The European Commission has lost access to its control panel for buying and tracking ads on Elon Musk’s X — after fining the social media platform €120 million for violating EU transparency rules. “Your ad account has been terminated,” X’s head of product, Nikita Bier, wrote on the platform early Sunday. Bier accused the EU executive of trying to amplify its own social media post about the fine on X by trying “to take advantage of an exploit in our Ad Composer — to post a link that deceives users into thinking it’s a video and to artificially increase its reach.” The Commission fined X on Thursday for breaching the EU’s rules under the Digital Services Act (DSA), which aims to limit the spread of illegal content. The breaches included a lack of transparency around X’s advertising library and the company’s decision to change its trademark blue checkmark from a means of verification to a “deceptive” paid feature. “The irony of your announcement,” Bier said. “X believes everyone should have an equal voice on our platform. However, it seems you believe that the rules should not apply to your account.” Trump administration has criticized the DSA and the Digital Markets Act, which prevent large online platforms, such as Google, Amazon and Meta, from overextending their online empires. The White House has accused the rules of discriminating against U.S. companies, and the fine will likely amplify transatlantic trade tensions. U.S. Secretary of Commerce Howard Lutnick has already threatened to keep 50 percent tariffs on European exports of steel and aluminum unless the EU loosens its digital rules. U.S. Vice President JD Vance blasted Brussels’ action, describing the fine as a response for “not engaging in censorship” — a notion the Commission has dismissed. “The DSA is having not to do with censorship,” said the EU’s tech czar, Henna Virkkunen, told reporters on Thursday. “This decision is about the transparency of X.”

BRUSSELS — European politicians expressed cautious praise as Brussels slapped a €120 million fine on Elon Musk’s X on Friday, despite American fury over the decision.  The reaction from national diplomats and lawmakers illustrated broad support as the EU finally crossed a Rubicon and issued its first fine under the EU’s rule book to rein in social media platforms, more than two years after it started its enforcement effort.  The divide between the reaction from European capitals and U.S. Vice President JD Vance — who slammed the move before it was announced — sets up a clash that is set to persist as Brussels turns its attention to more enforcement decisions under the Digital Services Act (DSA), and will likely spill into ongoing transatlantic trade talks. Friday’s decision “sends an important signal that the Commission is determined to enforce the DSA,” said Karsten Wildberger, Germany’s digital minister, during a meeting of EU ministers in Brussels. Polish Digital Minister Dariusz Standerski applauded it as a sign of “strong leadership.” After French President Emmanuel Macron last week expressed outspoken criticism of the EU for slow-walking the conclusions, his digital minister, Anne Le Hénanff, said Friday: “France fully supports this decision … which sends a clear message to all platforms.” She later described it as a “magnificent announcement.” Washington meanwhile was quick out of the gate to slam the move from Brussels, with Vance chiming in half a day before the fine was announced to describe it as a penalty “for not engaging in censorship.” He repeated the U.S. mantra of the past year that the EU’s DSA amounts to censorship and restricted speech. “Once again, Europe is fining a successful U.S. tech company for being a successful U.S. tech company,” said Brendan Carr, the chair of the U.S. Federal Communications Commission, in reaction to the decision. “Europe is taxing Americans to subsidize a continent held back by Europe’s own suffocating regulations.” “The only substantial meaningful fines that have been imposed so far have been against American companies,” Andrew Puzder, the U.S. ambassador to the EU, told Bloomberg Television. “So at some point, if you’re an American company, you’ve gotta sit back and say, look, am I being targeted here?” Asked for a response, the White House directed POLITICO to Vance’s earlier post. Much of the praise in Europe focused on the assessment that the EU didn’t bow to U.S. pressure, neither on the actual fine nor the enforcement steps — even if the move was seen as long overdue. “The Commission held the line,” said Felix Kartte, currently a special adviser to the European Commission.   “It’s important that the EU does not cave to pressure,” said Marietje Schaake, a former MEP and former Commission adviser.  “I am very pleased to see that the Commission is taking serious steps against the intolerable practices we encounter from some of the major tech platforms. Let’s have more of that!” said Danish digital minister Caroline Stage Olsen.  