EU to defend €120 million X fine as US backs Musk court challenge

MUMBAI: The blue tick has turned into a red flag in a transatlantic legal tussle, with the European Commission preparing to defend its €120 million fine against X after the US Justice Department stepped into Elon Musk’s challenge.

The Justice Department filed an application on 24 September to intervene before the EU’s General Court in Luxembourg, backing X Corp and Musk in their attempts to annul the European Commission’s 5 December 2025 decision. The cases, X Internet and X Holdings v Commission and Musk v Commission, challenge a penalty of €120 million imposed jointly and severally over alleged breaches of the bloc’s Digital Services Act (DSA).

The European Commission has said it is ready to defend the decision. Commission spokesperson Thomas Regnier said the EU has the right to make and enforce laws designed to protect people in Europe, while indicating that Brussels remains confident in its case and has substantial evidence to present to the court.

The fine followed a two-year investigation and was the first non-compliance decision issued under the DSA. The Commission said X breached transparency obligations through the design of its paid blue checkmark, its advertising repository and its restrictions on researchers’ access to public data.

The blue checkmark is at the centre of the dispute. According to the Commission, allowing users to pay for a verification badge without meaningful identity verification could give a misleading impression about an account’s authenticity and expose users to impersonation scams and other forms of manipulation. The regulator also said X’s advertising repository lacked required information and accessibility, while its terms and processes created barriers to researchers accessing public data.

Washington, however, is challenging the reach of the EU’s regulatory approach. Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division argued that the Commission had attempted to extend its authority to American companies outside its jurisdiction.

The US government has also raised concerns over how liability was attributed under the DSA, including what it described as the Commission’s approach to Musk personally and to other US corporate entities under his ownership. The Justice Department said the case could have wider implications for very large online platforms operating in the EU, many of which have parent companies based in the US.

The dispute adds another layer to wider disagreements between Washington and Brussels over digital regulation. While US officials have criticised aspects of EU technology rules, the European Commission has maintained that the DSA applies regardless of a platform’s national origin and is intended to strengthen transparency and protections for users.

The legal battle is still at an early procedural stage. The General Court must first decide whether to allow the United States to intervene before the substantive challenge brought by X and Musk proceeds.

The case could therefore reach well beyond one €120 million fine, with the court’s eventual ruling potentially shaping how far EU digital regulation can extend over major US-based technology companies operating in the bloc.