Elon Musk's X slammed with $140 million fine in first encounter with sweeping new law: 'Deceiving users'

The European Union slapped X with a $140 million (€120 million) fine, the New York Times reported, prompting a litany of angry, anti-EU tweets from Elon Musk.

What's happening?

Musk finalized his controversial acquisition of what was then "Twitter" in 2022, renaming the platform X and making immediate, sweeping changes.

In the months before the sale was completed, CNBC reported that dozens of groups raised objections, and experts warned Musk "would … provide a megaphone to extremists who traffic in white nationalism, hate, disinformation, and harassment."

After the acquisition, one of Musk's first actions was to dismantle Twitter's "blue check" verification system, turning it into a subscription service available to all. Unsurprisingly, the decision backfired almost immediately.

According to the Times, X was the first company to be fined under the EU's landmark Digital Services Act, which was enacted to ensure user safety on digital platforms. 

The EU cited three causes of action: a misleading verification system that enabled scamming, a failure to provide data to researchers, and the platform's concealment of the payors behind ads.

In a statement dated Dec. 4, Henna Virkkunen, the EU's executive vice-president for tech sovereignty, security, and democracy, explained the decision.

"Deceiving users with blue checkmarks, obscuring information on ads, and shutting out researchers have no place online in the EU … With the DSA's first non-compliance decision, we are holding X responsible for undermining users' rights and evading accountability," she said.

Why is this important?

Although Musk's allies tried to cast the EU's action as an attack on "free speech," research into the spread of disinformation and its effects told a different story.

Last August, The Guardian observed that experts' fears of "a rampant spread of misinformation that would lead to threats and harassment and undermine democracy" bore out. 

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On Nov. 7, 2024, the non-partisan Brookings Institution found that disinformation was pivotal in the lead-up to the 2024 general election, and in January, Facebook capitulated to government demands and formally ended its fact-checking partnerships.

Misinformation and disinformation are differentiated by the latter's intent to deceive, but both have adverse real-world consequences and undermine democracy when left unchecked.

As artificial intelligence tools become more accessible and lifelike, their ability to exacerbate the problem grows, creating conditions for an even less reliable information environment than we have today.

Musk predictably lashed out, tweeting about abolishing the EU on Dec. 6. Although Musk's current ties to the U.S. government remained unclear, the fine might have prompted official federal retaliation.

On Dec. 4, NPR reported that the State Department ordered staff "to reject visa applications from people who worked on fact-checking, content moderation or other activities" it claimed infringed upon Americans' "free speech."

What's being done about it?

Musk vowed to target the individuals involved, according to Politico Pro.

However, European anti-extremism advocates like Josephine Ballon of HateAid believed the EU didn't go far enough.

"The EU must keep at it and not bow to geopolitical pressure from the U.S.," Ballon said.

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