David Vance SubstackRead More
I read with interest that the European Union is reportedly considering imposing a fine on X, the social media platform owned by Elon Musk, that could easily exceed £1 billion!!
This threat stems from X’s alleged violations of the EU’s Digital Services Act (DSA), a comprehensive regulation enacted in 2022 to govern online platforms and ensure they address that which the EU decides is “illegal content, disinformation, and transparency requirements” All vague requirements but all financially deadly.
The DSA allows Ursula Von Der Leyen’s European Commission, the EU’s executive body, to fine platforms up to 6% of their global annual revenue for non-compliance.
In X’s case, the investigation, which began in December 2023, focused on several key issues:
1. **Misleading Verification Practices**: The EU has criticized X’s “blue checkmark” system, introduced under Musk’s leadership, which allows users to purchase verified status. The Commission argues this deceives users about account authenticity, as it deviates from industry norms where verification was previously reserved for notable figures after a vetting process.
2. **Lack of Advertising Transparency**: X is accused of failing to provide a searchable and reliable ad repository, a DSA requirement aimed at ensuring users understand the advertisements they encounter. The Commission claims X’s design features and access barriers hinder this transparency.
3. **Restricted Data Access for Researchers**: The EU alleges X limits researchers’ ability to study its public data, either by banning independent scraping in its terms of service or by imposing high fees for API access, violating DSA mandates for data accessibility.
The New York Times indicates that the EU could finalise this fine as early as this summer. The exact amount still remains under discussion, but estimates suggest it could surpass £1 billion, reflecting the alleged severity of the alleged breaches. The EU is still debating whether to calculate the fine based solely on X’s revenue or to include earnings from Musk’s broader business empire (e.g., SpaceX, Neuralink, xAI, and The Boring Company), excluding the publicly traded Tesla. This approach could significantly inflate the penalty, given X’s reported revenue decline.
X has the opportunity to respond to these preliminary findings and propose solutions to avoid penalties. However, if the Commission’s stance holds, the fine would mark a landmark enforcement of the DSA, signaling the EU’s intent to control tech giants. This case also reflects broader tensions between Musk’s free-speech advocacy and the EU’s authoritarian framework.
There is also the question of how the Trump regime would respond to this all out assault by the EU on an American company. Could this escalate the tariff wars? Would Trump and JD Vance sit idly by as their colleague Elon Musk is financially punished by the EU?
****If you enjoy all the content that I put out here every day, can I ask you to consider to becoming a PAID subscriber, it’s only £5 a month, you can cancel if you don’t enjoy it but I know you will. I want to thank the kind people who already do this, without your help this becomes impossible. Thank you in anticipation***
Views: 1
