EU May Fine Elon Musk's X $1 Billion For Violating Digital Services Act

European Union regulators are reportedly considering a significant fine against Elon Musk’s X, potentially reaching $1 billion. This penalty is in response to allegations that X has violated the Digital Services Act, which was enacted in October 2022 to regulate social media companies and prevent illegal and harmful activities online. The fine could be calculated based on the revenue from Musk's other ventures, including tesla and SpaceX, according to a report citing four individuals familiar with the plan.

The EU's Digital Services Act allows for fines of up to 6% of a company's global revenue for violations. X's Global Government Affairs team has responded to these reports, stating that if accurate, the EU's plans represent an "unprecedented act of political censorship and an attack on free speech." The team also asserted that X has made significant efforts to comply with the EU's regulations and will defend its business and users' safety while protecting freedom of speech in Europe.

In addition to the potential fine, EU regulators may demand changes to X's products. The full scope of any penalties is expected to be announced in the coming months. However, a settlement could be reached if X agrees to changes that satisfy the regulators. X is also facing a second investigation alleging that its approach to policing user-generated content has made it a hub for illegal hate speech and disinformation, which could result in additional penalties.

The EU investigation into X began in 2023. A preliminary ruling in July 2024 found that X had violated the Digital Services Act by refusing to provide data to outside researchers, failing to offer adequate transparency about advertisers, and not verifying the authenticity of users with verified accounts. X responded to the ruling with numerous points of dispute, and Musk claimed that EU regulators offered him a deal to secretly suppress certain content in exchange for avoiding fines. Thierry Breton, the former EU commissioner for internal market, denied any secret deal and stated that X's team had requested clarification on the settlement process, which was handled according to established regulatory procedures. Musk expressed his intention to engage in a public legal battle to reveal the truth to the people of Europe.

This development underscores the EU's commitment to enforcing its Digital Services Act, which aims to create a safer online environment by holding social media platforms accountable for the content they host. The potential fine and product changes demanded by regulators highlight the seriousness with which the EU views compliance with its regulations. X's response, which includes a willingness to defend its actions in court, suggests a contentious legal battle ahead. The outcome of this dispute could set a precedent for how the EU enforces its digital regulations and how social media companies operate within the bloc.