X appeals $140M penalty from the EU Commission

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In news that will surprise no one, X has launched a legal challenge against the $141 million (approximately 120 million euros) fine issued to the company by the EU Commission last December, which relates to breaches of X’s DSA obligations relating to transparency.

The fine specifically relates to X’s changes to verification, which the EU Commission claims has led to confusion as to what the blue checkmarks in the app now represent. In addition, the EU Commission has also penalized X for restricting researcher access, which is also in violation of X’s DSA obligations.

X’s platform’s Global Affairs team said on Friday that the penalty is based on a flawed approach.

As per X:  “This EU Decision resulted from an incomplete and superficial investigation, grave procedural errors, a tortured interpretation of the obligations under the DSA, and systematic breaches of rights of defense and basic due process requirements suggesting prosecutorial bias.”

Clearly, X is unhappy with the Commission’s findings, with the exaggerated language here is reflective of X owner Elon Musk’s initial response when news of the penalty was announced in December.

At that time, Musk compared the EU Commission to the Nazi regime, while he also called for the U.S. to leave NATO in response and called for the abolishment of the entire EU framework.

So, clearly, Musk was less than pleased.

X says that this will be a “landmark case” as the first judicial challenge to a DSA fine. In addition, X says that this could set important precedents for enforcement, penalty calculations and fundamental rights protections moving forward.

Which seems unlikely. It seems more likely that the EU Commission will stand by its decision and that the court will find in its favor, based on the wording of the DSA documentation. Either way, it will give Musk another opportunity to rally against the Commission and voice his displeasure at his company being penalized by a foreign group.

And given Musk’s connections to the U.S. government, that could lead to a bigger reckoning for EU authorities.

The last time Musk attacked the EU Commission, he was joined in his criticisms by U.S. Vice President J.D. Vance and U.S. Secretary of State Marco Rubio, with Rubio labeling the X penalty “an attack on all American tech platforms and the American people by foreign governments.”

That angle, that U.S. companies are being restricted by EU regulation, aligns with the Trump Administration’s “America First” agenda. Because of this, X’s challenge could lead to a bigger fight between the U.S. government and European authorities, whether X wins its case or not.

The U.S. government could threaten increased tariffs or further restrictions on EU trade, which could see the Commission forced to back down, even if it has a strong case.

This comes as X faces more EU penalties, with the Commission also launching a new investigation into xAI’s Grok chatbot and recent issues with Grok generating nude images of people.

As such, this could all become a much bigger issue, and a much bigger challenge than the initial case laid out here.