EU's €140 Million Fine on X Platform: Digital Accountability and Transparency

Source: The Hindu 

Introduction 

In December 2025, the European Commission imposed a €140 million fine on X (formerly Twitter) for breaching transparency obligations under the Digital Services Act (DSA). The penalty stems from X's controversial blue check mark verification system, which regulators determined deceived users and undermined trust online. This represents the first major enforcement action against a social media platform under the EU's landmark tech regulation framework. Elon Musk responded by criticizing the EU and calling for its abolishment. 

Why Was X Fined? 

The Verification System Change: 

• Before Musk's October 2022 acquisition, Twitter assigned blue check marks to notable figures as authentication credentials, helping users verify legitimate accounts and prevent impersonation.  
• After purchasing Twitter for $44 billion, Musk transformed this by selling blue check marks through X Blue subscriptions. Anyone could purchase verification regardless of identity, meaning users could no longer differentiate verified public figures from paying subscribers. 

Key Violations: 

• User Deception: X's redesigned system made it difficult to identify who was paying for advertisements and whether there were associated risks, failing to meet DSA transparency obligations. 
• Researcher Access Restrictions: X limited researchers' access to public data and obscured advertising transparency, hindering independent analysis of misinformation patterns. 
• Diminished User Protection: Selling verification without identity verification enabled impersonators, fraudulent accounts, and misinformation to flourish. 
  • The Commission gave X 60 days to inform users about the deceptive nature of blue check marks and 90 days to submit an action plan addressing transparency issue. 

What is the Digital Services Act (DSA), 2022? 

• The DSA is the EU's 2022 landmark regulation creating safer digital spaces where user rights are protected. Key provisions include: 
  • Transparency Obligations: Very Large Online Platforms must provide transparency regarding content moderation, algorithms, and advertising systems, including verification systems. 
  • Protection Against Deceptive Practices: Prohibits practices that deceive users or undermine informed decision-making about content authenticity. 
  • Data Access: Platforms must provide researchers and regulators access to public data. 
  • Enforcement: The Commission can impose penalties up to 6% of global annual turnover for serious violations. 
• Political Reactions: 
  • U.S. President Donald Trump called the fine inappropriate, suggesting Europe was targeting American innovation.  
  • Trump administration officials, including Vice President J.D. Vance and FCC Chair Brendan Carr, criticized it as regulatory overreach targeting American companies. 
  • Elon Musk has posted multiple criticisms of the EU since the fine, characterizing the action as persecution and suggesting the EU Commission should be directly elected rather than appointed.  
  • It remains unclear if Musk will appeal the fine or modify X's verification system for compliance. 
• Consumer Impact: 
  • The paid verification system undermined users' ability to distinguish verified public figures from subscribers, authentic accounts from impersonators, and legitimate information sources from misinformation spreaders.  
  • This created vectors for impersonation, misinformation spread, and manipulation of public discourse during critical events like elections. 

India's Tech Regulation Landscape 

India is developing its framework for regulating digital platforms, drawing lessons from cases like the X fine. 

• Information Technology Act, 2000: India's primary legislation governing electronic commerce, digital signatures, and cybercrime, though it predates modern social media platforms. 
• IT (Intermediary Guidelines) Rules, 2021: Impose due diligence obligations on social media platforms, requiring grievance redressal mechanisms, content moderation, and traceability of message originators. 
• Digital Personal Data Protection Act, 2023: Protects personal data of Indian citizens, establishing data fiduciary obligations, consent requirements, and penalties up to ₹250 crore for breaches. 
• Proposed Digital India Act: Comprehensive legislation under development to replace the IT Act, 2000, addressing algorithmic accountability, platform liability, user safety, and competition concerns while adapting to Indian contexts like language diversity and digital literacy gaps. 

The X case provides valuable precedent for India's regulators on the necessity of clear legal frameworks, meaningful penalties, and consistent enforcement against powerful tech companies. 

Conclusion 

The EU's €140 million fine against X marks a fundamental shift in regulating digital platforms that shape public discourse. When verification becomes purchasable rather than authenticating identity, users cannot distinguish authoritative sources from imposters, researchers cannot study platform dynamics, and democratic discourse becomes vulnerable to manipulation. 

As platforms increasingly function as public squares for global conversation, the question is not whether they should be regulated, but how to balance innovation with accountability. The DSA's approach—mandating transparency, protecting user rights, and holding platforms responsible—offers one model for democratic digital governance. 

For India and other democracies developing platform regulations, this case demonstrates the necessity of clear legal frameworks, meaningful penalties, and unwavering enforcement. The digital age requires platforms that empower users rather than deceive them, ensuring accountability is essential to preserving trust and maintaining the integrity of digital public spaces.