Several European Parliament lawmakers joined the praise but warned this is only the beginning, noting this is the first of several outstanding probes under the DSA, including others against X. Friday’s decision only concerned X’s transparency obligations; X still faces open probes over the spread of illegal content and information manipulation.  In total, 10 investigations into large platforms including Amazon, YouTube, Facebook and Instagram are still up in the air. “This is an important start, but not a breakthrough,” said German Greens lawmaker Alexandra Geese. “As long as the Commission fails to rule on the algorithms, the central level of manipulation remains untouched.”   French liberal lawmaker Sandro Gozi urged that “this long overdue decision must mark a step change,” while Danish Social Democrat Christel Schaldemose said she wanted “far greater transparency” on how the Commission enforces the DSA.  Speaking to reporters Friday, Commission digital chief Henna Virkkunen stressed repeatedly that this is only part of the investigation into X. Acknowledging the criticisms that the EU has been slow to reach this point, she promised that the next decisions would come quicker.   Other observers criticized the size of the X penalty. A fine of €120 million is seen as relatively modest compared to the €2.95 billion fine that Google got for antitrust issues under the bloc’s sister digital law, the Digital Markets Act.   “120m is no deterrent to X,” said Cori Crider, executive director at the Future of Technology Institute. “Musk will moan in public — in private, he will be doing cartwheels.”   “Yes, the fine may seem small,” acknowledged Kartte. The DSA law says fines will take into account “the nature, gravity, duration and recurrence of the infringement” and cannot exceed 6 percent of a company’s annual global turnover.  Commission officials refused to give a clear answer on how they came to the €120 million figure when pressed. A senior official repeatedly said the fine is “proportionate” to the infringement. But how it was calculated can’t be “drilled down to a simple economic formula,” they said. The official said the Commission has found three entities behind X; X Holdings Companies, xAI and Elon Musk “at the top.”   The fine is “for a breach committed by X” but “addressed to the entire corporate structure,” Commission spokesperson Thomas Regnier told reporters.   Based on estimates of company values, that means the upper threshold could have reached as high as €5.9 billion.

BRUSSELS — You can even put an exact date on the day when Brussels finally gave up on its decade-long dream of seeking to be the predominant global tech regulator that would rein in American tech titans like Google and Apple.  It came last Wednesday — Nov. 19 — when the European Commission made an outright retreat on its data and privacy rules and hit pause on its AI regulation, all part of an attempt to make European industries more competitive in the global showdown with the United States and China.   It sounded the death knell for what has long been described as the “Brussels Effect” — the idea that the EU would be a trailblazer on tech legislation and set the world’s standards for privacy and AI.  Critics say Washington is now setting the deregulatory trajectory, while U.S. President Donald Trump is battering down Europe’s ambitions by threatening to roll out tariffs against countries that he accuses of attacking “our incredible American Tech Companies.” “I don’t hear anybody in Brussels saying ‘We’re a super regulator’ anymore,” said Marietje Schaake, who shaped Europe’s tech rulebooks as a former European Parliament member and special adviser to the European Commission. The big pivot away from rule-setting came in a “digital omnibus” proposal on Wednesday — a core part of Commission President Ursula von der Leyen’s “simplification” program to cut red tape to make Europe more competitive. The digital omnibus was one of the “main discussion points” at a meeting between the EU’s tech chief Henna Virkkunen and U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer. | Nicolas Tucat/AFP via Getty Images “Whether you call it ‘simplification’ or ‘deregulation,’ you are certainly moving away from the high watermark era of regulation,” said Anu Bradford, a professor at Columbia University who coined the term “Brussels Effect” in 2012. The deregulation drive followed a year in which the Trump administration pressured the EU to roll back enforcement of its tech rulebooks, which Big Tech giants and Trump himself deem “taxes” targeted at U.S. companies. The digital omnibus was one of the “main discussion points” at a meeting between the EU’s tech chief Henna Virkkunen, U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer on Monday. “We adopted a major package that would have an impact not only on EU companies, but also on U.S. companies, so this is the appropriate moment … to explain what we’re doing on our side,” European Commission spokesperson Thomas Regnier told reporters on Monday when asked why Virkkunen had discussed the topic with her U.S. counterparts. Lutnick, however, told Bloomberg that Washington was seeking more than just an explanation of EU laws — it wanted changes to its tech rulebooks as well. U.S. giants like Google and Meta have led a full-frontal lobbying push to replace heavy-handed EU enforcement with lighter-touch rules. Behind the push to break the shackles for tech firms is a fear of missing out on the promised economic boom linked to AI technologies. The bloc has traded its role as global tech cop for a ticket to the AI race.  