U.S. steps into X appeal over EU fine in broader tech regulation clash

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U.S. joins X-EU tech fine case

Highlights

The U.S. Department of Justice filed to intervene in X's appeal at the EU General Court, challenging a 120 million euro Digital Services Act penalty.
The DOJ objects to the European Commission's method of calculating fines using combined Musk-owned company revenues and claims DSA overreaches EU jurisdiction.
The dispute underscores escalating transatlantic tensions, as both X and Apple appeal major EU fines—120 million euros for X, 500 million euros for Apple—while Brussels increases scrutiny over X's Grok AI integration.

DOJ intervention in Luxembourg court case

As reported by Financial Times, the U.S. Department of Justice on Thursday files an application to intervene in two cases brought by Musk and X before the EU's General Court in Luxembourg, where they seek annulment of a 120 million euro fine imposed by the European Commission.

Assistant attorney general Brett Shumate says the Commission is trying to extend its regulatory authority to American companies that are not present or operating within its jurisdiction. He adds that Washington will not tolerate what it describes as regulatory overreach aimed at U.S. innovation and economic growth.

The Commission fined X 120 million euros in December last year under the Digital Services Act, the first penalty issued under the regime. Brussels says the platform breaches rules on transparency, provides insufficient access to data and uses a deceptive design for its blue-tick verified account system.

In its statement, the DOJ says the DSA improperly extends legal scrutiny to Musk as a private individual and draws in separate U.S. corporate entities under his ownership. It also argues that the Commission calculates the fine using combined global annual revenue from other Musk-controlled companies rather than X revenue generated within the EU's jurisdiction.

Wider pressure on U.S. tech groups

The case adds to a broader transatlantic dispute over how the EU polices major technology companies. The DSA has become a flashpoint as the Trump administration backs arguments from U.S. groups that Brussels is unfairly targeting American businesses and infringing free speech principles championed by the Maga movement.

Several senior administration figures, including vice-president JD Vance, criticise the EU's decision to fine X. Trump has denounced such penalties as overseas extortion and a form of taxation, underscoring the political weight the White House is attaching to EU enforcement actions.

The dispute also reaches beyond X. The EU is separately investigating the platform over possible additional DSA breaches, including whether it properly assesses and mitigates risks tied to the integration of the Grok AI chatbot for EU users.

Apple is also appealing a 500 million euro fine under the related Digital Markets Act over alleged anti-competitive behaviour in its App Store. Meanwhile, X's corporate structure has become more complex since its March 2025 merger with xAI, which is later acquired by SpaceX ahead of the rocket company's public listing in June this year.

In our earlier coverage of the U.S. Department of Justice stepping into X and Elon Musk’s cases before the EU’s General Court in Luxembourg, we outlined Washington’s bid to support annulment of the European Commission’s €120 million Digital Services Act fine. We also explained the U.S. argument that the Commission is overreaching by extending liability across Musk-controlled entities and relying on global turnover, turning the case into a test of how far EU digital enforcement can reach U.S.-based tech groups.

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