EU to impose major penalties on Elon Musk's X for violating disinformation law

The European Union regulators are preparing to impose significant penalties on Elon Musk ’s social media platform X for breaching the Digital Services Act (DSA), a landmark law aimed at curbing illicit content and disinformation , according to a report by The New York Times. The penalties, expected to be announced this summer, could include a fine exceeding $1 billion and mandatory changes to the platform’s policies.

The penalties would be the first issued under the DSA, which requires tech companies to police content and provide transparency regarding their operations. European officials told NYT that they are deliberating on the fine’s magnitude while considering potential diplomatic repercussions, particularly in light of ongoing trans-Atlantic disputes over trade, tariffs, and the war in Ukraine.

EU’s escalating scrutiny on X

The EU investigation into X began in 2023, with regulators issuing a preliminary ruling last year that found the platform had violated the law. Officials claim X failed to provide external researchers with data needed to assess disinformation and other harmful content. They also argue that the platform lacks adequate transparency about advertisers and fails to verify the authenticity of users paying for “verified” accounts, increasing its vulnerability to abuse and foreign interference.

While the EU insists that its probe is separate from recent trade tensions, NYT reports that regulators had initially slowed their investigation following Donald Trump’s election victory to gauge the potential fallout. However, as tensions between the US and the EU intensified, European authorities opted to move forward with penalties against X.

A second, broader EU probe into X is also underway. According to NYT, investigators are building a case that the platform’s hands-off approach to content moderation has made it a hub for illegal hate speech, disinformation, and other material deemed a threat to democracy across the 27-nation bloc. This could lead to additional penalties in the future.

Musk’s defiance and X’s response

Following the publication of the NYT report, X issued a statement denouncing the EU’s potential actions as “an unprecedented act of political censorship and an attack on free speech.” The company vowed to challenge any penalties and “defend freedom of speech in Europe.”

Elon Musk has previously criticised European regulations, characterising them as censorship. When the EU released its preliminary findings in July, Musk responded defiantly, stating he looked forward to contesting any penalties in “a very public battle in court.” If X refuses to comply with EU demands for changes, it could escalate into a legal standoff with far-reaching implications.

A European Commission spokesperson told NYT, “We have always enforced and will continue to enforce our laws fairly and without discrimination toward all companies operating in the EU, in full compliance with global rules.” The commission declined to comment specifically on the ongoing X investigation.

Regulatory crackdown extends beyond X

The EU’s scrutiny is not limited to X. According to NYT, regulators are also preparing to penalise Meta and Apple for breaching the Digital Markets Act (DMA), a 2022 law aimed at promoting competition in the tech industry. Meta is also facing a separate DSA probe for allegedly failing to protect minors on its platforms.

For more than a decade, EU regulators have aggressively targeted American tech giants, including Amazon, Google, Apple, and Meta, with fines and investigations over antitrust concerns, data privacy violations, and content moderation lapses. The latest enforcement efforts signal the EU’s continued push for stricter oversight of US-based tech firms.

NYT also notes that EU regulations may have influenced the scope of the tariffs announced by Trump’s administration against European industries. In February, the White House warned that the Digital Markets Act and Digital Services Act were under scrutiny for allegedly discriminating against American firms, adding another layer of complexity to an already tense trans-Atlantic relationship.

With the EU’s final decision on X’s penalties expected in the coming months, all eyes will be on how Musk and his company navigate this latest regulatory battle.