GLOBAL FIRST Brussels showed its ambition to lead the world in regulating the online space throughout the 2010s. In 2016 it adopted the General Data Protection Regulation. Since then, the law has been copied in new legislation across more than 100 countries, said Joe Jones, director of research and insights at the International Association of Privacy Professionals.  When the GDPR came into force, international companies like Microsoft, Google and Facebook acknowledged it spurred them to apply EU privacy standards globally.  It served as a quintessential case of the Brussels Effect: When setting the bar in Brussels, multinational firms would roll out standards across their businesses far beyond the EU’s borders. Other governments, too, copied some of Brussels’ early attempts at setting the rules. After the GDPR, the EU adopted other laws that had the ambition of reining in Big Tech, either by pressing platforms to police for illegal content through its Digital Services Act or by blocking them from using their dominance to favor own services through the Digital Markets Act. Right after the EU adopted its risk-focused AI rulebook, Trump took office and scrapped AI safety rules embraced by his predecessor Joe Biden.  | Chip Somodevilla/Getty Images The EU’s latest blockbuster tech rulebook, the Artificial Intelligence Act, was Brussels’ latest attempt at pioneering legislation, as it sought to address the risks posed by the fledgling technology. “There was more confidence in the EU’s regulation, partially because the EU seemed confident. Right now, when the EU seems to be retreating, any government around is also asking the same question,” Bradford said. Right after the EU adopted its risk-focused AI rulebook, Trump took office and scrapped AI safety rules embraced by his predecessor Joe Biden.   The changing of the guard in Washington came right as Brussels was waking up to the need to be competitive in a global technology race. Former Italian Prime Minister Mario Draghi presented the EU’s competitiveness report in 2024, just weeks before Trump won a second term. “I think the Brussels effect is still alive and well. It just has a bit of the Draghi effect, in that it has a bit of this geopolitical innovation, pro-growth effect in it,” said IAPP’s Jones.  According to German politician Jan Philipp Albrecht, a former European Parliament member who was a chief architect of the GDPR, Europe has become blind to the benefits of its regulatory regime that set the gold standard. “Europeans have no self-secureness anymore … They don’t see the strength in their own market and in their own regulatory and innovative power,” Albrecht said.  WASHINGTON EFFECT Other critics of deregulation are taking a step further, claiming that Washington has hijacked the Brussels Effect — but just on its own terms.   “In an odd way, maybe the Trump administration has taken inspiration from the Brussels Effect, in the sense [that] they see what it means for this one regulating entity to be the one that sets global standards,” said Brian J. Chen, policy director at nonprofit research group Data & Society. It’s just, “they want to be the ones setting those standards,” Chen said. The Trump administration pressured Brussels to tone down its tech regulation during heated trade talks this summer, POLITICO previously reported. That the EU followed through with scaling back its tech laws just as the U.S. is pressing the EU is bad optics, said Schaake, the former lawmaker. “The timing of the whole simplification [package] is very bad,” she said.  She argued that it’s essential to deal with the unnecessary burden on companies, but issuing the digital omnibus after the U.S. pressure “looks like a response to that criticism.” Commission spokesperson Thomas Regnier dismissed the idea that the EU was acting on U.S. pressure. “On the digital omnibus, absolutely no third country had an influence on our sovereign simplification agenda. Because this omnibus is about Europe: less administrative burden, less overlaps, less costs,” Regnier said in a comment on Friday. “We have always been clear: Europe has its sovereign right to legislate,” Regnier added. “Nothing in the omnibus is watering down our digital legislation and we will keep enforcing it, firmly but always fairly.” This article has been updated to include new developments.

