European Commission issues first-ever non-compliance decision under DSA; cites deceptive design, lack of transparency and user risk exposure
The European Union (EU) has imposed a hefty fine of €120 million (approximately ₹1,080 crore) on Elon Musk’s social media platform X (formerly Twitter) for violating the bloc’s Digital Services Act (DSA) — a landmark digital regulation designed to ensure transparency, accountability, and user safety online.
In its ruling, the European Commission said X had committed “serious and repeated breaches” of the DSA’s transparency rules, exposing millions of European users to potential fraud, misinformation, and manipulation risks.
This is the first-ever non-compliance decision issued under the DSA, signalling the EU’s intent to strictly enforce its digital governance framework against global tech giants.
Three Major Violations: Transparency Failures and User Deception
According to the Commission, X breached three key DSA provisions related to transparency and user protection.
The first and most significant violation concerns the platform’s Blue Checkmark verification system, which the EU labelled as a case of “deceptive design practices.”
After Musk’s 2022 takeover, X began offering the verification badge to any user willing to pay ₹650 per month ($8), abandoning the earlier system where verification was reserved for public figures, officials, and credible entities.
Regulators argue that the new model erodes trust in identity verification, making it difficult for users to discern authentic accounts from impersonators. This, they said, “creates a fertile ground for scams, misinformation, and coordinated influence operations.”
Ad Database: Transparency Gaps and Access Barriers
The second violation involves serious deficiencies in X’s advertising database — a mandatory public repository under the DSA that requires all platforms to disclose who funded each advertisement, its purpose, and intended audience.
The Commission found that X’s ad database suffers from technical flaws, delayed processing, and excessive access barriers, which restrict researchers from obtaining real-time data.
Such opacity, the EU said, undermines efforts to track fake ads, identify coordinated disinformation campaigns, and hold advertisers accountable.
In its statement, the Commission said the database’s design “appears to be intentionally restrictive and non-functional,” a direct breach of the DSA’s transparency mandate.
Blocking Research Access: Hindering Risk Assessment
The third breach cited involves X’s restrictions on researcher access to public data, which the EU said “obstructs systemic risk assessment.”
By curtailing legitimate research access, X allegedly made it harder for independent institutions to study misinformation trends, election interference, and content manipulation on the platform.
This behaviour, the Commission said, “prevents the identification of systemic threats faced by European citizens in the digital environment.”
‘No Place for Deception or Opacity in the EU’ — Commission Vice-President
In a firm statement, Henna Virkkunen, the EU’s Executive Vice-President for Tech Sovereignty, Security and Democracy, said:
“Deceiving users with blue checkmarks, obscuring advertising information, and blocking researchers have no place in the European Union. The DSA protects citizens and demands accountability from all platforms.”
Virkkunen clarified that the decision “is not an attack on any single company but a defence of digital transparency, public trust, and democratic integrity.”
X Silent; US Reaction Expected
As of Friday, X has not issued any official response to the ruling. However, the move is expected to anger Washington, which has repeatedly accused Brussels of unfairly targeting American tech firms.
Former US President Donald Trump’s administration had earlier criticised the EU’s digital regulations, calling them “protectionist measures against US innovation,” and hinted at potential retaliatory trade responses.
What Is the Digital Services Act (DSA)?
The Digital Services Act, enacted in 2024, is the EU’s most comprehensive internet law to date. It requires major platforms to:
- Remove harmful or illegal content swiftly,
- Maintain transparent ad repositories,
- Ensure data security and user protection, and
- Face fines of up to 6% of global annual turnover for violations.
The DSA applies to all large online intermediaries operating in the 27-member bloc, including X, Meta, Google, Amazon, and TikTok.
Conclusion: A Landmark Message on Digital Accountability
The ₹1,080-crore penalty against X marks a turning point in Europe’s digital regulation drive — a clear signal that transparency and user safety are non-negotiable.
For Elon Musk, it’s not merely a financial setback but a policy and reputational challenge, as global regulators increasingly scrutinise the governance of social media giants.
The EU’s message is unambiguous:
“Freedom of expression thrives on accountability — not deception.”
With this precedent, the Digital Services Act has officially entered an enforcement era, reshaping how the world’s biggest platforms operate in the European market.
