Elon Musk’s X could be facing a hefty bill: EU regulators are reportedly finalizing plans to fine the platform around $1 billion for violating the Digital Services Act (DSA). The penalty stems from concerns about X’s content moderation policies and the spread of misleading information.
The New York Times reported that the EU Commission’s penalty will include a fine and demands for product changes, according to sources familiar with the plans.
EU officials launched an investigation in 2023 into X’s content moderation approach, specifically looking into whether it amplified misleading claims. The EU Commission stated the investigation was prompted by a preliminary review of X’s risk assessment report, transparency report, and responses to formal requests for information, particularly related to the dissemination of illegal content regarding Hamas’ attacks against Israel.
Investigators examined X’s compliance with DSA obligations related to the spread of illegal content and the effectiveness of Community Notes in combating it. The size of the potential fine suggests EU authorities were not satisfied with X’s efforts.
Other platforms, including Meta and TikTok, have also been impacted by DSA rules.
This action could further strain relations between the EU and the U.S., particularly given President Trump’s close ties to Musk. The Trump Administration has expressed intentions to defend U.S. businesses against what it perceives as unfair foreign deals. The newly appointed chairman of the FCC has criticized the DSA as “incompatible with America’s free speech tradition.” Furthermore, Vice President JD Vance has criticized EU regulations related to AI innovation, and Trump himself has threatened tariffs on European imports in response to regulations that harm U.S. companies.
X is expected to challenge the fine in court. The platform’s ad revenue is down since Musk’s acquisition, and while the platform recently merged with xAI, a $1 billion penalty would pose a significant financial challenge.
