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Elon Musk’s social media platform filed three parallel cases at the General Court of the European Union on February 16, challenging the first non-compliance penalty ever issued under the Digital Services Act. The appeal — brought by X Holdings, its AI subsidiary xAI, and Musk personally — argues the European Commission acted as “regulator, prosecutor, and judge” with no meaningful checks. The €120 million fine is modest by Big Tech standards, but the precedent it sets is not: the ruling will determine how Brussels enforces digital law against every major platform operating in Europe.
What the Fine Actually Punishes
The European Commission imposed the penalty on December 5, 2025 — its first enforcement action under the DSA — for three distinct transparency violations, according to the Commission’s press release. The largest component, €45 million, targets what regulators called the “deceptive design” of X’s blue checkmark system: anyone can pay for verified status without meaningful identity checks, making it difficult for users to distinguish authentic accounts from impersonation scams. A further €35 million addresses the platform’s advertising repository, which the Commission found lacks critical information including the content of advertisements, their topics, and the legal entities paying for them — data that researchers and civil society need to detect coordinated information operations and fake ads. The remaining €40 million relates to researcher access: X’s terms of service prohibit eligible researchers from independently scraping public data, and the platform imposes what the Commission described as “unnecessary barriers” that effectively undermine research into systemic risks within the EU. X must submit a revised plan for researcher access by mid-April 2026, per the Commission’s compliance timeline.
X’s Legal Arguments
X’s Global Government Affairs team framed the appeal in stark terms on the platform on Friday, calling the Commission’s investigation “incomplete and superficial” and accusing it of “systematic breaches of rights of defence and basic due process requirements suggesting prosecutorial bias.” The company is represented by Alliance Defending Freedom International, a free-speech advocacy group whose senior counsel for Europe, Adina Portaru, told reporters the case turns on whether the DSA’s enforcement architecture is compatible with the rule of law. Portaru argues that the Commission defines the rules, launches investigations, enforces them, and imposes penalties — all without sufficient institutional separation. If the General Court agrees, it could force Brussels to restructure how it polices every Very Large Online Platform, from Meta to TikTok to Google, under the 2022 regulation. A Commission spokesperson told Recorded Future News the institution is “aware that X lodged an appeal” and will “defend our position in court.”
The appeal does not exist in a legal vacuum. X faces at least four additional ongoing European investigations. The original DSA probe opened in December 2023 — examining how the platform handles illegal content and information manipulation — remains unresolved after more than two years. In January 2026, the Commission opened a separate investigation into X’s Grok AI chatbot over the generation of sexualised deepfake images of women and minors, following an international backlash. Parallel national probes are active in the UK, France, Ireland, and Spain. Each carries the theoretical maximum penalty of 6 percent of global annual turnover under the DSA — though X, as a privately held company, does not publicly disclose its revenue.
The Transatlantic Escalation
The fine has become a flashpoint in the broader US-EU confrontation over digital sovereignty. Within weeks of the December penalty, Secretary of State Marco Rubio imposed visa bans on five Europeans he accused of leading “organized efforts to coerce American platforms to censor, demonetize, and suppress American viewpoints,” as reported by CNN and PBS. The most prominent target was Thierry Breton, the former European Commissioner for Internal Market who architected the DSA and clashed publicly with Musk in 2024 over content moderation during the UK riots. Under Secretary for Public Diplomacy Sarah Rogers labelled Breton the “mastermind” of what she called the “global censorship-industrial complex.” Breton responded on X by invoking McCarthyism and noting that 90 percent of the European Parliament and all 27 member states voted for the DSA. France, Germany, and Spain all condemned the visa bans, with President Macron calling them “intimidation and coercion aimed at undermining European digital sovereignty,” according to CBC reporting.
The pressure extended into trade. US Commerce Secretary Howard Lutnick reportedly offered EU officials a 50 percent reduction in tariffs on European steel and aluminium if Brussels committed to scaling back its digital rulebook, including the DSA, according to Bloomberg (per CNN’s analysis of the exchange). EU Executive Vice-President Teresa Ribera told Politico that Lutnick was attempting to “strong-arm” the bloc into watering down its regulatory framework. US Trade Representative Jamieson Greer separately threatened European companies including SAP, Spotify, and Mistral with “fees or restrictions” if the EU continued what he called discriminatory enforcement against American firms. The US House Judiciary Committee published a 160-page report in January alleging that the EU used the threat of DSA fines to compel platforms to suppress political content — though Democratic members of the committee called the report’s framing “distortions.” With the Supreme Court having just struck down Trump’s IEEPA tariffs, the trade-for-deregulation leverage may now be weaker than Lutnick assumed.
What the Court Will Decide
General Court proceedings typically take 18 to 24 months, meaning a ruling is unlikely before late 2027 at the earliest. In the interim, the fine remains payable and the compliance obligations stand. The case will test several untested legal questions: whether the DSA’s concentration of investigative, prosecutorial, and adjudicative functions in the Commission violates EU fundamental rights; whether the blue checkmark system constitutes “deceptive design” under the regulation’s specific provisions; and whether requiring researcher access to public data imposes obligations that conflict with platform operators’ rights. The outcome matters well beyond X. Meta, TikTok, and Google all operate under the same DSA framework and face their own active investigations — TikTok recently avoided a fine by accepting binding commitments on ad transparency, a path X has so far refused to take, per the Commission’s separate announcement. If the court narrows the Commission’s enforcement powers or invalidates aspects of the penalty calculation, it will reshape the regulatory landscape for every major platform operating in the 450-million-user European market. If it upholds the fine, the DSA’s enforcement credibility — and Brussels’ leverage over Silicon Valley — will be substantially reinforced at a moment when Washington is actively trying to dismantle it.
