X Contests €120M EU Penalty

A €120 million fine levied by the European Commission for violating EU tech regulations has been contested in court by Elon Musk’s X.

The social media company X, owned by Elon Musk, has formally challenged a €120 million ($140 million) fine levied by the European Commission. This appeal, which was filed on February 16, 2026, at the General Court of the European Union in Luxembourg, is the first time a penalty under the Digital Services Act (DSA) has ever been challenged in court.

According to X, the contest arises from the legal counsel and the Global Government Affairs team of X contending that the Commission’s ruling was essentially incorrect:

• Procedural Errors: According to X, the investigation was “incomplete and superficial”, and the Commission disregarded defence rights and due process.
• The business argues that the enforcement procedure exhibits “prosecutorial bias” and that the Commission functioned as a judge, investigator, and rule maker without sufficient checks and balances.
• Statute Misinterpretation: According to X, the EU has a “tortured interpretation” of the DSA’s obligations and refers to the rule as a “censorship law” that targets websites that uphold free expression in general.

In its battle with the United States over the same regulations, the fine, which was imposed in December, represented a turning point in the EU’s application of its platform regulations, the Digital Services Act (DSA).

The sanction was imposed precisely on December 5, 2025, by the European Commission for three distinct violations of transparency:

• Deceptive Design (€45M): It was discovered that the “blue checkmark” method deceived users by allowing anyone to pay for verification without doing thorough identification checks.
• Ad Transparency (€35M): It was determined that X’s advertising repository was inadequate since it lacked important information about the businesses paying for the ads and their content.
• Researcher Access (€40M): By prohibiting automated data scraping and charging exorbitant fees (up to $5,000/month), the site allegedly hindered independent researchers.

An inadequate and cursory investigation, serious procedural errors, a perverted interpretation of the DSA’s obligations, and repeated violations of the right to defend and fundamental due process requirements that suggested prosecutorial bias led to this EU decision,” X’s Global Government Affairs team posted on the platform on Friday.

Due to violations of transparency obligations and the purportedly misleading design of X’s blue checkmarks, the first fine under the DSA was imposed.

On February 16, three cases were filed against the Commission in the docket of the Court of Justice of the European Union. One is from X Holdings and X Internet Unlimited Company, another is from xAI Holdings, and the third seems to be from tech tycoon Elon Musk.

A version of the ruling subpoenaed and released by a U.S. congressional committee said that all of these organisations were subject to the Commission’s penalties.

The X team noted in a post that this landmark case is the first judicial challenge to a DSA fine and could set important precedents for enforcement, penalty calculations, and fundamental rights protections under the 2022 regulation.

The wider consequence of this, from the precedent, is that the DSA’s enforcement authority is being put to the “litmus test” in this case. If X wins, Brussels might have to reconsider how it looks into other tech behemoths like Google or Meta.

Ongoing probes show that X is still being investigated separately for handling disinformation, unlawful content, and the Grok AI chatbot. The results of these investigations might result in further fines of up to 6% of X’s yearly global turnover.

The political tension from the American authorities, notably the Trump administration, has reacted negatively to the fine, seeing it as an overreach of regulations that targets American businesses.