LONDON — The provider of online message board 4chan has been fined £20,000 by the U.K.’s communications regulator Ofcom for failing to respond to requests for information about its compliance with the Online Safety Act. Preston Bryne, a lawyer representing 4Chan, said in August that Ofcom had provisionally decided to fine 4Chan for £20,000. Ofcom’s statement today confirms that is the case. Ofcom will also impose a daily penalty of £100, starting from Tuesday, for either 60 days or until 4chan provides it with the relevant information, whichever is sooner. Suzanne Cater, Director of Enforcement at Ofcom, said: “Today sends a clear message that any service which flagrantly fails to engage with Ofcom and their duties under the Online Safety Act can expect to face robust enforcement action. “We’re also seeing some services take steps to introduce improved safety measures as a direct result of our enforcement action. Services who choose to restrict access rather than protect U.K. users remain on our watchlist as we continue to monitor their availability to U.K. users.” Technology Secretary Liz Kendall praised Ofcom’s decision, saying in a statement: “The Online Safety Act is not just law, it’s a lifeline. Today we’ve seen it in action, holding platforms to account so we can protect people across the U.K.” “This fine serves a clear warning to those who fail to remove illegal content or protect children from harmful material. We fully back the regulator in taking action against all platforms that do not protect users from the darkest corners of the internet,” she added.

Ireland’s media regulator is turning up the heat on Elon Musk’s social media site X for not properly checking the age of users who can access porn. The country’s new Online Safety Code includes provisions on age assurance to keep minors away from harmful content, including pornographic and violent content. The code applies to video-sharing platforms X, Facebook and TikTok. These age-check provisions came into effect on July 21. “Based on an initial review of the X platform, we cannot see evidence of measures taken to comply with this age assurance requirement,” a spokesperson for Ireland’s media regulator Coimisiún na Meán told POLITICO in a statement. The regulator has “further concerns” of non-compliance, “including but not limited to” the “availability of parental controls.” The regulator asked X to provide information by July 25 and “will take further action where there is evidence of non-compliance with the Code,” the spokesperson said. The Coimisiún na Meán in June put pressure on X to comply with the code, sending the platform a statutory information request to describe its compliance measures. X has a deadline to respond by Aug. 8, which was extended from July 22. The platform risks being charged with a crime and fined up to €500,000 should it fail to respond by the deadline. Musk’s platform is also challenging the code before Ireland’s High Court, including certain provisions contained within it and its application to X. A decision on that challenge is expected on Friday, July 25. Ireland’s new media law is a national implementation of the European Audiovisual Media Services Directive (AVMSD). Companies with their EU headquarters in Ireland have to follow Irish rules. X did not reply to a request for comment in time for publication. An X spokesperson said earlier that the company is “fully committed to complying with all applicable laws and regulations,” including Ireland’s code, and is “prioritizing its implementation.” The French government is considering classifying X, Bluesky and Reddit as porn platforms, which would mean they have to follow stricter age verification requirements.

