The Digital Services Act (DSA) is a new law that came into effect in August 2023 in the European Union. It aims to regulate large online platforms like X, the social media service formerly known as Twitter, and ensure that they have effective and transparent systems in place for the moderation and removal of false, misleading, and harmful information. The DSA also bans or limits certain user-targeting practices, and requires platforms to share some internal data with regulators and associated researchers.
Why is Elon Musk unhappy with the DSA?
Elon Musk, the billionaire owner of X, is not pleased with having to comply with the DSA. According to a person familiar with the company, Musk has discussed removing the app’s availability in the region, or blocking users in the European Union from accessing it. This would be similar to the way Meta, formerly Facebook, is currently blocking people in Europe from using its new app Threads.
Musk is frustrated with the increased scrutiny and potential fines that X faces in Europe over its handling of harmful and toxic content. The EU Commissioner Thierry Breton said last week that the Commission is officially “investigating X’s compliance” with the new law and formally requested detailed information from the platform on its actions to mitigate and remove harmful or toxic information. The Commission can impose “periodic penalty payments,” or fines, up to 6% of a company’s global revenue if it finds a violation of the DSA.
How has Musk changed X since acquiring it?
Musk acquired X, then Twitter, a year ago for $44 billion. Since then, he has made drastic changes to the platform, such as:
- Firing most of X’s trust and safety team, which was once hundreds of people tasked with moderating and overseeing contention on the platform.
- Closing nearly all of the company’s roughly two dozen global offices, including most in Europe and India, as well as those in Australia, Africa, and South Korea.
- Suggesting that X should operate only in the countries where it is most popular, such as the US, the UK, and Japan.
- Introducing new features such as NFTs, tipping, and live audio rooms.
What are the implications of X leaving Europe?
If X decides to leave Europe or block its users from accessing the app, it would have significant implications for both the platform and its users. Some of the possible consequences are:
- X would lose a large and lucrative market, as Europe accounts for about 20% of its global revenue and 25% of its daily active users.
- X would face backlash from its users, advertisers, investors, and regulators in other regions who may question its commitment to free speech and democracy.
- X would cede ground to its competitors, such as Meta, TikTok, Telegram, and Signal, who may offer more attractive alternatives for European users.
- X would miss out on the opportunities and challenges that come with operating in a diverse and dynamic region that is at the forefront of digital innovation and regulation.