The High Stakes of Disinformation: How Elon Musk's Empire Faces a European Challenge

The digital age brought unprecedented information access, but with that goldmine came an iron curtain of disinformation that tech titans such as Elon Musk are now also trying to dismantle. If truth is the most precious resource, and the most endangered, the European Union’s hard-nosed prompt to eradicate disinformation on X (formerly Twitter) can illustrate the price of failure; the bill will be so substantial that it will endanger not just X but Musk’s entire world business empire.

The Digital Services Act: A New Era of Accountability

The EU’s Digital Services Act (DSA), which took effect in 2022, means that social networks like Facebook and Instagram are legally responsible for the removal of illegal content and disinformation. The DSA is a law, not just a regulation – which means that there is a very specific way it must be obeyed. Companies that do not follow it face fines of up to 6 per cent of their annual global revenue. That’s an expensive error.

Musk's X Under the EU Microscope

As a result, X now resides within the turbulent regulatory vortex of the EU. Coming from the European Commission (EC), investigations are attempting to identify whether X has failed to meet the obligations set out in the DSA, especially as it pertains to risk management, content moderation and transparency. The penalties that X may face are substantial, but the effects may extend way beyond a single company.

Elon Musk's Interconnected Empire at Risk

Regulators have foreshadowed this by giving hints that Musk’s fine could be calculated by the aggregate revenue of his ‘family of companies’ (one inference). The penalty would tie his hands by factoring into it the revenues not just from Twitter but also his AI companies, SpaceX, Neuralink, and the Boring Company. A close reading of the Twitter-Musk settlement illustrates how regulators are trying to solve the problem of the tangled relations between Musk’s various business endeavours – and holding him responsible for the governance of his digital platform. Musk’s most-public-facing business, Tesla, doesn’t fall under the category of the ‘family of companies’ since Tesla is publicly listed.

Navigating the Regulatory Waters

From the outset, conversations between Musk and EU officials did not run smoothly. There has been some epic back-and-forth between Musk and then-EU Commissioner Thierry Breton in particular. With Breton now gone from the EU and replaced, there is an X-factor to the whole equation. And – going forward – the greater of the two unknowns in this regulatory drama will almost certainly be Vestager.

The Implications of an Expansive Penalty

If the EU decides to impose a fine equal to the revenues of Musk’s wider portfolio, the financial cost could dwarf the biggest penalties issued to date – and show that tech czars can be made to pay for their platforms’ impact on democratic discourse and truth.

The Executives' Burden: Leading in the Age of Digital Responsibility

Against this backdrop, executive culpability – especially for those overseeing social media companies and technological businesses – cannot be dodged. Musk’s predicament, and the liabilities now facing his companies and him, illustrate the kinds of commitments executives more generally owe to safeguarding a healthy and functional digital ecosystem by ensuring that the channels they produce and preside over cannot become mouthpieces for harmful disinformation.

EXECUTIVE Leadership in the Spotlight

His position, as steward of an interplanetary empire (with SpaceX), a posthuman brain (with Neuralink), and advanced transportation (with the Boring Company), is unlike anyone else’s, and each choice he makes cascades across a whole range of industries on a scale that is unprecedented in shaping not only technological futures, but the structures of digital information. The EU’s action is a wake-up call to CEOs to take their responsibilities seriously and put their ambitions on an equal footing with their determination to do digital ethics and compliance the right way.

Understanding "Executive"

Finally, it seems fitting to explain what we mean by ‘executive’. It’s more than a title; it’s a commitment to leadership, responsibility and the vision needed to sail the modern seas of the business – and digital – worlds. For Musk and others, it’s the challenge of how to build technological empires that suit the broader norms and laws of society globally. Europe’s actions show that the age of digital responsibility has dawned. Executives around the world must lead their businesses not just to a new world of innovation, but to a new world of harmony with society’s values.

Put differently, the changing story of Musk’s showdown with EU rules about disinformation on X reflects a larger narrative about accountability for the digital era, a story about the role of executive leadership in making sure that the drive for innovation and profits does not drown out the values of truth and honesty in our digital commons.