The EU is aiming to resolve pending matters by year-end, with Elon Musk once again in the spotlight.
Henna Virkkunen, the EU’s digital affairs chief, has indicated plans to conclude multiple ongoing investigations into tech giants by the end of the month. Central to these is the EU’s prolonged probe into Musk’s X platform under the Digital Services Act (DSA)—a nearly two-year investigation that serves as a landmark case for testing the bloc’s content moderation rules.
The European Commission, the EU’s executive arm, has accused X (which has 102 million users in the EU) of three violations: breaching transparency requirements, blocking researchers’ access to data, and misleading users by converting the verified “blue check” badge into a paid feature. Musk has stated he will not settle the investigation through concessions but will challenge any sanctions in court. If upheld, X could face fines of up to 6% of its global annual revenue. Earlier this year, Musk merged X with his AI lab xAI (XAAI.PVT), a competitor to OpenAI (OPAI.PVT).
Regulators are also considering extending fines to Musk’s broader business empire, which spans aerospace, infrastructure, and neuroscience, with combined estimated revenues of $18 billion this year. The Commission has yet to decide whether to impose penalties on X or close the case without further action.
This standoff highlights deepening transatlantic tensions over digital sovereignty, as Europe seeks to position itself as a global rulemaker while relying heavily on U.S. tech in social media, AI, and cloud computing. Any sanctions against Musk could provoke U.S. retaliation, complicating EU-U.S. relations amid trade disputes and geopolitical cooperation on issues like Ukraine.
Alberto Alemanno, an EU law professor at HEC Paris, noted, “Any escalation in this case could trigger a U.S. response, affecting broader EU interests—whether in Ukraine or transatlantic trade.”
The alleged violations under investigation are unlikely to warrant maximum fines, reserved for the most severe breaches. More serious concerns—such as X’s handling of illegal content, election disinformation, and its Community Notes feature—have not yet been included in preliminary findings.
The DSA’s definition of “service provider,” which determines penalty calculations based on revenue, adds complexity. The Commission has hinted at holding Musk personally liable, not just X, mirroring its approach under antitrust rules. A 2024 inquiry document revealed regulators considered the entire “Musk Group” (privately held) when debating stricter measures, though Tesla Motors (TSLA) was excluded as a publicly traded entity not fully controlled by Musk.
Among Musk’s companies under potential scrutiny, SpaceX (SPAX.PVT) is the largest, with projected 2025 revenue of $15.5 billion. X’s ad revenue is estimated at $2.3 billion this year, while xAI may generate $500 million. The Boring Co. and Neuralink have minimal or no reliable revenue data.
X declined to comment on the ongoing probe. A Commission spokesperson reiterated that “X’s service provider” must comply with DSA obligations.
As the EU nears a decision, critics accuse Brussels of softening enforcement to appease the Trump administration, where Musk has been a key supporter and former advisor. The U.S. has framed EU fines and regulations as “de facto tariffs” justifying trade retaliation, with Commerce Secretary Howard Lutnick recently urging digital rule revisions to advance tariff negotiations.
Despite this, the EU continues enforcing digital antitrust rules, recently fining Apple Inc. (AAPL) €500 million ($584 million) and Meta Platforms Inc. (META) €200 million. Past penalties include over $8 billion in traditional antitrust fines against Alphabet Inc.’s (GOOGL) Google and a €1.3 billion tax order for Apple in Ireland.
Bloomberg Intelligence analyst Tamlin Bason observed, “EU enforcement has visibly slowed post-Trump. Fines against Apple and Meta under the Digital Markets Act represent a fraction of their revenue, far below the 10% legal cap.”
The Commission denies linking trade talks to tech regulation, attributing lengthy investigations to “due process.”
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