The €120 million warning shot: What the EU’s landmark fine on X means for every social platform

Brussels sets a new standard

The European Union has issued a ruling that will shape the future of online communication across the continent, ordering X.com to pay €120 million for breaches of the Digital Services Act. It is the first major enforcement action under the new rules and marks a decisive shift from persuasion to punishment.

The ruling signals that the European Commission has grown tired of voluntary promises that lead nowhere. The age in which platforms experimented with design choices that prioritised growth over clarity has been replaced by an era where every button, badge and algorithmic decision must stand up to legal scrutiny.

The ruling also confirms that a platform’s size offers no protection. X, designated as a Very Large Online Platform, is held to the highest compliance standards. The decision places pressure on every other company operating in the EU, from Meta to TikTok and from YouTube to Snapchat. The message is direct: transparency is now mandatory, and compliance is not negotiable.

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Why X was fined

The Commission’s decision was built around a detailed assessment of three specific violations. Each reflects a separate responsibility under the Digital Services Act, and each carries implications for the entire industry. The fine is not a broad judgement about content moderation or political messaging. It is a technical and legal analysis of how X’s design choices misled users, blocked independent oversight and obscured the mechanics of advertising.

The largest share of attention has landed on the €45 million penalty tied to the blue checkmark. Under previous ownership, the symbol signified identity verification for public figures, politicians and journalists. The badge did not imply endorsement from the platform but confirmed that the account represented who it claimed to represent.

The Commission found that when X began selling the symbol as part of a subscription package without requiring meaningful verification, it turned a trust cue into a commercial feature. This meant that paying users could adopt a symbol that implied authenticity without any obligation to prove their identity. Investigators concluded that this design choice misled the public, created opportunities for impersonation and encouraged users to treat paid accounts as authoritative.

The ruling states that digital trust cannot be commodified. If a badge communicates identity, it must be tied to identity. Any platform that continues to use industry-standard trust symbols must ensure those symbols genuinely reflect trust.

The second tranche, a €35 million penalty, addressed failures in advertising transparency. The Digital Services Act requires that Very Large Online Platforms maintain an accessible, detailed repository of every advertisement served on the platform.

The archive must include information about who paid for the ad, how much was spent, which demographics were targeted and what content was shown. Investigators found that X’s repository was missing critical fields, was difficult to search and did not allow researchers or regulators to understand how political or commercial influence flowed through the platform. The Commission described the repository as “functionally incomplete” and ruled that this violated the DSA’s transparency obligations.

The third tranche, a €40 million fine, addressed restrictions placed on researchers. After Musk’s takeover, X blocked scraping tools and introduced long, complex approval processes for academic access. The Commission ruled that these obstacles prevented legitimate researchers from analysing public data. Regulators stressed that oversight is part of the DSA’s system for identifying systemic risks such as disinformation. A platform cannot claim to fight harmful content while shutting out those who analyse it.

A clash between Brussels and Silicon Valley

Elon Musk’s response was quick and confrontational. He accused the EU of targeting X unfairly and suggested that the ruling was a political attack rather than a legal decision. X also terminated the European Commission’s advertising account, which escalated tensions further. Musk framed his position as a defence of free speech, while the Commission described its ruling as a defence of transparency, user safety and democratic integrity.

The issue spilled into American politics when US Vice President JD Vance called the ruling an attack on American innovation. European officials countered that the Digital Services Act does not restrict speech but holds platforms accountable for design decisions that mislead users or prevent oversight. The clash reveals a widening gap between European regulation and American tech culture.

What this means for Meta, TikTok and every other platform

Although X is the first to be fined under the DSA, it will not be the last. Every decision in this case sets a precedent. The implications are already being studied across the industry.

Paid verification now has strict conditions

Platforms offering subscription-based verification must ensure that any badge linked to identity is backed by identity checks. Meta’s approach, which requires government ID for Meta Verified subscribers, now appears legally safer. The ruling confirms that a badge cannot imply verification if a platform has not carried out verification. Any attempt to introduce status symbols without authentication risks being classified as a deceptive design pattern.

Startups hoping to monetise early through user badges face a clear limit. Trust cues must be earned, not sold. The EU has effectively ended the pay-for-status model across its market.

Advertising transparency becomes a legal obligation rather than a compliance exercise

The fine targeting X’s ad repository shows that platforms will be judged on the usefulness of their archives, not on their existence. TikTok recently avoided a fine because it accepted the Commission’s findings and committed to improvements. X fought the investigation and received a penalty. The contrast sets a powerful precedent: cooperation will reduce costs, resistance will not.

Any platform that sells political advertising or targeted commercial promotions must prepare for auditors to inspect their ad libraries. Regulators will now test, verify and measure the accuracy of these tools. A repository that cannot explain who paid for an ad or why a user was targeted will be deemed non-compliant.

Data access for researchers becomes a permanent requirement

For years, the largest platforms have restricted academic access to their data. Some claimed copyright protections. Others cited privacy concerns. The ruling confirms that while privacy remains important, it cannot be used as a blanket defence for blocking research. Platforms must design controlled systems that allow independent investigators to study public data for signs of systemic risks.

This will likely lead to the development of EU-specific research APIs or secure access centres. Platforms that refuse to cooperate face severe fines, and the DSA allows penalties of up to 6 percent of global turnover for repeated or serious breaches.