European Union regulators are exploring the possibility of calculating potential fines for Elon Musk’s X platform (formerly Twitter) by factoring in revenue from Musk’s other companies, such as SpaceX, Neuralink, xAI, and the Boring Company, according to a Bloomberg report published today. This move could greatly increase the financial penalties X might face for violating the Digital Services Act (DSA).
The DSA is designed to regulate major online platforms in Europe, ensuring they effectively manage harmful content, disinformation, and other issues. If platforms like X fail to comply with its provisions, they could face fines as high as 6% of their worldwide annual turnover. For X, this could mean a hefty fine, particularly given its advertising struggles since Musk’s takeover.
Revenue Inclusion Beyond X
Bloomberg sources reveal that European regulators are contemplating whether to include the revenue streams of Musk’s other companies in the calculation of X’s fines. SpaceX, Neuralink, xAI, and the Boring Company—ventures also led by Musk—could potentially be linked to X in such a way that their financial success impacts the penalties imposed on X. However, Tesla is expected to be exempt from this consideration, given it is a publicly traded company and not under Musk’s full control.
The debate centers on whether Musk himself should be treated as the entity responsible for any DSA violations, given his ownership across multiple companies. Bloomberg’s sources suggest that if regulators deem Musk personally responsible, rather than just X, the fine could extend across the entire network of Musk-led businesses.
Precedent in Brazil
This regulatory scrutiny isn’t without precedent. In Brazil, courts have already grouped Musk-led companies together as a single economic entity. Authorities seized approximately $2 million from a Starlink bank account to pay for fines levied against X, demonstrating how other countries are treating Musk’s various ventures as a cohesive financial structure when calculating penalties.
Implications for X
For X, which has seen a steep decline in advertising revenue since Musk’s acquisition, such a decision could be a significant blow. Fines calculated based on Musk’s broader business empire would multiply the financial risk for X, making regulatory compliance even more critical for the social media platform’s future operations in the European Union.
If EU regulators proceed with this approach, it could set a new precedent for how personal ownership and control across multiple businesses are considered when calculating fines for regulatory breaches.
