Volkswacht Bodensee - EU hits Musk's X with 120-mn-euro fine, risking Trump ire

The high-profile probe into the social media platform was seen as a test of the EU's resolve to police Big Tech -- and Vice President JD Vance fired a bullish warning against "attacking" US firms through "censorship" before the penalty was even made public.

Imposing the first-ever fine under its powerful Digital Services Act (DSA) on content, the European Commission said X was guilty of non-compliance with transparency rules including through the "deceptive design" of its blue checkmark for "verified" accounts.

"This decision is about the transparency of X" and "nothing to do with censorship," the bloc's tech chief Henna Virkkunen told reporters as it was announced -- pushing back at Vance's charge.

The US vice president warned the EU pre-emptively Thursday it "should be supporting free speech not attacking American companies over garbage" -- in an X post to which Musk replied "Much appreciated."

Musk's platform was targeted by the EU's first ever formal DSA investigation in December 2023 -- and preliminarily found to have breached its rules on several counts in July 2024.

The EU found that changes made to the platform's checkmark system after Musk took over in 2022 meant that "anyone can pay" to obtain the badge of authenticity -- without X "meaningfully verifying who is behind the account."

"This deception exposes users to scams, including impersonation frauds, as well as other forms of manipulation by malicious actors," the commission said in a statement.

It also found X failed to be sufficiently transparent about its advertising and to give researchers access to public data in line with DSA rules.

X remains under investigation over tackling the spread of illegal content and information manipulation -- with those parts of the EU probe yet to conclude.

- 'Words to action' -

Part one of the X probe had appeared to stall since last year -- with no movement on imposing a fine.

Weighing on the EU's mind was the picture in the United States -- starkly different from 2023 -- after Trump returned as president this year with Musk by his side.

The pair later fell out, but the tycoon has reappeared in White House circles, and Brussels had to contend with the prospect any fine on X would fan tensions with Trump.

True to form, Vance hit out before the move was even announced, citing "rumours" the commission was preparing to fine X "for not engaging in censorship."

The DSA gives the EU power to fine companies as much as six percent of their global annual revenue -- and in the case of X the bloc could have based itself on Musk's entire business empire, including Tesla.

Brussels settled on what is arguably a moderate sum relative to X's clout -- but Virkkunen told reporters it was "proportionate" to the violations at stake.

"We are not here to impose the highest fines. We are here to make sure that our digital legislation is enforced," said the tech chief. "If you comply with our rules, you don't get a fine -- and it's as simple as that."

She also emphasised this was one part of a "very broad investigation" into X, which remained ongoing.

The Center for Countering Digital Hate advocacy group welcomed the EU move, saying it "sends a message that no tech platform is above the laws all corporations have to abide by."

Washington has made plain its distaste for the bloc's tech laws, and US Commerce Secretary Howard Lutnick pressed the EU last week to rethink the rules if it wanted lower steel duties.

Driving the point home, a new national security strategy released Friday by Trump's administration urges Europe to "abandon its failed focus on regulatory suffocation."

France's digital affairs minister Anne Le Henanff hailed a "historic" decision by the EU -- which has asserted the sovereign right to enforce its laws faced with US pressure.

"By sanctioning X, Europe shows it is capable of moving from words to action," she said.

At the same time as the X fine, the commission said it had accepted commitments from TikTok to address concerns over its advertising system, although the Chinese-owned platform remains under DSA investigation over other issues.

Regarding X, EU officials insist US politics did not steer their decision-making -- but rather the need to make the case legally water-tight.

F.Wagner--VB