
EU plans whopping $1B penalty against Elon Musk's X—Here's why
What's the story
The European Union (EU) is said to be mulling a hefty fine of over $1 billion on Elon Musk's social network, X.
The potential penalty comes over alleged violations of the bloc's Digital Services Act.
The move could be the first major enforcement of this law, which seeks to rein in illegal content and disinformation on digital platforms.
Regulatory scrutiny
Investigation reveals regulatory breaches by X
The potential fine against X comes after a 2023 investigation by EU regulators.
The probe found that X broke the law by not being transparent about its advertising practices, not giving researchers access to disinformation data, and inadequately authenticating users with "verified" accounts.
A wider investigation is also ongoing, looking into whether X's limited content moderation has allowed hate speech and disinformation to thrive in the 27-member bloc.
Possible consequences
X's potential penalties and response to allegations
If found in violation again, X could face more penalties. Under the Digital Services Act, these fines are capped at 6% of a company's global revenue.
As a Musk-owned company, regulators are debating whether to factor in revenue from his other ventures such as SpaceX in the penalty calculation, which could raise the potential fine to over $1 billion.
Responding to the allegations, X has denied any wrongdoing and said it plans to contest them vigorously.
Free speech concerns
Musk's history with European online regulation
Musk has a history of opposing European online regulation, seeing it as a threat to free speech.
In 2024, he vowed to contest any ruling in court, promising "a very public battle."
The EU's scrutiny of X comes amid escalating trade tensions. The Trump administration recently imposed new tariffs on European goods, and there's concern that additional penalties on American tech companies could further strain diplomatic relations.
Regulatory resilience
EU remains steadfast amid increasing trade tensions
Despite the rising trade tensions, the EU remains unfazed.
A European Commission official said that they have always enforced their laws equally and without bias to all companies operating in the EU.
Notably, X is not alone under EU's scrutiny. Meta and Apple are also likely to face penalties under the 2022 Digital Markets Act, designed to foster competition in the tech sector.