Preliminary findings from a probe into World Economic Forum founder Klaus Schwab reveal that he allegedly manipulated the landmark Global Competitiveness Report to serve political interests and sent lewd emails to younger employees, Swiss newspaper SonntagsZeitung reported on Sunday. The probe also showed that his wife allegedly billed trips to the WEF despite holding no official position with the organization, according to the report. These findings appear to corroborate allegations contained in a whistleblower letter, which accused Schwab of financial misconduct — including misuse of WEF funds and inappropriate treatment of employees. The accusations reportedly prompted Schwab to step down from his role as chairman at the WEF — a non-profit best known for its annual gathering of global elites in Davos, Switzerland — after more than half a century at its helm. In April, the WEF confirmed the existence of the whistleblower letter — first reported by the Wall Street Journal — and said it had launched an internal investigation, while stressing that the misconduct allegations “remain unproven.” Schwab has denied the accusations and filed a criminal complaint against the whistleblowers. The WEF did not immediately respond to POLITICO’s request for comment. SonntagsZeitung reported that the probe’s preliminary findings indicate that Schwab’s alleged wrongdoing could include meddling with the Global Competitiveness Report — a now-defunct yearly publication that assessed and ranked countries based on economic competitiveness. The competitiveness report was discontinued during the Covid-19 pandemic. Official documents cited by SonntagsZeitung allege that Schwab intervened multiple times to alter or suppress unfavorable rankings for certain countries, particularly in the Middle East and North Africa region and in India, allegedly to preserve diplomatic relations or avoid political fallout. In one instance, Schwab reportedly recommended shelving a negative report after discussing it with a government official, according to the newspaper. The investigation also reportedly concerns up to 900,000 Swiss francs in expenses filed by Schwab and his wife, Hilde.

BRUSSELS — The European Commission has requested a meeting with X to discuss its artificial intelligence chatbot, Grok. Last week, European countries and lawmakers called on the Commission to amp up scrutiny on the social media platform, after the AI chatbot spewed out antisemitic remarks. Those included glorifying Nazi leader Adolf Hitler as the best-placed person to deal with alleged “anti-white hate.” Poland’s Minister of Digital Affairs, Krzysztof Gawkowski, said the government would consider banning the app, later asking the Commission to take action in a letter. X said it removed the posts and that the problem was not related to the chatbot’s underlying large language model. Still, the Commission has called in the company for a “technical meeting” on Grok, spokesperson Thomas Regnier said. X is designated as a very large online platform under the EU’s Digital Services Act, meaning it has to follow strict transparency requirements. The Commission has not responded to POLITICO’s inquiry as to whether the platform submitted a risk assessment for the integration of Grok into X. Meta submitted such a document for the integration of AI features on its platform, Regnier previously told POLITICO. X is also under investigation for breaches of the DSA on several fronts, including the dissemination of illegal content.

BRUSSELS — The Polish government is urging the EU to immediately open an investigation into Elon Musk’s Grok, according to a letter dated July 9 and seen by POLITICO. Grok’s “offensive remarks” and “erratic and full of expletive-laden rants” on social media X could be a “major infringement” of the bloc’s content moderation rulebook, the Digital Services Act, Poland’s Deputy Prime Minister Krzysztof Gawkowski wrote in the letter addressed to EU tech chief Henna Virkkunen. The artificial intelligence chatbot came under fire this week for generating offensive responses that included glorifying Nazi leader Adolf Hitler as the best-placed person to deal with alleged “anti-white hate,” and “hoping” that wildfires in the south of France will clean up low-income neighbourhoods in Marseille from drug trafficking. In a series of posts made after X updated its AI model, Grok also referred to Polish Prime Minister Donald Tusk in highly offensive language, as well as calling him “a traitor.” “There is reason enough to think, that negative effects for the exercise of fundamental rights, were not made by accident, but by design,” Gawkowski wrote, citing obligations for the biggest platforms such as X to address so-called systemic risks on their sites under the DSA. X is already under investigation by EU regulators for violating the social media law due to a potential lack of safeguards against illegal content, and was found to be in preliminary breach of other parts of the law including advertising transparency and data access for researchers. The owner of X and Grok maker xAI said on Wednesday it had removed “inappropriate posts” and stated it had taken action to “ban hate speech before Grok posts on X,” without clarifying what this entails.

