X Corp. challenges €120 million EU fine under Digital Services Act

X Corp., the company that operates the social media platform X and is owned by Elon Musk, has filed an appeal before the General Court of the European Union against a €120 million fine issued by the European Commission. The penalty, adopted in December, represents the first enforcement action under the Digital Services Act (DSA), a law that has applied to large online platforms since 2023.

The Digital Services Act sets rules for how major online platforms manage risks, moderate content, and ensure transparency in areas such as advertising and account verification. It is designed to increase accountability for platforms operating in the EU’s digital single market.

In its decision, the Commission concluded that X breached transparency requirements and misled users through its paid verification system. Under this system, users could obtain a blue checkmark by subscribing to a paid service. The Commission argued that this design made it more difficult for users to distinguish between verified public figures and paying subscribers, potentially affecting trust in account authenticity. Regulators also raised concerns about advertising transparency and the extent to which independent researchers were granted access to platform data, as required under the DSA.

The investigation into X began in December 2023 and examined issues including risk management procedures, content moderation practices, and the possible use of interface designs that could mislead users, often referred to as “dark patterns.”

X Corp. has rejected the Commission’s findings, stating that the investigation was incomplete and based on an incorrect interpretation of the law. The company has also raised concerns about procedural fairness and due process. The appeal before the EU’s General Court will review whether the Commission correctly applied the DSA and followed proper procedures. The outcome may influence how future fines and enforcement actions are handled under the regulation.

Separately, EU authorities are assessing whether X has adequately addressed broader systemic risks, including the spread of manipulated media and harmful content. While some critics, particularly in the United States, have argued that the DSA may restrict freedom of expression, EU officials maintain that the law establishes clear obligations to improve transparency and accountability for large digital platforms operating within the Union.