Elon Musk Slapped With $140 Million Fine Over Deceptive Blue Checks on X

Elon Musk’s attempt to turn blue checks into a revenue stream for X has hit a major hurdle.

The European Commission, the EU’s executive branch responsible for enforcing the bloc’s laws, just hit X with a fine of 120 million euros (about $140 million) for breaking transparency obligations under its Digital Services Act.

Specifically, the Commission has taken issue with the platform’s “deceptive design” of its blue checkmark verification badges, as well as a lack of transparency around its advertisers.

“Deceiving users with blue checkmarks, obscuring information on ads and shutting out researchers have no place online in the EU,” said Henna Virkkunen, the executive vice president for tech sovereignty, security and democracy at the Commission, in a statement.

This is the latest setback for the platform since Musk bought it in 2022 for $44 billion. In just three years, Musk’s business decisions have managed to lose a large chunk of the platform’s advertisers, bleed users, and slash its revenue.

The Commission first opened an investigation into X in 2023 to see if the social media site had violated the newly passed Digital Services Act, which is meant to regulate digital platforms and reduce harmful content online.

Now, it looks like Musk’s changes to the platform’s blue checkmark feature are a major issue. Twitter once reserved verified badges for notable figures and organizations that had their identities confirmed by the company. This was intended to increase safety, identify quality purveyors of news, and help high-profile users avoid impersonation.

In 2022, under Musk’s ownership, X began handing out blue checkmarks to anyone willing to pay a monthly subscription fee.

“On X, anyone can pay to obtain the ‘verified’ status without the company meaningfully verifying who is behind the account, making it difficult for users to judge the authenticity of accounts and content they engage with,” the Commission wrote in a press release.

The Commission says this paid verification system could expose users to fraud and scams.

Additionally, the European body took issue with a lack of transparency in the company’s advertising repository, which could help researchers detect scams and coordinated influence operations. The company also failed the DSA’s rules for providing researchers with access to the platform’s public data.

X now has 60 days to explain to the Commission how it plans to address the blue checkmark issue, and 90 days to address the other concerns. If it doesn’t, it could face even more fines.

While this fine is likely just a drop in the bucket for Musk—his other company, Tesla, voted this year to offer him a $1 trillion pay package—it’s another hit to his struggling social media site.

Since X is now a private company, it isn’t obligated to disclose financial information. However, Twitter previously reported that it generated over $5 billion in revenue in 2021. In contrast, industry analysts estimate that X generated just $2.5 billion in 2024.

X still makes most of its money from ads. But paid subscriptions brought in an estimated $200 million from 2021 to 2024, TechCrunch reported last October, citing app intelligence firm Appfigures.

It’s important to note that the figure is based only on subscriptions made via the mobile app on Android and iOS devices. Still, after accounting for app store commissions, X would have made a minimum of $140 million from subscriptions, the firm estimates. That’s roughly how much the Commission is fining X.