The European Union has started exploring the idea of broadening its penalty range for Elon Musk’s social media platform, X, by potentially including the revenue from Musk’s other ventures like SpaceX and Neuralink. The EU’s investigation, centered on X’s compliance with the Digital Services Act (DSA), is examining how far they can stretch the consequences if the platform is found to violate content moderation rules.
Regulators are figuring out if the fines could apply to the larger scope of Musk’s private empire, not just X’s own earnings. This means SpaceX, Neuralink, xAI, and The Boring Company could find themselves linked to these financial penalties. With the DSA allowing fines as high as 6% of a company’s global revenue, the implications here could be massive.
Will SpaceX and Neuralink Get Tangled in X’s Problems?
As X is solely owned by Musk, EU authorities are debating whether Musk’s various enterprises should be factored into any potential fines. While Tesla, which is publicly traded, won’t be included in the fine calculations, private companies like SpaceX and The Boring Company might not escape. By calculating the fines based on the entirety of Musk’s businesses, the EU is effectively assessing whether Musk himself should bear responsibility for X’s regulatory shortcomings.
The discussion about X’s compliance is still ongoing, and no decision has been made yet regarding actual penalties. However, it’s clear that regulators are considering a broader financial base for these fines.
Musk’s Fight Against EU Regulation Could Escalate
Musk has shown no interest in backing down quietly. In the past, he’s publicly stated that if the EU slaps him with fines under the DSA, he’s ready to take it to court. He’s previously referred to such penalties as infringing on free speech, voicing his concerns that the law overreaches. This wouldn’t be the first time Musk has squared off with European officials either.
It was Thierry Breton, the former EU tech chief, who first initiated this review of X’s practices under the DSA. Breton, who’s had his fair share of online clashes with Musk, held special enforcement powers to pursue penalties without needing approval from other bodies. However, since his resignation in September, Margrethe Vestager, the competition and digital affairs commissioner, has taken over the responsibility. Any decision on fines will rest with her office moving forward.
Regulators Broaden Their Focus Beyond Just Social Media
The EU’s crackdown on X is part of a much larger effort to ensure that online platforms are moderating illegal content more effectively. The DSA is at the center of this push, and X’s violations are viewed as a critical test case for how far the EU can go in holding tech companies accountable.
By thinking about including revenue from Musk’s other businesses in their penalty calculations, the EU is exploring a whole new frontier of corporate responsibility. It’s clear that the approach regulators are taking is evolving. Instead of just slapping fines on social media platforms, they may now be looking at the people controlling those platforms and how their broader empires come into play.
More Legal Trouble Looming for X
X isn’t just facing pressure from the EU’s Digital Services Act investigation—it’s caught in the middle of multiple legal battles that stretch across different jurisdictions and legal areas. These lawsuits not only concern regulatory compliance but also dive into issues like intellectual property, free speech, and copyright infringement.
A legal-marketing firm, X Social Media, has filed a trademark infringement lawsuit, accusing X Corp of stepping on their rights with its recent rebranding. This suit seeks to stop Musk’s company from using the letter “X” and is demanding compensation for damages. It’s just one of many cases that have followed since the platform’s rebrand.
There’s also a looming $250 million music copyright infringement case. The National Music Publishers’ Association, along with 17 publishers, claim that X allowed the unauthorized use of nearly 1,700 songs without permission, pushing for substantial damages.
In California, X Corp is fighting against a transparency law that requires social media companies to disclose policies regarding disinformation, harassment, and extremism. Musk’s team argues that this state law interferes with free speech, and they’ve taken the case to court and succeeded for now, winning an appeal.
Musk himself is entangled in a separate legal mess: a shareholder fraud lawsuit. A judge has ruled that Musk will need to answer to allegations that he delayed disclosing his stake in the company, harming former Twitter shareholders in the process.
Outside the U.S., X is facing mounting pressure in Brazil, where concerns over disinformation and the lack of a legal representative in the country could lead to a full ban of the platform. The ongoing dispute with Brazilian authorities marks another significant legal hurdle for the company.
And in another case, X has turned the tables, filing a lawsuit against the Global Alliance for Responsible Media (GARM) and some of its major advertisers. Musk’s legal team alleges that GARM members have acted in concert in ways that have harmed the platform’s advertising practices.
Finally, X is involved in a suit involving the Center for Countering Digital Hate (CCDH), which accuses the platform of wrongfully making false claims. However, this case might not go far—early indications suggest a judge may dismiss it.