BRUSSELS — A series of Hitler-praising comments by Elon Musk’s artificial intelligence chatbot Grok has fired up European policymakers to demand stronger action against Big Tech companies as the bloc takes another step to enforce its laws. Musk’s chatbot this week sparked criticism for making antisemitic posts that included glorifying Nazi leader Adolf Hitler as the best-placed person to deal with alleged “anti-white hate,” after X updated its AI model over the weekend. The latest foul-mouthed responses from the chatbot saw EU policymakers seize the opportunity to demand robust rules for the most complex and advanced AI models — such as the one that underpins Grok — in new industry guidance expected Thursday. It’s also put a spotlight on the EU’s handling of X, which is under investigation for violating the bloc’s social media laws. The Grok incident “highlights the very real risks the [EU’s] AI Act was designed to address,” said Italian Social-Democrat European Parliament lawmaker Brando Benifei, who led work on the EU’s AI rulebook that entered into law last year.  “This case only reinforces the need for EU regulation of AI chat models,” said Danish Social-Democrat lawmaker Christel Schaldemose, who led work on the EU’s Digital Services Act, designed to tackle dangerous online content such as hate speech. Grok owner xAI quickly removed the “inappropriate posts” and stated Wednesday it had taken action to “ban hate speech before Grok posts on X,” without clarifying what this entails. The EU guidance is a voluntary compliance tool for companies that develop general-purpose AI models, such as OpenAI’s GPT, Google’s Gemini or X’s Grok. The European Commission last week gave a closed-door presentation seen by POLITICO that suggested it would remove demands from earlier drafts, including one requiring companies to share information on how they address systemic risks stemming from their models. Lawmakers and civil society groups say they fear the guidance will be weak to ensure that frontrunning AI companies sign up to the voluntary rules. AMMUNITION After ChatGPT landed in November 2022, lawmakers and EU countries added a part to the EU’s newly agreed AI law aimed at reining in general-purpose AI models, which can perform several tasks upon request. OpenAI’s GPT is an example, as is xAI’s Grok. That part of the law will take effect in three weeks’ time, on August 2. It outlines a series of obligations for companies such as xAI, including how to disclose the data used to train their models, how they comply with copyright law and how they address various “systemic” risks. The Grok incident “highlights the very real risks the [EU’s] AI Act was designed to address,” said Italian Social-Democrat European Parliament lawmaker Brando Benifei, who led work on the EU’s AI rulebook that entered into law last year. | Wael Hamzeh/EPA But much depends on the voluntary compliance guidance that the Commission has been developing for the past nine months. On Wednesday, a group of five top lawmakers shared their “great concern” over “the last-minute removal of key areas of the code of practice, such as public transparency and the weakening of risk assessment and mitigation provisions.” Those lawmakers see the Grok comments as further proof of the importance of strong guidance, which has been heavily lobbied against by industry and the U.S. administration. “The Commission has to stand strongly against these practices under the AI Act,” said Dutch Greens European Parliament lawmaker Kim van Sparrentak. But “they seem to be letting Trump and his tech bro oligarchy lobby the AI rules to shreds through the code of practice.”   One area of contention in the industry guidance relates directly to the Grok fiasco. In the latest drafts, the risk stemming from illegal content has been downgraded to one that AI companies could potentially consider addressing, rather than one they must. That’s prompted fierce pushback. The industry code should offer “clear guidance to ensure models are deployed responsibly and do not undermine democratic values or fundamental values,” said Benifei. The Commission’s tech chief Henna Virkkunen described work on the code of practice as “well on track” in an interview with POLITICO last week. RISKS The Commission also pointed to its ongoing enforcement work under the Digital Services Act, its landmark platform regulation, when asked about Grok’s antisemitic outburst.  While there are no EU rules on what illegal content is, many countries criminalize hate speech and particularly antisemitic comments.  Large-language models integrated into very large online platforms, which include X, “may have to be considered in the risk assessments” that platforms must complete and “fall within the DSA’s audit requirements,” Commission spokesperson Thomas Regnier told POLITICO. The problem is that the EU is yet to conclude any action against X through its wide-reaching law. The Commission launched a multi-company inquiry into generative AI on social media platforms in January, focused on hallucinations, voter manipulation and deepfakes.  In X’s latest risk assessment report, where the platform outlines potential threats to civic discourse and mitigation measures, X did not outline any risks related to AI and hate speech. Neither X nor the Commission responded to POLITICO’s questions on whether a new risk assessment for Grok has been filed after it was made available to all X users in December.  French liberal MEP Sandro Gozi said she would ask the Commission whether the AI Act and the DSA are enough to “prevent such practices” or whether new rules are needed.