Cryptocurrency Industry Majors Face Billion-Dollar Fines From EU After xAI’s X Acquisition
Elon Musk, the founder of a multi-industry tech empire, is facing billions of dollars in fines after the acquisition of social network X by artificial intelligence startup xAI. The massive $33 billion deal has valued xAI at $80 billion and put X in the crosshairs of European regulators.
xAI Takes Over X: New Ownership Entity in Crypto and Tech Industry
New investigations have been launched into the deal, according to a statement from the European Commission. Experts suspect that the merger could significantly change the penalties under the Digital Services Act (DSA).
Under the DSA, the EU has the power to fine digital companies up to 6% of their annual global turnover if they fail to effectively combat illegal content, misrepresent information or are not transparent in their business operations.
Industry sources said the European Commission is considering revenue from Musk's other projects, such as SpaceX, Neuralink, and The Boring Company, to determine the final fine for X.
Combining fines based on a company’s global revenue raises the stakes for large corporations like Musk’s X. The rules are intended to increase the responsibility of platforms to police content and combat the spread of misinformation.
“We are closely monitoring changes in X’s corporate structure, as we do with other platforms,” Commission spokesman Thomas Regnier said during a briefing on Thursday. He confirmed that he had sent an information request to X to clarify how these changes might affect the investigation.
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No major penalties have been issued by the EU under the DSA yet, but sources say a final decision on X is likely to be made before the Commission's summer break in August. The timing is unclear as details of the final fine or legal basis are still being worked out.
Initiated in 2023 after multiple allegations of violations, the investigation into X focused on the platform's failure to properly control misinformation, lack of transparency in advertising and researcher activities, as well as errors in managing the "blue tick" identity verification system.
The European Commission argued that X's change in policy on blue ticks had deviated from industry standards and created an unclear information environment. X had tried to explain the function of the blue ticks recently to avoid penalties, but it was unclear whether it was enough to satisfy the commission.
Platforms under the DSA’s control can make binding commitments to remedy violations in exchange for leniency from the EU. However, Brussels has been quite strict with formal solutions and demands for substantive improvements.
X has yet to make any official response to the new requests from the European Commission.
Source: https://tintucbitcoin.com/eu-uu-tien-kiem-soat-musk-sau-mua-xai/
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