The European Union’s governing body announced on Friday its readiness to uphold a 120 million euro ($137 million US) penalty against the social media giant X, despite backing from the U.S. administration for Elon Musk’s legal challenge to dismiss the case. X was fined by the European Commission last year for violating the EU’s digital regulations, marking the first such penalty under the bloc’s online content rules. The EU regulators found X’s use of blue checkmarks to be in violation due to deceiving design practices that could expose users to fraud and manipulation.
In response, the U.S. Justice Department filed an application on Thursday supporting X’s efforts to nullify the case at the European Union’s General Court. Assistant Attorney General of the Justice Department’s Civil Division, Brett Shumate, emphasized that they will not tolerate what they perceive as the European Commission overstepping its regulatory boundaries to control American innovation and economic activities.
European Commission spokesperson Thomas Regnier defended the EU’s right to enact legislation aimed at safeguarding its citizens, stating that the enforcement of their laws is based on transparency and substantial evidence, ready for court scrutiny. The Commission enforces the Digital Services Act (DSA), a set of stringent regulations obligating tech firms to enhance online safety or face substantial fines.
The DSA aims to protect internet users by facilitating the reporting of counterfeit goods, unsafe products, and harmful content, including hate speech, while prohibiting targeted ads toward children. However, the DSA has sparked tensions with the Trump administration, which has criticized the rules as promoting online censorship.
The Justice Department warned that upholding the fine against X could have significant implications for U.S. digital companies operating in the EU. Shumate argued that the European Commission’s attempt to extend its regulatory reach to American firms is improper and beyond its jurisdictional limits.
Former U.S. federal prosecutor Ankush Khardori criticized the Justice Department’s stance, highlighting that a company’s operations and legal obligations are not solely tied to its physical presence but also extend to jurisdictional laws. Khardori also pointed out the irony of the Justice Department urging the EU to adhere to international law standards while facing accusations of violating such norms themselves.
Musk, the CEO of X, was recently present at a state dinner hosted by Trump in honor of China’s leader, Xi Jinping. This intervention by the Justice Department marks the second time in a few months that they have stepped in to defend a company associated with Musk.
Looking ahead, Musk’s political contributions through his super PAC to Republican candidates are in the spotlight as the midterms draw closer, amid potential scrutiny of his government role and actions.