EU prepares landmark $1 billion fine against Musk’s X over disinformation, citing Digital Services Act violations

The European Union is set to hit Elon Musk’s social media platform X with a potentially billion-dollar penalty for violating the Digital Services Act (DSA), a sweeping new law aimed at curbing illegal content and disinformation on digital platforms.

According to multiple sources familiar with the matter, EU regulators will likely announce the fine this summer, marking the first major enforcement action under the DSA. The case could become a high-stakes legal showdown between Brussels and one of the world’s most powerful tech entrepreneurs and may further strain US-EU relations, particularly under Donald Trump’s second presidential term.

The penalties under consideration go beyond a financial hit. The European Commission is also expected to demand product-level changes to X’s platform design and operations to address gaps in content moderation, user verification, and transparency around advertising.

In a post following the initial report, X pushed back, calling the pending action “an unprecedented act of political censorship and an attack on free speech.” The platform vowed to defend its operations and “protect freedom of speech in Europe.”

Elon Musk himself has previously said he’s prepared for “a very public battle in court,” and has often framed the EU’s rules as a form of state-enforced censorship. But EU officials insist the Digital Services Act is about platform accountability not policing opinions.

“We have always enforced and will continue to enforce our laws fairly and without discrimination toward all companies operating in the EU,” the European Commission said in a statement.

The case against X is particularly significant as the first test case for the DSA, which demands that large platforms take proactive steps to counter harmful content, provide data access to researchers, and maintain transparency in ad practices. X is accused of failing on all three counts.

According to EU officials, the platform did not provide data to external researchers, failed to vet or verify paying users with “verified” blue ticks, and hasn’t maintained a transparent advertising framework, thereby opening the door to disinformation and foreign influence operations.

A second, broader investigation into X is also underway, focusing on whether the platform has become a hub for hate speech, falsehoods, and other illegal content, in part due to Musk’s hands-off approach to moderation.

Under the DSA, regulators can impose fines of up to 6% of global annual revenue. But given that X is privately owned, the EU is also considering using connected revenue from Musk’s other companies like SpaceX to calculate the fine, potentially pushing the penalty north of $1 billion.

While a settlement remains possible if X agrees to compliance changes, officials say the case is moving ahead despite wider political tensions, including Trump’s newly announced tariffs on EU goods.

This isn’t just about X. Other American tech giants are also under pressure. Meta and Apple face pending penalties under the Digital Markets Act, a separate law aimed at promoting competition in the digital economy. Meta is also being scrutinised for allegedly failing to protect minors under the DSA.

The investigation into X is shaping up to be a watershed moment for how Europe regulates global tech. Unlike previous efforts targeting Google or Facebook over antitrust or privacy concerns, this action strikes at the heart of free expression versus platform responsibility, a debate already dividing regulators across the Atlantic.

In February, the White House issued a memo warning that the EU’s Digital Services Act and Digital Markets Act were being closely watched for “unfairly targeting American companies.”