DSA €120m Fine Against X is Escalating Transatlantic Tensions as Washington Threatens Retaliation: But the EU is Defiant

The European Union has issued its first major enforcement blow under the Digital Services Act, hitting Elon Musk’s X with a €120 million fine on Friday — about $140 million — and setting off a diplomatic and corporate firestorm that now spans Brussels, Washington, and Silicon Valley.

The penalty marks the first time any platform has been punished under the DSA, and the episode has quickly evolved beyond a regulatory dispute into a broader clash over sovereignty, competition, and the power of American tech giants inside Europe.

Musk answered the announcement in trademark fashion, firing off a single-word post — “Bullshit” — to his ? profile minutes after the European Commission released the details. But the public confrontation escalated further a day later when X’s head of product, Nikita Bier, accused the Commission of misusing a platform loophole to boost the reach of its announcement and then responded by shutting down the EU executive’s advertising account on X.

Bier said the Commission had not used its ad account since 2021, yet relied on a post format reserved for paid promotions to publish the fine announcement. He claimed the institution used “a link that deceives users into thinking it’s a video and to artificially increase its reach.” The post did, in fact, contain a video showing the Commission’s message, but Bier’s allegation centered on how the link was formatted.

His retaliation, suspending the Commission’s ad account, is unlikely to carry practical consequences. If the account has truly been dormant for three years, withholding it does little to influence the process now underway. X is still expected to pay the €120 million fine unless its appeal succeeds, and the company must, within 60 days, submit a concrete plan to address its use of “deceptive” verified checkmarks or risk further punishment.

As this brewed in Europe, the fine ignited a wave of condemnation across the United States. Officials in Washington warned the EU that the Trump administration may retaliate to defend American tech companies, tying the standoff directly to trade, tariffs, and broader diplomatic relations. Corporate leaders joined the chorus, describing the EU’s increasingly aggressive regulatory posture as harmful to investment. JPMorgan chief executive Jamie Dimon said Europe “has driven business out, driven investment out and driven innovation out.”

Beyond the immediate dispute with X, Brussels is intensifying its confrontation with Big Tech after years of complaints that American digital platforms dominate the European market without adequate oversight. Three months after hitting Google with an unexpected €2.95 billion fine in an unrelated antitrust case, the European Commission followed with this 120-million-euro penalty on X for breaking EU content rules.

The wider conflict now involves the Digital Markets Act, which seeks to rein in power across a long list of companies, including Amazon, Apple, Google, Meta, Microsoft, ByteDance, and Booking.com. It also involves the Digital Services Act, the same law at the center of the dispute with Musk, which requires major platforms to curb illegal content, mitigate harmful material, and provide transparency on how their systems function.

Senior Commission officials show no signs of wavering under American pressure. Teresa Ribera, the EU’s antitrust chief, flatly rejected complaints from Washington, saying, “It is our duty to remind others that we deserve respect. I don’t enter into how they regulate the health standards in the U.S. market. But I am in charge of defending the well-functioning digital markets in Europe and it is not related at all with any type of joint conversation.”

During another public appearance, Ribera dismissed the idea that competition law should be deployed as an economic weapon. She described it instead as “an essential pillar of open, fair, and sustainable markets,” warning it should never serve as a “bargaining chip in trade negotiations or a tool for protectionism.”

Several analysts note that Washington’s threats may already be losing their effect. Daniel Mandrescu, a lawyer at Geradin Partners and associate professor at Leiden University, said the Commission’s announcement of a new investigation into Meta suggests that political pressure from the United States “is rapidly losing its strength,” arguing that adherence to the rule of law leaves Europe little room to compromise.

Some observers believe this moment marks the EU’s most assertive phase of tech enforcement in years. Rupprecht Podszun, a professor at Heinrich Heine University Düsseldorf and director at the Institute for Competition Law, said he was struck by the newfound determination inside the Commission. He warned that the momentum itself creates higher expectations, because backing down later would undermine the entire effort. The Google Ad-Tech case, he said, will serve as a crucial test, as will the outcome of the new Meta AI probe.

Google recently offered to make it easier for publishers and advertisers to use its online advertising tools without switching between different services. The company hopes the proposal can resolve concerns without the forced divestiture the EU has pressed for. A ruling is likely early next year.

Meanwhile, the Commission has launched a fresh investigation into Meta, which could force the company to pause its rollout of new AI features inside WhatsApp on the grounds that the changes may block rivals.

Taken together, the moves create a new collision course between Europe’s historic stance on digital sovereignty and Washington’s determination to defend its most powerful technology firms. The DSA fine against X is more than a penalty for a specific breach; it signals a shift into a more assertive chapter for the EU, one that may complicate relations with the Trump administration and reset the balance of power between regulators and global platforms.