Regulators from the European Union are gearing up to impose significant penalties on Elon Musk’s social media platform, X, due to violations of a pivotal law aimed at curbing illegal content and misinformation, according to four insiders familiar with the situation. This action is likely to escalate tensions with the United States, particularly since it involves one of President Trump’s closest associates.
These penalties will reportedly consist of a financial fine alongside demands for changes to the platform’s operations, as shared by sources who chose to remain anonymous due to the sensitivity of the ongoing inquiry. An announcement is anticipated this summer, marking the first enforcement under the new E.U. legislation designed to compel social media companies to regulate their platforms more effectively.
European officials are deliberating on the scale of the penalty for X, mindful of the potential repercussions of further straining relations with Mr. Trump in the midst of broader transatlantic tensions surrounding trade, tariffs, and the ongoing conflict in Ukraine. Estimates suggest the fine could exceed $1 billion, as regulators aim to set a precedent with X to deter other firms from breaching the Digital Services Act.
According to E.U. representatives, their investigation of X is advancing independently from ongoing tariff discussions following Mr. Trump’s recent announcement of new trade levies. This inquiry commenced in 2023, following a preliminary ruling issued last year that determined X had contravened the law.
Officials noted that a potential settlement between the E.U. and X could be feasible, provided the company agrees to implement changes that address the regulators’ concerns.
Additionally, X is subject to a broader E.U. investigation that could lead to further penalties. In this inquiry, two sources indicated that E.U. officials are establishing a case against X for its lax approach to moderating user-generated content, which has allegedly turned it into a center for illegal hate speech, misinformation, and other content perceived as undermining democracy within the 27-member bloc.
“We have consistently enforced our laws and will continue to do so fairly and impartially towards all companies operating within the E.U., while fully adhering to international regulations,” stated a spokesperson for the European Commission, the executive arm of the E.U., without specifically addressing X.
Representatives from X declined to make a comment.
Brussels officials anticipate that Mr. Musk, who has publicly criticized European regulations as a form of censorship, will resist any forthcoming regulations. Following the release of the E.U.’s preliminary findings last July, Mr. Musk expressed his eagerness for a “very public battle in court” against any imposed penalties.
Such a scenario could lead to a legal showdown with extensive implications. Should Mr. Musk refuse to comply with E.U. directives for service changes, it may create a stalemate regarding X’s adherence to the regulations.
The investigation into X is being closely monitored as it represents the inaugural major attempt to enforce the Digital Services Act, which mandates greater accountability among companies for moderating their platforms and ensuring transparency about their operations. The law has sparked a contentious discussion in transatlantic circles, with Vice President JD Vance earlier this year equating E.U. regulations to digital censorship.
Following Mr. Trump’s election victory, European regulators took a step back to evaluate the possible consequences of their investigation into X, according to one insider. Recently, as trade strains with the United States heightened, authorities opted to proceed with the inquiry.
In the previous year, European regulators concluded that X was in violation of the law by not supplying data to external researchers, complicating the task of assessing the propagation of misinformation and other harmful content on the platform. Additionally, authorities believe X has failed to deliver adequate transparency regarding advertisers and to authenticate users who pay to obtain a “verified” status, thereby rendering the platform more susceptible to abuse and foreign influence.
Ongoing negotiations have been taking place between the E.U. and X for several months concerning the investigation. Following last year’s preliminary judgment, the company presented numerous points of contention, which regulators are now meticulously reviewing, according to two officials.
E.U. representatives noted that the specific sanction against X will not be finalized until a closer date to the official announcement. Under the Digital Services Act, fines can reach up to 6 percent of a company’s global revenue, although regulators seldom pursue the maximum penalty.
Unlike publicly traded giants like Google, Meta, Apple, and Amazon, X is exclusively owned by Mr. Musk. E.U. regulators are contemplating utilizing a provision of the law that allows them to calculate fines based on revenue that includes other businesses Mr. Musk privately controls, such as SpaceX, his rocket manufacturing company. This could escalate the potential penalty to well over $1 billion, as indicated by one individual.
X is not alone in facing scrutiny from the E.U. Other tech companies, including Meta and Apple, are expected to face penalties for violations of the Digital Markets Act from 2022, intended to enhance competition within the tech sector. Meta is also under investigation for potentially breaching the Digital Services Act by insufficiently safeguarding minors.
These investigations underscore the E.U.’s commitment to aggressively regulating American tech firms. Over the past decade, the E.U. has examined and imposed fines on U.S. tech giants like Amazon, Apple, Google, and Meta for issues related to antitrust practices, inadequate data privacy, and insufficient oversight of user-generated content.
The regulatory posture of the E.U. may have informed the scale of the tariffs that Mr. Trump announced this week against the bloc. Earlier this year, the White House issued a memo indicating that both the Digital Markets Act and Digital Services Act were being scrutinized for allegedly unfairly targeting American enterprises.
