⚖️ First major DSA fine goes to X

In partnership with

X Fined €120M for Deceptive Design

The European Commission (EC) has issued its first major fine under the landmark Digital Services Act (DSA), levying a €120 million penalty against X (formerly Twitter). The core of the violation rests on three transparency breaches, with the most publicized being the platform's paid "blue checkmark" system. The EC deemed this a "deceptive design practice," arguing it misleads users by suggesting an account is verified for identity when, in reality, it merely indicates a paid subscription to X Premium. The Commission stated this deception exposes users to scams, impersonation fraud, and manipulation. X was also penalized for a lack of transparency in its advertising repository and for creating "unnecessary barriers" that restrict researchers’ access to public data, both of which violate DSA obligations aimed at fostering public scrutiny of systemic risks online.

The Regulatory Focus on "Dark Patterns" and Transparency

This enforcement action goes far beyond a single social media feature; it signals the EC’s aggressive posture on "dark patterns"—the manipulative design techniques that influence user behavior. For founders, the key takeaway is that the DSA criminalizes confusing or deceptive interface elements that impair a user's ability to make free and informed decisions. The verification issue is a clear example of the regulator punishing the effect (user confusion, fraud risk) of a design choice, not just the intent (monetization). Furthermore, the fines for opaque ad repositories and restricting researcher data access show that the DSA is fundamentally a transparency mandate. Platforms, especially those that host third-party content and ads, must be open books on their content moderation, advertising practices, and the data available for public safety research.

Build for Transparency from Day One

While the DSA's most stringent rules currently apply only to Very Large Online Platforms (VLOPs) like X, the principles behind the law apply to all startups, especially those with EU users. Founders should immediately implement a strategy of "Digital Fairness by Default" to prevent issues that could lead to fines or regulatory scrutiny as they scale.

In addition to our newsletter we offer 60+ free legal templates for companies in the UK, Canada and the US. These include employment contracts, investment agreements and more