TLDR:
- EU warns X of potential fines for violating content moderation rules
- Fines may include revenue from Musk’s other companies like SpaceX and Neuralink
- Penalties could reach up to 6% of yearly global revenue under Digital Services Act
- EU is investigating X for potential breaches of new online content regulations
- X and Musk could challenge any EU decision in court
The European Union is contemplating an expansion in how it calculates potential fines against X, the social media platform owned by Elon Musk.
This comes as part of the EU’s ongoing investigation into X’s compliance with the Digital Services Act (DSA), a set of regulations aimed at curbing illegal content and disinformation on online platforms.
Under the DSA, the EU can impose fines of up to 6% of a platform’s annual global revenue for violations. However, in a move that could substantially increase the financial impact of any penalties, EU regulators are considering whether to include revenue from Musk’s other companies in this calculation.
This would encompass earnings from SpaceX, Neuralink, xAI, and the Boring Company, in addition to X’s own revenue.
The rationale behind this approach stems from X’s status as a private company under Musk’s sole control. By potentially including revenue from Musk’s other ventures, the EU is effectively weighing whether to treat Musk himself as the entity to fine, rather than X as a standalone company.
Tesla’s revenue would be exempt from this calculation due to its status as a publicly traded company not fully controlled by Musk.
The EU has not yet decided whether to penalize X, and discussions about the size of any potential fine are ongoing. The platform may still avoid penalties if it can address the watchdog’s concerns satisfactorily.
X would have the opportunity to challenge any EU decision in court, a course of action Musk has previously indicated he would pursue.
The investigation into X is part of a broader EU crackdown on harmful online content and disinformation. This initiative has faced criticism from Musk, who argues that such measures restrict free speech.
The EU’s approach to regulating online platforms has global implications, as other countries often look to EU regulations as a model for their own policies.
The current review of X began under Thierry Breton, the EU’s former tech czar, who had been granted special powers to enforce the DSA. Following Breton’s resignation in September, these powers were transferred to Margrethe Vestager, the EU’s competition and digital boss. Vestager will ultimately be responsible for decisions regarding penalties and how they are calculated.
The EU’s stance on this matter reflects a growing trend of holding tech companies and their leadership accountable for content moderation practices. By considering the inclusion of revenue from Musk’s other companies, the EU is signaling a willingness to take a more comprehensive approach to enforcement.
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