EU Likely to Fine Elon Musk’s X Under Digital Services Act — Decision Possible Before End of 2025

The European Union is preparing to impose a penalty on Elon Musk's X for alleged breaches of the Digital Services Act (DSA), with regulators expected to conclude their probe and potentially levy a fine before the end of 2025. The investigation — opened in December 2023 as the first under the DSA — has examined issues including misleading paid verification, advertising transparency and researcher access to platform data.

X faces scrutiny over verification, transparency and algorithms

In July 2024 the European Commission flagged X's revamped blue checkmark system as misleading because anyone could pay to receive the badge. The commission also raised concerns that X has not been sufficiently transparent about its advertising practices or provided researchers with the public data access required under the DSA. In January the commission requested further details on X’s algorithms and any recent changes as part of the ongoing probe. X added a disclaimer to its verification mark in June in an apparent attempt to address some regulator concerns.

Legal basis for a fine and its potential scale

Under the DSA, the EU can impose fines of up to 6% of a company's global annual turnover. Regulators must decide whether any penalty would be calculated on X's own revenues or, under the rules, on the broader Musk corporate group — a step that could dramatically increase the potential sum if applied to affiliated firms such as Tesla. Any proposed sanction must be approved by the European Commission's executive college before it can be imposed.

Politics, transatlantic tensions and the timing question

Brussels is weighing the timing of a decision against a sensitive geopolitical backdrop. The political relationship between Washington and Brussels has shifted since 2023, and senior U.S. officials have publicly criticised aspects of the EU's digital rules. Speaking in Brussels, U.S. Commerce Secretary Howard Lutnick urged the EU to "resolve these outstanding cases that are old," linking regulatory flexibility to trade discussions.

EU officials say their priority is building legally robust cases because they expect strong legal challenges from affected companies. EU digital affairs chief Henna Virkkunen said she expects "to conclude some of the investigations" in the coming weeks, while EU spokesman Thomas Regnier noted the commission retains the ability "until the stage of a final decision" to determine which entity qualifies as the service provider for penalty calculations.

What a fine would mean

A fine would mark a landmark enforcement of the DSA and signal the EU's willingness to hold powerful platforms to account. It could also add strain to transatlantic relations if Washington views the move as politically charged. For X, a sanction would be a costly regulatory precedent and could prompt further legal and policy battles across Europe and beyond.

As the probe nears a potential conclusion, observers will be watching whether Brussels prioritises swift enforcement to defend its digital rulebook or delays action to avoid escalating diplomatic tensions.