European Union regulators are preparing substantial penalties against X, Elon Musk's social media platform, for alleged violations of the Digital Services Act (DSA), according to sources familiar with the matter.
The anticipated fine could exceed $1 billion, accompanied by mandatory product changes, with an official announcement expected this summer. This would mark the first major enforcement action under the DSA, a landmark EU law aimed at combating illegal content and disinformation on social media platforms.
The investigation, which began in 2023, led to a preliminary ruling that X had violated the law by failing to provide data to researchers, ensure advertiser transparency, and properly verify authenticated accounts.
X's Global Government Affairs team strongly contested the potential penalties, calling them "an unprecedented act of political censorship and an attack on free speech." The company maintains it has "gone above and beyond" to comply with DSA requirements.
Under the DSA framework, regulators can impose fines of up to 6% of a company's global revenue. Sources indicate that EU authorities may consider revenue from Musk's other ventures, including Tesla and SpaceX, in calculating the penalty.
A second, broader investigation is also underway, examining X's content moderation practices. Regulators are reportedly building a case that the platform's approach has allowed it to become a hub for illegal hate speech and disinformation across the EU's 27 member states.
Settlement remains possible if X agrees to implement changes satisfying regulatory concerns. However, Musk has indicated his readiness for a "very public battle in court," suggesting a potentially contentious resolution ahead.
The development occurs amid wider tensions in US-EU relations, particularly regarding trade and tariffs, though EU officials maintain the investigation is proceeding independently of these issues.