As hope of US trade deal glimmers, EU stalls investigation into breaches by Elon Musk's X

The European Commission has delayed concluding a key investigation into Elon Musk’s social media platform X over alleged violations of the bloc’s digital transparency rules, as it navigates sensitive trade negotiations with the United States.

The probe under the EU’s Digital Services Act (DSA) was expected to wrap up before the summer recess, but three officials familiar with the matter said that would no longer happen.

“It’s all tied up,” Financial Times cited one of the officials as saying, referring to the timing of the decision and ongoing EU-US trade discussions.

The DSA requires large online platforms to crack down on illegal content and increase transparency. Brussels launched multiple investigations into X for allegedly breaching the law, including deceptive design and failure to provide sufficient data access. If found guilty, the platform could face fines of up to 6 per cent of its annual global revenue, though penalties are expected to fall below that maximum.

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The commission, which leads EU trade policy, has been in talks with Washington since April after US President Donald Trump imposed reciprocal tariffs on EU goods. Initially set at 20 per cent, the tariffs were reduced to 10 per cent to allow for negotiations, but Trump has since threatened to raise them to 30 per cent from 1 August.

Amid the talks, Brussels officials say politically charged decisions involving US firms are being handled cautiously. The Trump administration has accused the EU of targeting American tech companies and infringing on freedom of speech. “What happened was inexcusable and the consequences imposed for the failures so far do not reflect the severity of the situation,” Trump said, comparing the EU’s regulatory actions to “overseas extortion”.

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While Trump and Musk have fallen out this year after previously developing a political alliance ahead of the 2024 election, the US president has remained critical of EU enforcement measures against American tech giants.

Despite that pressure, European Commission President Ursula von der Leyen has insisted the bloc will not change its digital rule book. In April, the EU fined Apple and Meta €700 million combined for breaching antitrust regulations under the Digital Markets Act.

Unlike the Digital Markets Act, the DSA has no fixed deadlines for completing investigations, giving the commission flexibility in announcing findings. Ongoing DSA investigations also include probes into Meta and TikTok over their content moderation policies.

The commission stated that the “proceedings against X under the DSA are ongoing”, and added that the enforcement of “our legislation is independent of the current ongoing negotiations”.

It said it “remains fully committed to the effective enforcement of digital legislation, including the Digital Services Act and the Digital Markets Act”.

Anna Cavazzini, a European Parliament lawmaker with the Greens, called on the commission to act swiftly. “The commission must continue making changes to EU regulations an absolute red line in tariff negotiations with the US,” she said.

Brussels is also examining X’s content moderation practices, particularly after Musk hosted Alice Weidel of Germany’s far-right Alternative for Germany party on the platform ahead of national elections. Additionally, there is growing pressure to investigate Musk’s Grok chatbot after it reportedly generated antisemitic content.

X has defended its record, stating that it disagreed “with the commission’s assessment of the comprehensive work we have done to comply with the Digital Services Act and the commission’s interpretation of the Act’s scope”.