EU vows to pursue €120 million fine on X after US backs Musk's court challenge

The European Union's executive arm said Friday it is prepared to defend a €120 million ($137 million) fine against the social media platform  X after the US government threw its support behind a legal effort by Elon Musk to have the case dismissed. 

The European Commission fined X late last year for breaches of the bloc’s landmark digital protections, stoking tensions with Washington.

The EU fine against X, which followed a two-year investigation, was the first penalty issued under the bloc's digital regulations governing online content. Regulators said X’s paid-for blue checkmarks violate the EU's online transparency obligations.

"On X, anyone can pay to obtain the ‘verified' status without the company meaningfully verifying who is behind the account," the European Commission said in a press release at the time. 

The US Justice Department said Thursday that it had filed an application to support X's bid to have the case annulled at the European Union's General Court.

Defending Musk

It was the second time in three months that the Justice Department has intervened to defend a company owned by Musk. 

In July, the Justice Department filed a motion to intervene in a civil rights lawsuit that alleges Musk’s xAI is illegally running dozens of natural gas turbines to power a $20 billion AI data centre in Mississippi. 

In that case, the NAACP and other rights groups said xAI failed to get a permit for its power plant – which is located near homes, schools and churches – creating health risks for families in north Mississippi and nearby Memphis, Tennessee, in violating the federal Clean Air Act.

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US President Donald Trump and the world's richest man appear to have dialled down a war of words that stunned Washington and Wall Street alike last year after Musk called Trump's tax breaks and spending cuts a “disgusting abomination”.

Musk on Thursday evening attended a state dinner held by Trump honouring China’s leader Xi Jinping along with other tech titans. 

European Commission spokesperson Thomas Regnier said Thursday that it is the EU’s “sovereign right” to draft legislation aimed at protecting its citizens.

“We are enforcing our legislation objectively, transparently and with a solid case,” he told reporters. “We are ready to defend our position in court. We have a lot of evidence at our disposal, and it will be for the court to decide, as always.”

The commission is the top enforcer of the 27-nation EU's Digital Services Act (DSA), which requires tech companies to increase transparency, strengthen user protections and give audiences greater control when they navigate online platforms or face hefty financial penalties.

But the rulebook has become a flashpoint with the Trump administration, and US officials have criticised it as amounting to online censorship. 

Elon Musk's X faces French investigation over child abuse images

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The Justice Department warned that the fine, if upheld, “may have significant implications” for US online platforms and other companies providing digital services in the EU. 

Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division said in Thursday's statement that the "European Commission inappropriately attempted to expand its regulatory authority to reach American companies not present or operating within its jurisdiction.” 

“We will not tolerate the European Commission engaging in regulatory overreach to try and control American engines of innovation and economic growth,” he said. 

When asked whether the Justice Department had informed the commission that it intended to back Musk, Regnier said: “We do not need to be informed about anything.”

He said the commission doesn't expect the case to hurt broader relations between Brussels and Washington, notably in talks to mitigate the damage of Trump administration tariffs. 

“From our perspective, nothing will change because of a DSA case,” he said.