EU Pauses DSA Proceedings Against X to Avoid Tensions with Trump
The European Commission has reportedly decided to delay its proceedings against the social media platform X, previously known as Twitter, regarding potential violations of the Digital Services Act (DSA). This pause is said to be a strategic move to avoid aggravating U.S. President Donald Trump amid ongoing trade discussions between the EU and the U.S.
According to sources cited by the Financial Times, the EU had initially intended to reach a decision over the summer on whether X should face sanctions for its alleged non-compliance with DSA regulations. However, the Commission is now holding off on any announcements until clearer trade relations are established. The aim is to prevent further complications in the already sensitive trade negotiations with the U.S.
The DSA, which came into effect to enhance transparency and accountability among online platforms, imposes stricter regulations on large-scale online services. X is categorized as a Very Large Online Platform (VLOP) under this legislation. The Commission is probing multiple claims against X, including issues surrounding user verification practices linked to the platform's paid subscription model and concerns regarding the transparency of advertising practices.
Earlier reports indicated that the EU was contemplating imposing a significant penalty exceeding one billion U.S. dollars against X. This potential fine is intended to serve not only as a punitive measure but also as a deterrent for other companies that might violate DSA guidelines. However, the decision to impose such a fine has now been postponed as the EU navigates its diplomatic relationship with the current U.S. administration.
Elon Musk, the owner of X, has previously expressed his intention to contest any fines through legal channels and public discourse. Behind the scenes, X has allegedly filed numerous appeals against the EU's actions, which the Commission is currently reviewing.
The DSA aims to ensure that platforms like X provide better clarity regarding their content moderation processes and advertising strategies. Given that X's financial information is less accessible since it is no longer publicly traded, assessing the potential fine based on revenue has become more complex. Reports suggest that the EU may consider including revenues from other companies owned by Musk, such as SpaceX, to justify the high penalty.
This situation marks a critical moment in the EU's enforcement of the DSA, highlighting the ongoing tension between regulatory bodies and major tech companies, particularly in the context of U.S.-EU relations.