EU considers calculating X fines by including revenue from Musk’s other firms

Musk could face DSA fines of up to 6% of global revenue—including SpaceX sales.

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[pogoandthestix]

Good

 

[mir-teiwaz]

Honestly, that sounds ridiculous, but maybe that's the sort of ridiculous we need to decouple billionaires and information distribution. (Except that if Elon gets out of the market, he will just be replaced by someone else with deeper pockets than sense and a greater inclination to listen to his legal team)
It's clowns all the way down in this world.

 

[Selethorme]

completely separate legal entities for the behavior of one common shareholder.

We're still pretending that's true? Musk already moved a massive shipment of Nvidia GPUs from Tesla to X. He clearly treats all of them, including Tesla, as fully fungible.

 

[dollyllama]

Genius! Why didn't Elon think of that?

 

[stubbornengineer]

Sounds like the leeway here is intented to get around all kinds of holding shenanigans and maybe also for rich dudes financing an influence operation designed not to make money but to manipulate the gerenal public

 

[Lord Evermore]

I don't see how they can consider completely separate businesses as being related just because the owner of one also owns another. MUSK personally should be on the hook for any fines, and any financial calculations should be based solely on the operations of the individual companies. How much money SpaceX makes is not related to how much money X/Twitter makes. X isn't even a subsidiary of SpaceX like Starlink, where it would maybe make sense to do this. This just seems like they're making a huge reach just to threaten Musk/X or to be able to get what they want when doing it the normal way would fail.

 

[traumadog]

We're still pretending that's true? Musk already moved a massive shipment of Nvidia GPUs from Tesla to X. He clearly treats all of them, including Tesla, as fully fungible.

Doesn't Tesla still consider Twitter as their official source of company information?

 

[Nowicki]

Leave it to our friends across the pond to put the fear of regulation into businesses. We should be so lucky to do it ourselves, but for now this will do.

Thanks again EU!! You make our markets, and products better for everyone. If only they could remove unlimited dark money from our political systems.

 

[Celery Man]

Musk is all about synergy between his companies when it’s time to hype things up - Starship delivering Cybertrucks to the Mars colony inside Boring Company tunnels with X as the payment app for this brave new world!

But when it’s time to pay the piper, his companies are as separated as Musk and his exes.

Funny, that.

 

[Lord Evermore]

We're still pretending that's true? Musk already moved a massive shipment of Nvidia GPUs from Tesla to X. He clearly treats all of them, including Tesla, as fully fungible.

In a practical and even moral manner, it might be that way. But from a legal standpoint, how can it possibly be legal to make one company responsible for the operations of another? Without actually introducing a law about it, I mean. If they do that, then yeah, do it, but not just off the cuff.

 

[Selethorme]

I don't see how they can consider completely separate businesses as being related just because the owner of one also owns another

Because they're not separate businesses. Musk frequently uses assets from one to support others. He bought SolarCity from himself using Tesla money. He transferred a bunch of Nvidia GPUs Tesla had ordered to X. He used Starlink, under SpaceX, to try to evade Brazilian court orders to block X in the country. He runs these companies as if they're one, and so he can be treated as if they are.

 

[DaveSimmons]

I don't see how they can consider completely separate businesses as being related just because the owner of one also owns another. MUSK personally should be on the hook for any fines, and any financial calculations should be based solely on the operations of the individual companies. How much money SpaceX makes is not related to how much money X/Twitter makes. X isn't even a subsidiary of SpaceX like Starlink, where it would maybe make sense to do this. This just seems like they're making a huge reach just to threaten Musk/X or to be able to get what they want when doing it the normal way would fail.

As others mention, Musk treats all "his" companies as sharing resources and staff based on his whims.

Loot AI GPUs from one, have staff "volunteer" to switch companies but not payroll for another.

It might or might not hold up to judicial review but in practice they are not fully separate companies.

 

[Maxipad]

Elon's lawyers must be smiling a lot with each new ruling like this.

They must love working for Elon. The billable hours!

 

[Celery Man]

First the EU taps into revenue they can't make on their own by fining American tech. Now they're looking to indirectly fine the US Government since that's the largest customer of SpaceX.

There’s a real easy solution to avoiding the EU’s draconian business regulations - don’t do business in the EU.

 

[Selethorme]

In a practical and even moral manner, it might be that way. But from a legal standpoint, how can it possibly be legal to make one company responsible for the operations of another?

Because you can't have it both ways. You can't act as a singular entity and then pretend to be separate on paper. At least, not successfully.

 

[Selethorme]

have staff "volunteer" to switch companies but not payroll for another.

Ooh, that's a good one, I forgot about that. That's possibly even more damning. Transferring staff without payroll changes makes it very clear the companies are coordinating.

 

[Celery Man]

Because they're not separate businesses. Musk frequently uses assets from one to support others. He bought SolarCity from himself using Tesla money. He transferred a bunch of Nvidia GPUs Tesla had ordered to X. He used Starlink, under SpaceX, to try to evade Brazilian court orders to block X in the country. He runs these companies as if they're one, and so he can be treated as if they are.

The Boring Company even started as an internal SpaceX project before it was spun off as a separate company. They were using SpaceX engineers and property to test the tunneling machines (which is why the first tunnel was in the SpaceX parking lot).

 

[Celery Man]

All kinds of shit like that occurs in the corporate world on a daily basis and they get away with it because the laws allow it.

So we just throw our hands up and capitulate then?

 

[OrangeCream]

I couldn't think of a faster way to scare off businesses when you can punish completely separate legal entities for the behavior of one common shareholder.

How can you argue that these are completely separate entities though?
https://www.cnbc.com/2024/06/04/elo...hip-ai-chips-reserved-for-tesla-to-x-xai.htmlMusk diverted a sizable shipment of AI processors that had been reserved for Tesla to his social media company X, formerly known as Twitter.

