Brussels is preparing to levy a major financial penalty against Elon Musk’s social media platform, X, for violating European regulations aimed at curbing illicit content and disinformation. 

According to a report from The New York Times, European Union regulators are considering a fine exceeding $1 billion under the Digital Services Act (DSA), marking a significant escalation in the bloc’s enforcement of online content policies.

The potential penalty follows a lengthy investigation into X’s content moderation practices, with officials alleging that the platform has failed to adequately address the spread of harmful material, including hate speech and disinformation. 

In addition to the fine, regulators are expected to demand changes to X’s platform to ensure compliance with the DSA, a law designed to hold tech companies accountable for the content they host.

The investigation into X began in 2023, culminating in a preliminary ruling last year that the company had violated key provisions of the DSA. European authorities have also accused X of failing to provide sufficient data transparency to researchers and inadequately verifying paid user accounts, increasing the risk of platform misuse and foreign interference.

This enforcement action could strain transatlantic relations, particularly given X’s close ties to US President Donald Trump, a staunch ally of Musk. The move also comes at a time of heightened trade tensions between the EU and the United States, with recent disputes over tariffs and economic policies adding to diplomatic friction.

X, which Musk took private in 2022, has already pushed back against regulatory scrutiny. In response to reports of the impending fine, the company labeled the potential action as “an unprecedented act of political censorship and an attack on free speech.” Musk himself has vowed to challenge any penalties in court, setting the stage for a high-profile legal battle between X and European authorities.

In addition to this case, X faces a separate, broader EU investigation that could lead to further penalties. Regulators are examining whether the platform’s lenient approach to moderating content has turned it into a breeding ground for illegal activity, posing a threat to democracy within the 27-nation bloc.

The European Union has a history of aggressive regulatory action against U.S. tech giants, having previously fined Google, Meta, Apple, and Amazon for alleged anti-competitive behavior and data privacy violations. While the exact fine against X is yet to be determined, the DSA allows for penalties of up to 6% of a company’s global revenue. 

Given Musk’s vast business empire, which includes Tesla and SpaceX, regulators may consider expanding their assessment to include revenue from these entities, potentially pushing the fine beyond the $1 billion mark.

As the final ruling looms, the case against X is set to become a landmark test of the EU’s regulatory authority over global tech companies.