NextFin News - In a significant escalation of regulatory tensions, X, the social media platform formerly known as Twitter, has deactivated the European Commission’s (EC) advertising account following a record-setting €120 million fine issued by EU regulators under the Digital Services Act (DSA). The fine, announced in early December 2025, penalizes X for its flawed paid verification system—commonly known as the blue checkmark—and inadequate advertising transparency mechanisms mandated by the DSA. While the EU Commission retains the ability to post organic content and its government tag remains visible, it can no longer purchase promoted ads on X’s platform.
The European Commission's penalties stem from findings that X's pay-for-verification system misleads users by conflating subscription with authentic identity verification, thereby increasing risks of impersonation and fraudulent activities. Additionally, the EU flagged X for insufficient transparency in its advertising repository, complicating public oversight of politically and socially sensitive content distribution under new regulatory norms. The Commission criticized X for an opaque and hard-to-access ad library that undermines key DSA goals related to governance, transparency, and consumer protection.
X publicly contends that the deactivation was not retaliatory over the fine but a response to the Commission allegedly exploiting a technical vulnerability within X’s Ad Composer tool. According to X’s Head of Product, Nikita Bier, the EC used a dormant ad account to post content in a format that artificially boosted its reach, violating platform rules. X stated it has remedied the flaw and terminated the Commission’s ad purchasing capabilities accordingly. Meanwhile, U.S. President Donald Trump’s administration closely watches the development amid growing U.S.-EU tensions over digital governance.
The €120 million fine represents the first major enforcement action under the EU’s DSA against a Very Large Online Platform. The legislation allows for fines up to 6% of a platform's global annual turnover for non-compliance, signaling Brussels’ resolve to enforce transparency and consumer safeguards. X has been given strict compliance timelines—to remedy verification and ad transparency issues within 60 and 90 days respectively—after which further penalties could escalate.
This episode illustrates the mounting clash between tech industry business models emphasizing monetization through subscription and advertising, and European regulatory frameworks prioritizing user protection, misinformation control, and public scrutiny. X’s paid verification product, initially intended as a user identity authentication signal, evolved into a revenue stream, blurring trust signals and complicating regulatory compliance.
The impact of X’s move is multifaceted: For the European Commission, losing paid advertising access constrains their ability to amplify public interest messaging and policy communication beyond organic reach. For X, while it retains significant market presence, the escalating dispute risks regulatory retaliation that could hamper platform operations, especially in the strategically critical EU market—Europe accounts for an estimated 15-20% of X’s global ad revenues, which have faced pressure amid broader financial challenges at the company.
More broadly, this stalemate reflects a testing ground for worldwide digital governance, where the EU’s DSA enforcement sets precedent for holding global platforms accountable. The transparency and authenticity of digital signals, such as verification badges and ad libraries, are crucial to maintaining user trust and combating misinformation in democratic societies. X’s resistance evidences the delicate balance platforms must strike between product innovation and regulatory compliance—a balance increasingly scrutinized under rising legal frameworks across jurisdictions.
Looking ahead, the coming months will be decisive. Should X implement meaningful compliance measures, it may restore cooperation with EU regulators and preserve its market position. Failure risks triggering an escalation of fines potentially reaching hundreds of millions or even billions of euros, given the DSA’s penalty scale relative to global revenue. Furthermore, the ongoing conflict could catalyze regulatory evolution in the U.S. under the Trump administration, which has shown mixed stances on tech regulation but faces mounting pressure for greater platform accountability.
For stakeholders in digital advertising, platform governance, and public policy, this clash underlines urgent needs for clearer industry standards around paid verification, ad transparency, and the governance of mega-platforms in the digital public sphere. As tech giants recalibrate their business models and compliance strategies, regulatory frameworks will likely continue evolving toward harsher sanctions and greater operational constraints designed to protect users and public discourse integrity.
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