The European Union has reportedly warned X that it could use the revenue of several companies owned by Elon Musk to calculate fines levied against the platform for violating social media laws. European regulators may take the annual revenues of Musk’s other companies — including SpaceX, Neuralink, xAI, and the Boring Company — into account to calculate fines, people familiar with the matter told Bloomberg.
X is being investigated for potentially violating several provisions of the EU’s Digital Services Act (DSA), a sweeping law that requires major platforms to remove posts that contain illegal content — and holds them financially accountable if they don’t. Under the DSA, which was passed in 2022, regulators can fine companies as much as 6% of their yearly annual revenue for failing to follow transparency rules or address illegal content or disinformation on their platforms.
People familiar with the deliberations told Bloomberg that the EU is essentially debating whether Musk should be fined instead of X itself. If so, regulators would calculate the amount based on the annual revenues of several companies he owns. Since Tesla is publicly owned, it would be excluded.
It’s possible that these expanded fines are related to X’s plummeting revenue under Musk’s tenure. X is valued at $9.4 billion as of August, amounting to a total markdown of nearly 80 percent since Musk purchased it, according to disclosures from Fidelity’s Blue Chip Growth Fund.
DSA obligations apply “irrespective of whether the entity exercising decisive influence over the platform or search engine is a natural or legal person,” Thomas Regnier, a spokesperson for the commission, told Bloomberg.
Still, the commission has yet to decide whether to fine X at all, and people familiar with the situation told Bloomberg that the social platform could avoid fines if it addresses the commission’s concerns — which Musk is unlikely to do.
After saying he was “very much on the same page” as the EU regarding the DSA in 2022, Musk made an about-face, pulling X out of the EU’s Code of Practice against disinformation the following year. The Code of Practice was a voluntary agreement that served as a precursor to the mandatory provisions of the DSA. Since then, Musk has publicly criticized both the commission and antagonized its former head, Thierry Breton, who spearheaded the investigation into X before resigning this September. The relationship was mutually contentious: Breton once sent Musk a letter warning that he’d be watching for “spillover” DSA violations.
The decision to fine X — and Musk’s other companies — now rests with Margrethe Vestager, Breton’s successor.