EU Reportedly Set to Fine Elon Musk’s X Over $1 Billion for Violating New Digital Act; X Labels It ‘An Unprecedented Act of Political Censorship’ – Meta Platforms (NASDAQ:META), Apple (NASDAQ:AAPL)

The European Union is reportedly preparing to levy a hefty fine on X, a social network owned by Elon Musk. The fine, which could exceed $1 billion, is expected to be announced this summer.

What Happened: This penalty would be the first under the new EU law. The fine could exceed $1 billion as regulators seek to discourage other companies from breaching the Digital Services Act, reported The New York Times.

A source told the publication that the European regulators “..want it to be big enough to pressure other companies to comply with the law.”

The European Commission concluded last year that X had breached the Digital Services Act, aimed at tackling unlawful content and misinformation. The regulators are now deliberating on the appropriate penalty. “The penalties are set to include a fine and demands for product changes,” the Times reported, citing four individuals familiar with the plans.

X’s global government affairs account hit back at the European regulators on Friday. “If the reports that the European Commission is considering enforcement actions against X are accurate, it represents an unprecedented act of political censorship and an attack on free speech,” X stated.

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Additionally, a separate EU investigation is ongoing, building a case that X’s lax approach to monitoring user-generated content has made it a hub for illegal hate speech and disinformation, potentially leading to further penalties.

Why It Matters: The EU launched a formal investigation into X in December 2023 to examine possible violations of the Digital Services Act, focusing on areas such as risk management, content moderation, dark patterns, advertising transparency, and researcher access to data.

Notably, in late March, the European regulators decided to impose minimal fines on Apple Inc. AAPL and Meta META To avoid any pushback from the Trump administration.

This development comes on the heels of Elon Musk‘s other ventures facing challenges in Europe. Earlier this month, Tesla Inc. TSLA witnessed a decline in sales in key European markets for three consecutive months. This downturn has been attributed to increasing competition from China and backlash against Musk’s political activities.

With the EU’s impending fine on X, Musk’s business interests in Europe could face further headwinds. The fine and potential product changes could have significant implications for X and other tech companies operating in the region.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.