The European Union (EU) has issued a stark warning to X (formerly Twitter) that it may levy substantial fines on the social media platform, potentially including revenue from Elon Musk’s other ventures like SpaceX and Neuralink, Bloomberg reports.
This unprecedented approach could significantly increase the potential penalties for X’s alleged violations of content moderation rules.
Under the EU’s Digital Services Act (DSA), the bloc has the power to impose fines of up to 6% of a platform’s annual global revenue for failing to address illegal content, disinformation, or transparency requirements. EU regulators are currently exploring whether to factor in sales from Musk’s other companies, including SpaceX, Neuralink, xAI, and the Boring Company, alongside X’s social media revenue, when determining potential fines.
The European Commission is actively investigating X for possible breaches of the DSA, which aims to ensure online platforms effectively police harmful content. This move is part of a global crackdown on online harm and disinformation, which has sparked strong reactions from Musk, who has argued that such measures infringe on free speech.
The commission’s consideration of including revenue from Musk’s other businesses raises a crucial question: should Musk himself be considered the entity liable for fines, rather than X as a separate entity? This approach is particularly noteworthy given that X operates as a private company under Musk’s sole control. However, Tesla Inc.’s sales are reportedly exempt from this calculation due to its public trading status and Musk’s lack of full control over the company.
The commission has yet to make a decision on whether to penalize X, and the final amount of any fines remains under discussion. However, X could potentially avoid penalties by addressing the EU’s concerns.
X would also have the right to challenge any EU decision, but the commission ultimately holds the final authority. X has not responded to requests for comment, but Musk has previously stated on X his intention to contest any DSA fines through “a very public battle in court.”
The review of X initially began under Thierry Breton, the EU’s former tech czar, who frequently clashed with Musk online and was granted special powers to enforce the DSA without the need for commission approval. Following Breton’s resignation in September, his enforcement authority was transferred to Margrethe Vestager, the EU’s competition and digital boss, who will ultimately decide on any penalties and the method of calculation.
