Elon Musk’s $33 billion xAI acquisition of X has drawn fresh scrutiny from the European Union, as regulators evaluate potential fines under the Digital Services Act, Bloomberg News reported on Thursday.
The European Commission recently circulated fresh questions to X, probing the social media platform’s corporate structure following its acquisition by xAI, the report said citing people familiar with the matter.
Musk said in March the combination valued “xAI at $80 billion and X at $33 billion.”
Before its summer recess in August, the regulator could announce a fine on X for alleged infractions under the DSA, though delays are possible, according to the report.
Representatives for the European Commission, xAI and X did not immediately respond to Reuters requests for comment.
Any firm found in breach of the DSA faces a fine worth up to 6% of its global turnover, and repeat offenders may be banned from operating in Europe altogether.
Earlier this month, X highlighted a disclaimer to its blue checkmark in an attempt to head off a possible hefty fine from EU antitrust regulators.
The Commission issued preliminary findings under the DSA in July last year that X violated rules on deceptive design, especially by turning the blue checkmark into a paid verification, assigning false credibility to users.
X had disagreed with the assessment.
The EU had announced a probe into X’s alleged breaches of the DSA in December 2023.
