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The EU Might Regulate the Muskiverse as One Big Company

Bad news for X: EU lawmakers might start looking at the companies in CEO Elon Musk’s stable as one interconnected web.

Photo of Elon Musk
Photo by UK Government via CC BY 2.0

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Sometimes it pays to be the little guy, Elon.

This week, X (née Twitter) managed to duck the European Union’s new(ish) Digital Markets Act, a sweeping raft of legislation geared toward putting a special regulatory burden on Big Tech. X did so by successfully arguing that it isn’t actually all that big. Now, the bad news for X: EU lawmakers might start looking at the companies in CEO Elon Musk’s stable as one interconnected web, sources told Bloomberg and the Financial Times on Thursday.

The Musk Cinematic Universe

The DMA works by categorizing certain large companies as digital “gatekeepers” and placing them under particularly stringent rules. The list of gatekeepers so far includes all the usual Silicon Valley suspects — Meta, Amazon, Microsoft, Google — plus TikTok’s parent company ByteDance and Booking.com, which has argued fervently against its inclusion in the Big Boys’ club. 

It’s always been a sleight-of-hand that Twitter/X is talked about in the same breath as platforms like Facebook, as its user numbers have always been far smaller. In the end, X’s winning argument hinged on how little ad money it makes in the EU:

  • As reported by Ars Technica, X told the European Commission in filings that its advertising revenue and user numbers in the EU have both declined since 2022, when Musk took the company private.
  • X and Musk also recently lost a bitter enemy at the EU in the form of Commissioner Thierry Breton, who announced a surprise resignation last month. All in all, a good start to fall for the company.

However, there is a fly in the ointment: Sources told Bloomberg that under the new Digital Services Act, which was drafted alongside the DMA, officials are considering calculating fines for X based not on how much revenue the company makes, but how much revenue all of Musk’s private companies make. So that’s SpaceX, Neuralink, The Boring Company, and the newly-hatched xAI (although to be honest, that probably doesn’t pull in too much revenue yet). It would be a highly unusual way to regulate a company — essentially deciding that it’s synonymous with its chief executive. It’s a testament to how Musk has positioned himself at the heart of his companies, which are pretty porous: When he took over at Twitter, employees were lassoed from SpaceX and Tesla to help him mold the company.

Bolt to the Blue: X’s user numbers may take another hit soon. On Thursday, the platform announced some changes to how blocking other users would work; subsequently, rival microblogging platform Bluesky — which was founded by Twitter founder Jack Dorsey — notched so many new signups that it briefly crashed.