Elon Musk's X Faces Potential $1 Billion Fine for Disinformation and Hate Speech Violations Under EU Content Rules: Will X Escape the Penalty?

X Faces Potential $1 Billion Fine from EU Regulators

European Union regulators are reportedly preparing to impose a substantial fine on Elon Musk’s social media platform, X, over alleged violations of the Digital Services Act (DSA).

According to sources cited by The New York Times, the fine could exceed $1 billion and might be calculated based on the combined revenue of Musk’s various ventures, including Tesla and SpaceX, not just X.

Digital Services Act Violations Could Lead to Hefty Penalty

The DSA, which was introduced in October 2022, aims to hold social media platforms accountable for illegal and harmful content on their sites.

The law allows for fines of up to 6% of global revenue for companies found in violation.

The European Commission, however, has refused to comment on the ongoing investigation or the potential penalty against X, reaffirming its commitment to enforcing EU laws impartially.

X Defends Its Actions Amid Ongoing Investigation

In response to the reported fine, X’s Global Government Affairs team issued a statement strongly defending the platform’s compliance with the DSA.

The team described the potential fine as an "unprecedented act of political censorship" and an assault on free speech.

The statement read,

"X has gone above and beyond to comply with the EU’s Digital Services Act, and we will use every option at our disposal to defend our business, keep our users safe, and protect freedom of speech in Europe."

Investigations Into Content Moderation Practices Deepen

The ongoing investigation, which started in 2023, has focused on X’s handling of user-generated content.

A preliminary ruling in July 2024 found that the platform had violated several provisions of the DSA, including its failure to provide transparency about advertisers, verify users’ authenticity, and share data with external researchers.

The European Commission has not disclosed any formal findings yet but has made it clear that it will continue to enforce regulations across all companies operating within the EU, regardless of their size or origin.

Musk Calls Out EU for Alleged Secret Deal Talks

Elon Musk has previously spoken out about his frustration with the EU regulators.

Last July, Musk himself claimed that EU regulators offered a secret deal to escape fines and X did not accept.

Musk also rejected Thierry Breton’s claims, the former EU commissioner for the internal market, responding,

"I’m looking forward to a very public battle in court so that the people of Europe can know the truth.”

Breton subsequently dismissed Musk’s claims, insisting that “there has never been — and will never be — any “secret deal”.

He added that it was the X team “who asked the Commission to explain the process for settlement” and to clarify their concerns.

Therefore, they did as requested “in line with established regulatory procedures”.

Second Investigation Into Hate Speech and Disinformation

In addition to the potential fine, X is facing a second investigation from EU regulators related to its alleged failure to adequately police hate speech and disinformation on the platform.

This probe could lead to further penalties, depending on the findings.

Sources indicated that the regulators are closely monitoring how X handles user-generated content, raising questions about whether the platform is doing enough to prevent illegal and harmful activities.

Possible Settlement Could Avoid Additional Penalties

Despite the serious nature of the ongoing investigations, there remains the possibility that a settlement could be reached.

If X agrees to make changes that satisfy EU regulators, the company could avoid further penalties.

However, regulators are still reviewing the case, and the full scope of any penalties, including the fine, could be announced in the coming months.