EU Considers Over $1 Billion Fine for X Under DSA Violations

The European Union is reportedly advancing its investigations into potential violations of the Digital Services Act (DSA) by the social media platform X, owned by Elon Musk. According to sources cited by the New York Times, the EU is contemplating imposing a substantial penalty that could exceed one billion euros.

The DSA stipulates that fines can reach up to 6% of a company's global revenue, a threshold that would not typically be met by X. However, EU officials are exploring the possibility of including revenues from Musk's other enterprises, such as SpaceX, in the calculation.

This inquiry into X's operations was initiated last summer, with concerns focused on issues such as the platform's management of its verification processes, particularly the blue checkmark system that has recently transitioned from a verification tool to a premium feature for paying users. Other points of contention include the platform's transparency in advertising practices and its perceived lack of support for scientific endeavors.

The investigation had reportedly slowed down following Donald Trump's election victory in the United States but gained momentum again amid a renewed trade conflict. This situation has sparked considerable debate, as the EU's actions against X are seen as a significant move to enforce compliance with the DSA, which has already become a contentious topic in discussions with the current U.S. administration.

Internally, X has filed numerous appeals against the EU's findings, which are currently under review by the Commission. Musk has previously stated his intention to contest any fines both legally and publicly, a stance that the platform has reiterated in light of the impending penalties. According to sources, the potential fine is intended to serve as a deterrent to other companies that may be in violation of the DSA.

The DSA has been in full effect for a year and mandates that online platforms enhance transparency regarding content moderation and advertising. The most stringent obligations apply to Very Large Online Platforms (VLOPs), a classification that X has held since April 2023. Since Musk took the company private, its revenue figures have become less transparent, but estimates suggest that X generated approximately $2.2 billion in 2024, which would imply a maximum penalty of around $100 million under normal circumstances. The EU's consideration of a much larger fine indicates the seriousness of the situation.