Elon Musk’s Twitter takeover sets up a potential clash with Europe

After Elon Musk’s $44 billion deal to buy Twitter, EU officials have a message for the eccentric tech billionaire: follow the rules.

Over the weekend, the European Union provisionally greenlit the Digital Services Act, which forces large tech companies to more aggressively police content on their platforms.

User-generated content platforms like Twitter and Facebook will be required to implement robust content moderation systems to ensure they can quickly take down illegal material such as hate speech, incitement to terrorism and child sexual abuse.

Musk is one of Twitter’s most popular users and has used it for everything from making announcements about Tesla and his other companies to posting memes and attacking his critics.

He has previously called himself a “free speech absolutist” and says he wants to reform Twitter as a “digital town square” with fewer restrictions on what users can say.

That could have huge ramifications for the way content is moderated on Twitter — a key concern for regulators looking to rein in digital giants over the spread of hate speech and disinformation online.

At this stage, it’s unclear what exactly Musk plans to do with Twitter. And the process of him buying the company is one that’s likely to take several months, if not years.

But officials stateside have raised concerns about the possibility of Musk reinstating Donald Trump’s Twitter account. The former president was banned from the platform after his supporters rioted in the US Capitol building on Jan. 6, 2021. For his part, Trump says he does n’t plan to return.

Cedric O, France’s digital minister, said that while there are “some interesting things” Musk wants to push for at Twitter, the EU’s new Digital Services Act “will apply regardless of the ideology of its owner.”

The DSA is expected to come into force as early as 2024. Companies that fall foul of the rules risk facing ends of up to 6% their global annual revenues — just over $300 million for a company like Twitter, based on 2021 sales figures.

Thierry Breton, the European commissioner for the internal market, warned Musk that he will have to comply with the bloc’s new digital regulations.

“Be it cars or social media, any company operating in Europe needs to comply with our rules — regardless of their shareholding,” Breton tweeted Tuesday.

“Mr Musk knows this well. He is familiar with European rules on automotive, and will quickly adapt to the Digital Services Act.”

Breton, a former CEO of French IT consulting firm Atos, is seen as a key architect of the European Union’s digital reforms. Alongside the Digital Markets Act, which seeks to curb the dominance of internet giants, the DSA is part of a bold plan by the bloc to regulate Big Tech.

A push for more lax vetting of online content could also put Musk on a collision course with the UK, where policymakers are looking to introduce measures of their own for cracking down on harmful content.

Britain’s Online Safety Bill would make it mandatory for social media services to tackle both illegal posts as well as material that is “legal but harmful,” a vague definition that has attracted criticism from some in the tech industry over concerns that it may stifle free speech .

A spokesperson for the UK government was not immediately available for comment when contacted by CNBC.

The stakes for platforms like Twitter would be even higher under the Online Safety Bill, which threatens jail time for company executives for serious violations, as well as penalties of up to 10% of annual global sales.

The legislation, which is yet to be approved by UK lawmakers, is expected to become law later this year.