European Union regulators are getting ready to impose significant penalties on Elon Musk’s social media platform X for violating groundbreaking laws aimed at combating illegal content and disinformation, according to four sources familiar with the situation. This move is expected to escalate tensions with the US as it targets one of President Trump’s closest advisors.

The penalties are likely to involve fines and require changes to the platform, according to the sources who spoke on the condition of anonymity. These penalties are anticipated to be announced this summer and will be the first enforcement actions under new EU laws designed to hold social media companies accountable, the sources added.

European authorities are considering the size of fines to levy against X while weighing the risk of further strain on relations with Trump amid broader transatlantic conflicts. The fines could exceed $1 billion as regulators aim to use X as an example to deter other companies from breaching the Digital Services Act.

EU officials clarified that the investigation into X is proceeding separately from tariff negotiations following Trump’s recent announcement of new taxes. The investigation began in 2023, and regulators issued a preliminary ruling last year finding X in violation of the law.

The EU and X could potentially reach a settlement if the platform agrees to make the necessary changes to address regulatory concerns, officials noted.

X is also facing a separate EU investigation that could result in additional penalties. EU officials are building a case that X’s lax approach to regulating user-generated content has enabled the spread of illegal hate speech, misinformation, and other harmful material that threatens democracy across the EU.

EU administrative division spokesperson declined to comment specifically on X but emphasized their commitment to enforcing the law fairly without discrimination against any businesses operating in the EU.

X declined to comment on the matter.

Brussels officials hope that Musk will challenge any regulations, as he has criticized European policies as a form of censorship. Musk previously indicated his intention to contest the penalty in court after the EU’s initial findings last year.

The potential conflict could have wide-reaching implications. If Musk refuses to comply with EU directives to make changes to the platform, it could escalate the dispute further.

The investigation into X is closely watched as a major test of the Digital Services Act, which aims to compel companies to better regulate their platforms and provide transparency about their operations. The law has sparked debates on free speech across the Atlantic, with Vice President JD Vance comparing EU regulations to digital censorship earlier this year.

European regulators temporarily slowed the X investigation after Trump’s election to assess potential consequences, sources revealed. However, with escalating trade tensions with the US, authorities have decided to move forward.

Last year, European regulators concluded that X violated the law by withholding data from external researchers, hindering efforts to monitor the spread of disinformation on the platform. Authorities also criticized X for lack of transparency in advertising practices, making the platform susceptible to misuse and foreign interference.

The EU and X have engaged in extensive discussions over the investigation. Following last year’s ruling against X, the company has submitted numerous points of contention that regulators are currently addressing, according to officials.

The exact penalty for X under the Digital Services Act will be determined closer to the final announcement. While the law allows for fines up to 6% of global revenue, regulators typically do not pursue the maximum penalty.

Unlike other tech giants like Google, Meta, Apple, and Amazon, X is solely owned by Musk. EU regulators are exploring laws that would enable them to calculate fines based on Musk’s overall revenue, including revenue from other companies he controls, such as SpaceX. This could potentially result in penalties exceeding $1 billion.

X is not the only major tech company under EU scrutiny. Penalties against Meta and Apple for violating the Digital Markets Act, a law aimed at fostering competition in the tech sector, are expected to be announced soon. Meta is also under investigation for alleged failure to protect minors, a violation of the Digital Services Act.

The EU’s aggressive regulation of American tech giants is evident in ongoing investigations and fines imposed on companies like Amazon, Apple, Google, and Meta over the past decade for various infractions. These actions highlight the EU’s efforts to combat anti-competitive behavior, lax data privacy practices, and inadequate content moderation.

European regulations may have influenced the tariffs announced by Trump earlier this year amid concerns over the EU’s Digital Markets and Digital Services Acts unfairly targeting American businesses.