Elon Musk's most effective strategy in the European Union conflict might be to withdraw

Elon Musk faces a challenging situation with the European Commission, which is probing whether his social media platform X has violated regulations intended to curb illegal content and misinformation, News.az reports citing Reuters.

The billionaire is facing determined adversaries in the relevant Commissioners Thierry Breton and Margrethe Vestager, who have a new legal tool. Musk may eventually conclude that pulling the plug makes sense

The Commission last month issued a preliminary finding, opens new tab that X had breached the Digital Services Act (DSA), a sprawling new piece of legislation, opens new tab that aims to combat harmful online content. Among other things, Brussels took issue with the site’s blue user checkmarks, which it fears bestow a false credibility on some accounts. X said it disagreed with the Commission’s assessment. Another investigation, into the way Musk’s site moderates disinformation and illegal content, is ongoing.

Breton took the unusual step of reminding Musk publicly about the DSA on X, causing consternation in Brussels but also highlighting the Frenchman’s commitment to the case. The ultimate possible penalties include fines equivalent to 6% of revenue.
Much depends on Musk. The DSA gives companies time to improve their systems before the Commission makes a final decision, leaving room to avoid charges. The Commission doesn’t expect a perfect platform that’s permanently free of hate speech or misinformation, according to a person familiar with the case. Rather, it wants to see robust processes for removing illegal posts such as ones promoting terrorism, and an overall design that aims to limit the societal risks from rampant disinformation.

The trouble is that Musk might struggle to get on board with that vision. Compared with the previous management of the company formerly known as Twitter, he has shown a more permissive attitude to controversial posts. A May report, opens new tab by the European Commission said that X had slashed its team of content moderators by 20% since last October and only covered seven of the bloc’s 24 official languages.

X is not a signatory to Europe’s code of practice, opens new tab on disinformation – whereas TikTok, YouTube owner Alphabet (GOOGL.O), opens new tab and Facebook and Instagram owner Meta Platforms (META.O), opens new tab are. A September study, opens new tab commissioned by the backers of the code concluded that disinformation was easiest to discover on X, among the major platforms.

Musk seems unlikely to change much, having responded, opens new tab to Breton’s warning with a meme containing an expletive. Facing the threat of possible penalties, then, continued intransigence would point in only one direction: leaving Europe. Pulling out should be technically possible. Meta’s Threads social-media service, for example, launched initially without availability for European users.

True, ditching the bloc would mean turning away 67 million logged-in users, based on numbers in X’s latest DSA transparency disclosure, opens new tab. But it’s doubtful whether X would be able to make much money off them anyway. The overall company had negative free cash flow last summer, opens new tab, and Europe should in theory be one of its less profitable regions given the cost of complying with the DSA. Faced with the prospect of either heavy penalties or compromising on his beliefs, Musk may simply decide that the region isn’t worth the hassle.

News.Az