The European Union is preparing to levy a fine exceeding $1 billion against Elon Musk’s platform X (formerly Twitter), escalating tensions in an already deteriorating transatlantic relationship. European regulators have reportedly weighed the risks of sparking further conflict with both Musk and the Trump administration, but are moving forward after months of mounting violations and resistance from the U.S.-based tech giant.

Sources close to the proceedings say the fine stems from X’s repeated noncompliance with the EU’s Digital Services Act (DSA), which mandates stronger content moderation, transparency standards, and accountability from digital platforms. European authorities have accused X of spreading disinformation, failing to moderate hate speech, and ignoring repeated warnings to clean up its platform.

The decision to proceed with such a steep penalty comes at a politically fraught moment. President Trump’s aggressive trade policies and rhetorical attacks on European leadership have left relations strained. EU officials reportedly debated whether a fine against Musk would serve as a proxy battle in a broader transatlantic standoff. But internal documents and public sentiment across member states appear to support taking a stand against what one EU lawmaker called “unchecked American techno-authoritarianism.”

X’s CEO, Elon Musk, has remained defiant, accusing Europe of censorship and claiming the platform’s free speech stance is “non-negotiable.” Meanwhile, Trump allies in the U.S. have threatened retaliatory tariffs or regulatory crackdowns on European tech firms should the fine be enforced.

Behind the scenes, there is concern that Musk’s proximity to Trump—who has repeatedly praised the billionaire—may insulate him from domestic political consequences. But in Europe, leaders have grown wary of U.S. inaction and increasingly willing to draw their own lines.

The European Commission is expected to formally announce the enforcement action later this week, with Musk expected to challenge it in court. Whether the fine succeeds in changing behavior—or only deepens the standoff—remains to be seen.