San Francisco Frontiers - EU could hit X with fine before 2025 ends

X was the target of the EU's first ever investigation under a major new online content law in December 2023 but after saying it breached the rules and risked a fine, a year later nothing has materialised.

Weighing on the EU's mind is the picture in the United States -- starkly different today from 2023 -- with Big Tech cultivating close ties with the current White House.

When Donald Trump returned as president with Musk by his side at the start of the year, Brussels faced the sobering prospect that any fine on X would fan tensions with the combative US leader.

Since then, top US officials have made plain their distaste for the bloc's tech rules. Speaking in Brussels this week, US Commerce Secretary Howard Lutnick urged the EU to loosen digital laws in exchange for lower steel duties.

"Resolve these outstanding cases that are old," Lutnick urged.

Reviving tensions with the United States would be deeply unwelcome after the bloc fended off a potentially devastating trade war from Trump's tariffs in the summer.

EU officials insist US politics has not steered their decision-making -- but rather making the case water-tight because they expect legal challenges.

The EU executive doesn't want the X probe to drag on for much longer and is expected to slap a fine before the end of the year.

But as Brussels scrambles to influence any US plan to end the war in Ukraine, there could also be a calculation to hold off on a penalty that could irk Trump.

- X marks the fine spot -

Brussels refuses to confirm when the probe will wrap up but tech chief Henna Virkkunen said this month she expects "to conclude some of the investigations" in the coming weeks, in response to a question about X.

It's not just the timing the EU must consider.

Brussels could either slap X with a fine on the basis of the platform's turnover or on the revenues of Musk's entire business empire, including Tesla -- which the bloc's rules theoretically allow it to do.

Pressed for comment, EU spokesman Thomas Regnier said only that the commission had until "the stage of a final decision" to define a service provider -- and hence the size of a potential fine under the Digital Services Act.

The law gives the EU power to fine companies as much as six percent of their global annual revenues.

Any fine needs the approval of the European Commission executive team before being imposed.

- EU under pressure -

The EU's probe against X is wide-ranging -- with regulators still investigating how it tackles the spread of illegal content and information manipulation.

Any fine in the short term, however, would be in punishment for alleged violations published back in July 2024 when the European Commission said the platform's new blue checkmarks deceived users, since anyone could pay to have the label.

X in June sought to mollify the EU by adding a disclaimer to the checkmark.

Brussels also said at the time that X failed to be sufficiently transparent about its advertising and give access to public data to researchers in line with the DSA's rules.

Since July 2024, Brussels has come under pressure to act against X to enforce the bloc's digital rules -- regardless of the potential consequences for US ties.

In January this year, the EU demanded X hand over more details about its algorithms and any recent changes as part of the wide-ranging probe.

V.Mitchell--SFF