TLDR

• EU regulators considering $1 billion fine against Elon Musk’s X for Digital Services Act violations
• Fine calculation may include revenue from Musk’s other companies like Tesla and SpaceX
• X’s Global Government Affairs team calls it “unprecedented political censorship”
• EU may demand product changes in addition to financial penalties
• X faces a second investigation over hate speech and disinformation concerns

The European Union is preparing to levy a massive fine against Elon Musk’s social media platform X for alleged violations of the Digital Services Act (DSA), potentially reaching $1 billion according to multiple reports. This regulatory action marks a growing tension between EU authorities and the platform formerly known as Twitter.

EU regulators allege that X has failed to comply with the Digital Services Act, which became law in October 2022. The law was created to police social media companies and prevent illegal and harmful content online.

How the Fine Is Calculated

What makes this case unusual is how regulators plan to calculate the fine. According to The New York Times, which cited four anonymous sources familiar with the plans, EU authorities intend to include revenue from Musk’s other companies in their calculations.

The DSA allows regulators to fine companies up to 6% of their global revenue for violations. By including Musk’s other ventures like Tesla and SpaceX in this calculation, the potential fine could reach the $1 billion mark.

This approach has sparked controversy. X’s Global Government Affairs team released a statement claiming that if the reports are accurate, the EU’s actions represent “an unprecedented act of political censorship and an attack on free speech.”

If the reports that the European Commission is considering enforcement actions against X are accurate, it represents an unprecedented act of political censorship and an attack on free speech.  X has gone above and beyond to comply with the EU’s Digital Services Act, and we will…

— Global Government Affairs (@GlobalAffairs) April 4, 2025

The team further stated that “X has gone above and beyond to comply with the EU’s Digital Services Act.” They vowed to “use every option at our disposal to defend our business, keep our users safe, and protect freedom of speech in Europe.”

Beyond Financial Penalties

The EU’s action goes beyond financial penalties. Regulators are also expected to demand product changes to the platform, according to the sources.

The full scope of these penalties is expected to be announced in the coming months. However, a settlement could be reached if X agrees to make changes that satisfy the regulators’ concerns.

This is not the only regulatory challenge facing the platform. One official mentioned that X is facing a second investigation alleging that its approach to policing user-generated content has made it a hub for illegal hate speech and disinformation.

The Investigation Timeline

The EU investigation into X began in 2023. A preliminary ruling in July 2024 found that X had violated the Digital Services Act on multiple fronts.

These violations included refusing to provide data to outside researchers. The platform also failed to provide adequate transparency about advertisers.

Another violation involved failing to verify the authenticity of users who have verified accounts. X responded to these preliminary findings with hundreds of points of dispute.

Musk claimed at the time that he was offered a deal by EU regulators. He alleged they told him X would escape fines if he secretly suppressed certain content on the platform.

Thierry Breton, the former EU commissioner for internal market, denied this claim. In a post on X in July 2024, Breton stated there was no secret deal.

He explained that X’s team had asked for clarification on the settlement process and the Commission’s concerns. Breton insisted their response was in line with “established regulatory procedures.”

Be our guest @elonmusk

There has never been — and will never be — any “secret deal”. With anyone.

The DSA provides X (and any large platform) with the possibility to offer commitments to settle a case.

To be extra clear: it’s *YOUR* team who asked the Commission to… https://t.co/8Wo7DXdap0

— Thierry Breton (@ThierryBreton) July 12, 2024

Musk responded that he was looking “forward to a very public battle in court so that the people of Europe can know the truth.”

The penalties are expected to be announced this summer. Sources suggest that EU regulators are using X as an example to deter other companies from violating the Digital Services Act.

European authorities are reportedly considering the potential backlash from President Trump, given current broader conflicts between the EU and the US regarding trade, tariffs, and geopolitical issues.

A European Commission spokesman declined to comment specifically on this case to The New York Times. However, they did say the Commission would “continue to enforce our laws fairly and without discrimination toward all companies operating in the EU.”

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