Vice-President for Tech Sovereignty, stated that the Commission was holding X responsible for non-compliance with its obligations under EU law. The decision mandates X to submit a plan to the Commission detailing how it will align its practices with EU laws within 60 days, with potential for further periodic fines if unresolved.
Investigation Background and X's Position
The European Commission initiated its investigation into X two years prior and formally accused the platform of several violations in its preliminary findings in July 2024. X serves over 100 million users within the EU.
A European Commission spokesperson, Thomas Regnier, noted that the preference was not to fine X, contrasting the situation with TikTok, which offered concessions to avoid penalties. Regnier indicated that constructive engagement with the Commission leads to case resolution, while a lack of engagement results in enforcement action.
Elon Musk, owner of X, had previously stated his intention to legally challenge any EU sanctions rather than make concessions to resolve the investigation. Following the fine, Musk posted on X suggesting the EU "should be abolished" and retweeted a post that compared the EU to fascism.
X Terminates European Commission's Advertising Account
Days after the fine was imposed, X terminated the European Commission's advertising account. Nikita Bier, an executive at X, stated that the European Commission attempted to "take advantage" of an "exploit" within X's advertising system to promote a post regarding the fine. Bier commented that it appeared the Commission believed "the rules should not apply to your account."
A spokesperson for the European Commission informed BBC News that the Commission consistently uses "all social media platforms in good faith."
International Reactions and Regulatory Context
The European Union's regulatory action has prompted criticism from U.S. officials.
- U.S. Secretary of State Marco Rubio stated that the European Commission's fine constituted "an attack on X" and on "all American tech platforms and the American people by foreign governments."
- FCC Chair Brendan Carr remarked that Europe was "taxing Americans to subsidise a continent held back by Europe's own suffocating regulations," and alleged the Commission was targeting X due to its status as "a successful US tech company."
- U.S. Vice-President JD Vance had previously criticized the EU, suggesting the platform was being penalized "for not engaging in censorship."
These officials also stated that the EU was "attacking and censoring US firms" and that "the days of censoring Americans online are over."
The European Commission denied any connection between trade negotiations with the U.S. and the implementation of its technology regulations. Commission spokesperson Regnier stated that the digital legislation is unrelated to censorship and that final decisions are adopted without targeting specific companies, jurisdictions, or countries of origin.
Under the Digital Services Act, European authorities are authorized to fine offenders up to 6% of their worldwide annual revenue. The action against X is viewed by some experts as a test of the EU's determination in enforcing its digital regulations. This situation highlights an increasing divergence regarding the concept of digital sovereignty, with Europe aiming to establish itself as a global authority for digital regulation.
The EU has previously enforced its digital antitrust rules, including fines of $584 million on Apple Inc. and $233 million on Meta Platforms Inc., and has issued substantial penalties against Alphabet Inc.'s Google over several years.