European Union regulators are preparing key penalties for Elon Musk's social media platform X to break groundbreaking laws to combat illegal content and disinformation, four people with knowledge of the plan said the move is likely to raise tensions with the US by targeting one of President Trump's closest advisors.
The penalty is set to include requests for fines and product changes, said those who refused to identify discussion of the ongoing investigation. These are expected to be announced this summer and will first be issued under new EU laws aimed at enforcing social media companies to serve them, they said.
European authorities have weighed the size of the fines that issue X as they consider the risk of further hostility to Trump amid the wider transatlantic conflict over trade, tariffs and war in Ukraine. The fines could exceed $1 billion as regulators try to cite an example of X to block other companies from violating a law called the Digital Services Act.
EU officials said the X investigation is progressing independently from tariff negotiations after Trump announced major new taxes this week. The investigation began in 2023, and last year regulators issued a preliminary ruling that X violated the law.
The EU and X could still reach a settlement if they agree to changes that meet regulatory concerns, officials said.
X is also facing a broader second EU investigation, which could lead to further penalties. The investigation said EU officials were building a case in which X's handoff approach to policing user-generated content has become a hub for illegal hate speech, misinformation and other material that is deemed to be inadequate democracy across 27 blocs of countries.
A spokesperson for the European Commission said, “We continue to enforce the law fairly without discrimination against all companies operating in the EU, and a spokesperson for the European Commission who refused to comment specifically on X.
X declined to comment.
Officials in Brussels hope that Musk, who criticized European policy as a form of censorship, will fight any regulation. After the EU's preliminary findings were released last July, Musk said he looks forward to fighting for a penalty in a “very public battle in court.”
It could set up a widespread influence and legitimate conflict. If Musk refuses to comply with EU orders to change services, it could address how to comply with X.
X's investigation is closely monitored as the first major attempt to implement the Digital Services Act. This requires businesses to better police their platforms and provide ample transparency about how services work. The law has sparked the transatlantic debate on freedom of speech, with Vice President JD Vance comparing EU regulations to digital censorship in February.
After Trump was elected, European regulators slowed the X investigation to assess potential fallout, one said. Recently, as trade tensions with the US intensified, authorities have decided to go ahead.
Last year, European regulators concluded that X was violating the law by refusing to provide data to external researchers, making it difficult to measure how disinformation and other harmful material spreads to the service. Authorities also believe that X provides appropriate transparency to advertisers, verifying the credibility of users paying to have “verified” accounts, making the platform more vulnerable to abuse and foreign interference.
The EU and X have been debated for several months on research. After last year's preliminary ruling against X, the company responded with hundreds of points of dispute that regulators are working to counter it, two officials said.
EU officials said the exact penalty for X will not be decided until it approaches the final announcement. Under the Digital Services Act, businesses could be fined up to 6% of global revenue, but regulators rarely pursue the biggest penalty.
Unlike Google, Meta, Apple and Amazon, the published X is owned by Musk alone. EU regulators are considering using some of the laws that allow them to calculate fines based on revenue, including other companies Musk personally controls, such as rocket maker SpaceX. This increases when the potential penalty is well above $1 billion, one said.
X is not the only high-tech company in EU crosshairs. Regulators are expected to announce penalties against meta and Apple for violating the Digital Markets Act, a 2022 law aimed at boosting competition in technology. Meta is under investigation as it could violate the Digital Services Act by inadequately protecting minors.
The survey shows that the EU is planning to continue aggressive regulation of the US tech giants. For more than a decade, the EU has investigated or fined US tech giants, including Amazon, Apple, Google and Meta, and has weakly monitored anti-competitive business practices, LAX data privacy and user-generated content.
European technical regulations may have played a role in the scale of tariffs Trump announced this week on the EU in February, with the White House publishing a memo saying that Digital Markets and Digital Services Acts are under scrutiny for unfairly targeting American businesses.
