X Challenges €120 Million EU Penalty: A Landmark Case Under the Digital Services Act
X (previously known as Twitter) has officially filed an appeal against the €120 million fine imposed by the European Commission under the Digital Services Act (DSA). This marks a significant moment as it represents the first legal challenge to the enforcement of this groundbreaking European legislation aimed at greater accountability for large online platforms.
Details of the Fine
The European Commission announced the penalty on December 5, 2025, citing “serious transparency failures” associated with X’s operations. Key concerns highlighted by regulators included the platform’s paid verification system, the transparency of advertising disclosures, and the accessibility of public data for academic researchers.
In a statement from X’s Global Government Affairs account, the platform communicated its decision to appeal, emphasizing that the fine marked the first non-compliance penalty under the DSA. They criticized the EU’s investigation, claiming it was superficial and flawed. The statement pointed to procedural errors and suggested that due process rights were compromised, raising concerns of potential bias in the investigation.
The Importance of the Digital Services Act
The Digital Services Act aims to enhance accountability and safety among digital platforms operating in Europe, particularly with regard to misinformation and transparency issues. X’s case involves three critical areas of non-compliance that could reshape the way such legislation is interpreted and enforced moving forward.
Paid Verification Model Concerns
One major issue leading to the fine revolves around X’s paid verification model. Critics argue that the current system, which allows users to pay for a verified status without thorough identity checks, raises significant risks of impersonation and misinformation. Although the DSA does not mandate stringent identity verification, it prohibits misleading practices that could confuse users.
Advertising Transparency Issues
The second significant concern raised by the Commission relates to X’s advertising transparency. According to the regulators, the platform failed to provide comprehensive data regarding its advertisers, including their funding sources and the topics of their campaigns. The DSA emphasizes the need for an accessible advertising database, particularly for researchers aiming to study misinformation efforts and coordinated influence campaigns.
Restricted Access to Public Data
The final area of concern involves limiting researchers’ access to public data, critical for independent scrutiny and academic investigation. Regulators noted that X’s policies restrict data scraping activities for research purposes—this could have profound implications for data transparency and researcher access in future regulatory environments.
A Pivotal Moment for the DSA and X
Elon Musk’s ownership of X has positioned the company uniquely in this legal battle. In defending itself, X claims that the investigation is flawed and misinterprets the obligations set by the DSA. They assert that the case extends beyond just one financial penalty and raises broader questions about due process and the rights of platforms in digital governance.
This legal challenge will not only impact X but also potentially redefine how penalties are assessed and compliance standards are interpreted for the entire industry. The European Commission has granted X a timeframe of 60 to 90 working days to propose corrective measures, indicating that enforcement under the DSA is only just beginning.
The Broader Implications of the Appeal
The outcome of X’s appeal will likely have significant repercussions on the relationship between regulatory entities and global tech companies. A ruling favoring the Commission could enforce stricter transparency and compliance standards, prompting companies to rethink their approaches to advertising, verification, and public data access. Conversely, if the court rules in favor of X, it may limit the breadth of the DSA’s application, setting a precedent that could affect future regulatory efforts.
Regardless of the outcome, this case highlights a pivotal change in the digital platform landscape: transparency is no longer optional—it’s becoming a legal requirement. Timely and clear compliance with transparency regulations will be critical for platforms navigating this complex environment.
