U.S. regulators could impose fines on several Musk companies for violations of the Digital Services Act.
Musk's other companies seem to be much more solvent than X.
The European Union has notified X that it may consider the revenues of several Elon Musk companies to calculate fines imposed on the platform for violations of social media laws. According to information from experts on the subject, European regulators are evaluating the inclusion of annual revenues from Musk's other companies—such as SpaceX, Neuralink, xAI, and The Boring Company—in the calculation of penalties. X is facing an investigation for possible violations of various provisions of the EU's Digital Services Act (DSA), a comprehensive piece of legislation that requires major platforms to remove illegal content and holds them financially accountable if they fail to do so.
Under the DSA, which was approved in 2022, regulators can impose fines of up to 6% of a company's annual revenue for failing to comply with transparency rules or for not addressing illegal content or misinformation on their platforms. It has been suggested that the EU is considering the possibility of fining Musk instead of X. If this is the case, the amount of the penalty would be calculated based on the annual revenues of the companies Musk leads. It has been clarified that Tesla, being publicly owned, would be excluded from this assessment.
It is possible that these increased fines are related to the drastic decline in X's revenue since Musk took control. The platform was valued at $9.4 billion in August, reflecting a nearly 80% drop since it was acquired by Musk, according to disclosures from Fidelity’s Blue Chip Growth Fund.
Thomas Regnier, a spokesperson for the commission, clarified that the obligations of the DSA apply "regardless of whether the entity exerting decisive influence over the platform or search engine is a natural or legal person." However, the commission has not yet made a decision on whether to sanction X, and there are indications that the social media platform could avoid fines if it addresses the concerns raised by the commission, though this seems unlikely given Musk's stance.
After expressing in 2022 that he shared the same goals as the EU regarding the DSA, Musk changed course the following year by removing X from the EU Code of Practice on Disinformation, a voluntary agreement that preceded the mandatory provisions of the DSA. Since then, Musk has publicly criticized the commission and has had confrontations with Thierry Breton, its former president, who led the investigation against X before resigning last September. The decision to impose sanctions on X, as well as on Musk's other companies, now falls to Margrethe Vestager, Breton's successor.
