Bloomberg: E.U. Regulators Considering Whether Penalties Levied Against X Should Include Other Musk Businesses ⇥ bloomberg.com

Gian Volpicelli and Samuel Stolton, Bloomberg:

Under the EU’s Digital Services Act, the bloc can slap online platforms with fines of as much as 6% of their yearly global revenue for failing to tackle illegal content and disinformation or follow transparency rules. Regulators are considering whether sales from SpaceX, Neuralink, xAI and the Boring Company, in addition to revenue generated from the social network, should be included to determine potential fines against X, people familiar with the matter said, asking not to be identified because the information isn’t public.

These are all businesses privately owned by Elon Musk; Tesla, as a publicly traded company, is reportedly not being factored into the calculation. According to a Bloomberg source, the Commission is trying to decide if they should be penalizing the owner of the business and not the business itself.

Matt Levine, in Bloomberg’s Money Stuff newsletter:

See, you’re not really supposed to do that: X is its own company, with its own corporate structure and owners; 6% of X’s revenue is 6% of X’s revenue, not 6% of the revenue of Musk’s other companies. But if everyone thinks of the Musk Mars Conglomerate as a single company, then there’s a risk that it will be treated that way.

I can see how the penalty formula should not be stymied by carefully structured corporations. There should be a way to fine businesses breaking the law, even if their ownership is obfuscated.

But that is not what is happening here. As reported, this seems like an overreach to me. Even though Musk himself disregards barriers between his companies, as Levine also documents, a penalty for the allegedly illegal behaviour of X should probably be levied only against X.