The EU issues its first "Digital Services Act" fine: Musk's X fined 120 million euros for violating content regulations.

The European Commission has imposed a fine of 120 million euros (approximately $140 million) on Musk's social network X, marking the first penalty since the Digital Services Act (DSA) came into effect, and signaling deepening differences between Europe and the United States over tech regulation and freedom of speech.

The EU determined that X’s paid blue check verification misled users, hindered researchers from accessing data, and failed to properly establish an advertising information repository. The amount of this fine is lower than market expectations and was not calculated based on the total revenue of Musk's vast business empire, which spans aerospace, infrastructure, and neuroscience, among other sectors.

This penalty prompted a strong reaction from the U.S. government. U.S. Vice President Vance posted on X before the announcement of the fine: "The EU... should not attack American companies on bogus grounds." The White House and X’s spokespersons did not immediately respond to requests for comment.

Although the fine is only a tiny fraction of Musk’s $467 billion fortune, the incident highlights the deep transatlantic disagreement over the definition of fundamental rights in the internet age, such as digital sovereignty and privacy.

Fine Based on Transparency Principle Rather Than Revenue Proportion

The European Commission confirmed that this penalty is based on the "principle of proportionality" rather than X’s revenue size. This decision surprised the market, since the Commission had previously hinted at possibly using the income from Musk’s entire private business empire as the base for calculating the fine.

SpaceX is the largest part of Musk’s private operations and is estimated to have a revenue of $15.5 billion in 2025. In comparison, according to eMarketer, X platform’s advertising revenue is expected to be about $2.3 billion this year. Under the DSA, the EU may levy fines of up to 6% of an online platform’s global annual income for failing to combat illegal content, misinformation, or violations of transparency rules.

Henna Virkkunen, EU Commissioner for Digital Affairs, stated at a press conference on Friday:

"This is not about censorship, it’s about transparency."

She added that this precedent will help speed up future investigations, "It took a long time because our team wanted to ensure a solid legal foundation."

Platform Must Complete Reforms Within 90 Days

According to EU Commission officials, X has 60 days to propose solutions to fix the issues, and must carry out reforms within 90 days, otherwise it may face additional fines.

The fine will be sent to Musk and his AI laboratory xAI. Reportedly, xAI competes with OpenAI and acquired the X platform earlier this year.

The EU still needs to make decisions regarding several additional potential DSA violations in its investigation into X, which could result in further fines. Investigations into more serious issues such as X’s oversight of illegal content, misinformation about elections, and use of the Community Notes function have not yet reached the Commission’s preliminary findings stage. Musk has previously said he intends to legally challenge any fines, which could delay payment for years.

EU Steps Up Regulation of U.S. Tech Giants

Under the DSA and the Digital Markets Act (DMA), which aims to prevent abuse of market dominance, the EU has launched investigations against several major U.S. tech giants, including Apple, Google (under Alphabet), and Meta.

Recently, the region levied fines of 500 million euros and 200 million euros on Apple and Meta respectively, under digital antitrust rules. The EU has also issued major fines against other companies, including a cumulative $8 billion against Google, and required Apple to pay 13 billion euros in back taxes to Ireland under traditional competition law.

These enforcement actions have continually drawn dissatisfaction from the U.S. government. Trump has repeatedly criticized high EU fines and their regulatory actions against U.S. tech companies, and this latest penalty on X once again brings the transatlantic tech regulation conflict into the spotlight.

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