EU Investigates xAI's Acquisition Structure of X Following Musk's Content Violation Probe

EU Investigates X for Digital Law Violations
Scrutinizing Acquisition Structure by xAI
Potential for Increased Fines

Bloomberg reported on June 19 that the European Union (EU) Commission has launched an investigation into xAI's acquisition of X, led by CEO Elon Musk.

Reuters Yonhap News

CEO Musk previously announced in March that he had sold X, which he acquired in 2022, to xAI for $33 billion.

According to multiple sources, the EU Commission recently sent a new questionnaire to X. This move aims to assess the corporate structural changes resulting from xAI's acquisition of X.

Additionally, sources explained, "The acquisition agreement signed in March valued xAI at $80 billion and effectively placed X under xAI. This structure could also affect the potential amount of fines imposed in the future."

The EU Commission is currently investigating possible violations of online content regulations by X under the Digital Services Act (DSA). The DSA allows for fines if major online platforms fail to take appropriate action against illegal content or disinformation, or if they violate transparency rules.

Bloomberg reported, "Since fines are calculated based on global revenue, the organizational structure and corporate scale of X and xAI could influence the level of future sanctions."

An EU Commission spokesperson stated, "We are closely monitoring changes in the corporate structure of X, as well as those of other major platforms. Such changes could impact the ongoing investigation."

Since December of last year, the EU has been investigating whether X has properly implemented measures to prevent the spread of false or illegal content and to respond to information manipulation, as required under the DSA.

Sources said that EU regulators could announce fines for X's content policy violations before the summer holiday period in August. If X demonstrates a willingness to address the EU's concerns, it may be able to avoid or reduce sanctions. However, there is also a possibility that the announcement could be delayed.