Following the news that the EU has launched an investigation into Elon Musk’s social media platform, X (formerly Twitter);

Hugo Shapero, Thematic Analyst at GlobalData, a leading data and analytics company, offers his view:

“X risks a fine of 6% of global turnover if it does not conform to the terms of the EU’s Digital Services Act (DSA). The actions taken by the EU are the first of their kind under the DSA and could set a precedent for the regulation of other Very Large Online Platforms (VLOPs). This case will be viewed as a watershed for the strength of the DSA by X’s peers, notably Meta. Should the EU enforce a significant penalty, it would signal its willingness to take on monopolistic Big Tech companies.

“The EU investigation of X will most likely result in a fine but it could also see X’s services banned from the EU. In GlobalData’s recent thematic report, ‘Thematic Intelligence: Tech, Media, & Telecom Predictions 2024’, we predicted that social media giants will receive EU fines for sharing misinformation in 2024. Internet platforms that could potentially impact child safety, such as ByteDance’s TikTok, and platforms that do not have robust protocols against misinformation, like X, would face increased legal pressure, fines, and possibly a Europewide ban as a last resort.

“This investigation has not emerged suddenly; X has had time to prepare and take action to stave off regulation. The investigation is the latest chapter in a story that began with Musk’s decision to cut around 80% of the workforce within a year of completing his acquisition of Twitter in October 2022. These cuts affected areas like EU policy compliance, online trust and safety, and multi-language content moderation.

“Since Musk’s takeover, X has made limited effort to adhere to EU regulation, and this is unlikely to change any time soon. The dissemination of illegal and manipulated information remains the core of the EU’s case against X. The EU has persistently encouraged X to solve issues around disinformation, manipulation, and distribution of illegal content. Failure to respond to these requests may also result in periodic penalties of up to 5% of its average daily worldwide turnover for each day X does not comply with the EU’s laws. The daily fine seems more likely than the EU’s last resort, a 14-day temporary service suspension.”