European Union regulators are preparing to hit Elon Musk’s X platform with a huge fine which could surpass $1billion for breaking disinformation laws, insiders have reportedly revealed.

The move would likely to ratchet up tensions between the EU and United States, with tech billionaire Musk a close adviser to President Trump.

The social media platform could also face forced product changes for failing to abide by the landmark law to combat illicit content and disinformation, sources told the New York Times. 

The penalties are expected to be announced this summer, the sources said, and will be the first to be issued under the new EU law which aims to force social media companies to police their services.

The investigation into X was opened in 2023 and officials issued a preliminary ruling last year stating that the platform had violated the Digital Services Act.

The fine could be significant in an effort to deter other tech companies from violating the law.

Musk is expected to fight any attempt to regulate his platform, declaring last July that he looked forward to contesting any penalty in ‘a very public battle in court.’

EU officials have reportedly been debating how harsh a penalty to impose as they fear further antagonising President Trump amid rising trans-Atlantic tensions over trade following his sweeping tariffs announcement this week.

The move would likely to ratchet up tensions between the EU and United States, with tech billionaire Musk a close adviser to President Trump

EU regulators have insisted that their investigation is progressing independently from trade negotiations after a 20 per cent tariff was imposed on EU goods to the US.

Shortly after Trump’s inauguration in February, the White House published a memo warning that the EU’s DSA and Digital Markets Act were being looked into for allegedly targeting US companies unfairly.

Regulators reportedly slowed down their investigation into X after Trump was elected as they sought to assess the potential political fallout of looking into the firm of one of Trump’s closest allies, one person said.

Amid escalating tensions between the EU and US over trade, authorities decided to push ahead with the probe, the source reportedly added.

‘We have always enforced and will continue to enforce our laws fairly and without discrimination toward all companies operating in the EU, in full compliance with global rules,’ a spokesman for the European Commission said in a statement, without commenting specifically on X.

The platform also faces a second investigation by the EU which has a broader scope, with officials said to be gathering evidence that X’s hands-off approach to policing user content has made it a hub of illegal hate speech.

It could face further penalties if it is found to be inadequately dealing with hate speech, disinformation and other material that is seen to be undermining democracy in the EU, two sources said. 

When the EU Commission announced its preliminary findings that X had breached the DSA last year, Musk hit back by threatening legal action.

The investigation into X was opened in 2023 and officials issued a preliminary ruling last year stating that the platform had violated the law

He wrote on X that the bloc’s governing body had offered to make an ‘illegal secret deal’ with his company so it would not have to pay the fine in exchange for quietly censoring users – a claim the EU rejected. 

Musk has repeatedly criticised European policies on social media as a form of censorship, and has regularly waded into rows concerning the EU and European politics. 

Last night, he took to X to condemn a decision by France’s top court to bar far-right politician Marine Le Pen from running for office after she was found guilty of embezzling EU funds.

‘Free Le Pen!’ he wrote in response to a post by Trump which claimed that the decision to charge the National Rally matriarch, who intends to run for President in France, amounted to a ‘witch hunt’.

Musk, who has also used his platform to attack German Chancellor Olaf Scholz and show his support for a far-right party in Germany, said the move against Le Pen would ‘backfire, like the legal attacks against President Trump’.