Musk very much acts as if there is no separation between himself and his companies:
https://aaronhall.com/piercing-the-corporate-veil-vs-alter-ego-liability-key-legal-differences/

Can't believe these people are serious.

I don't think people have thought this through very well. This will expose thousands of businesses in Europe to frivolous lawsuits.

Only if they also act in a manner that violates the legal separation between entities.

 

[Rick C.]

I couldn't think of a faster way to scare off businesses when you can punish completely separate legal entities for the behavior of one common shareholder.

Can't believe these people are serious.

I don't think people have thought this through very well. This will expose thousands of businesses in Europe to frivolous lawsuits.

Not at all. This is simply saying, these are the rules we expect you to operate by. If you cross the line, you will be fined, which he did. Play honesty, nicely and fairly, and there's no problem.

 

[Selethorme]

All kinds of shit like that occurs in the corporate world on a daily basis and they get away with it because the laws allow it.

You could just say you know nothing about law and be done with it, because no, they don't. This is the exact functioning of several majorly different parts of the government. There's the most direct answer that this is classical antitrust. There's also the reason only Tesla is public- running a publicly traded company allows significantly more oversight, and Elon couldn't pull these shenanigans without facing major shareholder lawsuits if SpaceX or X were also publicly traded. You can't take value from one publicly traded company you control and give it to another. It'd likely catch you an embezzlement charge.

 

[OrangeCream]

The decisions should be consistent with how other businesses are treated.

Would Facebook and Instagram be fined based on their individual figures, or the combined figures of Meta?

Would fines levied on Google include revenues in Alphabet?

X and SpaceX should be treated the same.

Only if X, Musk, and SpaceX act the same as other corporations.

Musk very much acts as if X is his personal platform, which means Musk potentially becomes liable for all of X’s actions:
https://aaronhall.com/piercing-the-corporate-veil-vs-alter-ego-liability-key-legal-differences/
You really don’t need to defend Musk, he has an army of lawyers at his disposal.

 

[traumadog]

I don't see how they can consider completely separate businesses as being related just because the owner of one also owns another. MUSK personally should be on the hook for any fines, and any financial calculations should be based solely on the operations of the individual companies. How much money SpaceX makes is not related to how much money X/Twitter makes. X isn't even a subsidiary of SpaceX like Starlink, where it would maybe make sense to do this. This just seems like they're making a huge reach just to threaten Musk/X or to be able to get what they want when doing it the normal way would fail.

There's plenty of precedent where one wholly-owned company's assets are shifted to another wholly-owned company to avoid liabilities...

Like how Free Speech Systems suddenly has a $54 M "preferred loan" from PQPR Holdings, LLC when Alex Jones was given a default ruling against him...

 

[Rick C.]

There’s a real easy solution to avoiding the EU’s draconian business regulations - don’t do business in the EU.

Or play by the rules. How original, eh?

 

[lolware]

There’s a real easy solution to avoiding the EU’s draconian business regulations - don’t do business in the EU.

Let’s just hope Musk will come to this conclusion, for the sake of Europeans.

 

[symbolic-logician]

I couldn't think of a faster way to scare off businesses when you can punish completely separate legal entities for the behavior of one common shareholder.

I'm totally fine with big businesses getting scared. They won't leave all that juicy profits and maybe they are forced to do things that benefit consumers. If they get scared and leave, I'm sure another business will step in and provide better service within European laws. Capitalism!

 

[Carewolf]

I couldn't think of a faster way to scare off businesses when you can punish completely separate legal entities for the behavior of one common shareholder.

Can't believe these people are serious.

I don't think people have thought this through very well. This will expose thousands of businesses in Europe to frivolous lawsuits.

They are not separate legal entities if Musk can freely move capital and resources between them. I would include Tesla as well since he has been doing exactly that and as long as Tesla allows it they are legally the same entity

 

[OrangeCream]

First the EU taps into revenue they can't make on their own by fining American tech. Now they're looking to indirectly fine the US Government since that's the largest customer of SpaceX.

Blame Musk for not maintaining the legal separation between Musk and his various corporate interests. When Musk treats X has his personal mouthpiece, makes business decisions that benefit him over his corporate responsibility, and blurs the lines between X, Tesla, Starlink, and SpaceX, then it is in fact reasonable to say they are all extensions of Musk’s common legal liabilities.

 

[numerobis]

This will expose thousands of businesses in Europe to frivolous lawsuits.

If thousands of businesses in Europe are held by assholes who commingle company assets and then break the law, then that seems like a problem that should be addressed.

 

[JohnCarter17]

I don't see how they can consider completely separate businesses as being related just because the owner of one also owns another. MUSK personally should be on the hook for any fines, and any financial calculations should be based solely on the operations of the individual companies. How much money SpaceX makes is not related to how much money X/Twitter makes. X isn't even a subsidiary of SpaceX like Starlink, where it would maybe make sense to do this. This just seems like they're making a huge reach just to threaten Musk/X or to be able to get what they want when doing it the normal way would fail.

Nope.

Note when Elon reallocates resources (CPUs, programmers, etc) as he sees fit between companies.

 

[OrangeCream]

Okay am I understanding this right? The EU is defining X as the provider not in compliance with EU law and Musk as the "entity" responsible for ensuring X (the provider) is in compliance. Instead of focusing their fine on the provider they are considering focusing the fine on the entity (Musk) and so all his privately held revenue sources can then be considered a legit measure for the size of a fine?

Yes. That is in fact how Musk acts, so it seems the EU considers Musk to be the one they are fining.

What’s the phrase? Play stupid games, win stupid prizes.

He routinely violates the legal separation between his companies, which means he is the legal entity responsible for them.