Musk’s X Deemed Too Small for EU Crackdown on Big Tech’s Power
(Bloomberg) -- Elon Musk’s social media platform X is set to avoid being hit by a landmark European Union law aimed at reining in tech giants after watchdogs decided the platform’s impact on EU markets is too small.
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The EU’s executive arm is nearing the end of a probe into the platform previously known as Twitter, and is poised to conclude that it does not fall under its Digital Markets Act, according to people familiar with the matter.
X will dodge the DMA’s raft of dos and don’ts because it isn’t a powerful enough service for business users and doesn’t meet certain revenue thresholds, according to the people, who spoke under condition of anonymity. They added that the European Commission is likely to publish its findings in October.
The DMA lays out a series of dos and don’ts for the likes of Alphabet Inc.’s Google Search, Apple Inc.’s Safari, Amazon.com Inc. and Meta Platforms Inc.’s Facebook among others. It’s intended to head off competition violations by tech firms before they take root and fines for violations can be up to 10% of global revenue, or as much as 20% in the case of repeated breaches.
The law targets firms with annual sales across the 27-nation EU of at least €7.5 billion ($8.3 billion) or a market capitalization of €75 billion and above. Platform services are also required to have more than 45 million monthly active end-users and more than 10,000 yearly active business users in the EU.
The commission in Brussels declined to comment.
While sidestepping the EU’s crackdown on competition, X still faces intense scrutiny in Brussels and elsewhere for its alleged failure to combat dangerous content, ever since tech billionaire Musk’s takeover in April 2022.
In July, EU regulators warned X that it had been deceiving users into engaging with potentially harmful content under another powerful EU law — the Digital Services Act — which could eventually pave the way for fines of up to 6% of X’s revenue, if the company fails to appease regulators.
“X is still designated as a VLOP,” X said in an email referring to its designation under the Digital Services Act.
The crackdown on content has sparked increasingly vocal responses from Musk, who’s used his own platform to voice support for former US President Donald Trump and waged a battle against “woke” ideas.
Musk labeled the Australian government as “fascists” over proposed new laws to crack down on digital misinformation, particularly on social media websites.
Last month, Musk sparred with EU internal market chief Thierry Breton after the Frenchman warned him in a letter to comply with the DSA.
Musk has also feuded with controversial Brazilian Supreme Court Justice Alexandre de Moraes over the an order banning X in the country, due to concerns over disinformation.
(Updates with statement from X in the eighth paragraph)
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