LONDON, U.K.: European Union regulators on December 5 imposed a 120 million euro (US$140 million) penalty on Elon Musk's platform X, saying the company violated key transparency rules under the bloc's sweeping social media law, the most significant enforcement action since the legislation took effect.

The European Commission issued the non-compliance decision after a two-year investigation under the Digital Services Act (DSA). This rulebook requires major platforms to better protect EU users and curb harmful or illegal content, or risk steep fines. It marks the first time the EU has delivered such a ruling under the law.

The Commission said X committed three breaches of the DSA's transparency obligations. The move is also likely to strain already testy relations with Washington, where officials have accused Brussels of unfairly targeting U.S. tech companies.

U.S. Secretary of State Marco Rubio wrote on X that the fine was equivalent to an attack on the United States. Musk endorsed the post. "The European Commission's $140 million fine isn't just an attack on @X, it's an attack on all American tech platforms and the American people by foreign governments," Rubio said. "The days of censoring Americans online are over."

Vice President JD Vance, posting ahead of the formal decision, accused the EU of punishing X "for not engaging in censorship," adding: "The EU should be supporting free speech, not attacking American companies over garbage."

EU officials rejected claims of political targeting. "Absolutely not. This is based on a process, democratic process," Commission spokesman Thomas Regnier said. "We are not targeting anyone … based on their color or their country of origin."

X did not immediately respond to a request for comment.

Regulators had already signaled concerns in mid-2024 when they released preliminary findings outlining alleged violations. One involved X's blue checkmark system. After Musk's 2022 acquisition of the company, which was then known as Twitter, verification badges became available to anyone paying $8 per month, replacing the previous system used for high-profile accounts such as Pope Francis, Beyoncé, Neil Gaiman, and Lil Nas X.

According to the Commission, the new approach amounted to "deceptive design practices," leaving users more exposed to impersonation, scams, and manipulation because X "does not meaningfully verify who's behind the account."

Regulators also said X failed to meet transparency requirements for digital ads. Under the DSA, platforms must maintain a publicly accessible database of all ads, including who paid for them and the target audience. The Commission said X's system was hampered by design flaws and access barriers, including "excessive delays in processing."

The platform additionally imposed "unnecessary barriers" on researchers seeking to access public data, which the Commission said undermines research into systemic risks faced by European users.

"Deceiving users with blue checkmarks, obscuring information on ads, and shutting out researchers have no place online in the EU. The DSA protects users," said Henna Virkkunen, the EU's executive vice-president for tech sovereignty, security, and democracy.

The Commission also closed a separate DSA case involving TikTok after the platform agreed to adjust its ad transparency tools.