The investigation was launched after information from two unidentified individuals, including a parliament member and a senior government official, was received in January, leading to concerns over potential political bias.

X has refused to comply with French authorities' demands for internal data, citing fears over impartiality and the risk of excessive police powers, such as wiretapping.

This legal action occurs amid broader EU regulatory challenges, including tensions with the U.S., which threaten to complicate enforcement of the Digital Services Act (DSA) and impact tech firms' operations.

Investors are advised to hedge against regulatory risks, focusing on compliance-driven innovation and sector ETFs, as the regulatory environment remains uncertain.

The outcome of the French investigation could serve as a critical test for the future of technology governance and regulatory resilience, influencing tech stock evaluations.

As of mid-2024, X faces potential fines exceeding billions of euros due to alleged breaches of the DSA, with criminal scrutiny intensifying.

The investigation marks a shift from civil to criminal oversight, with possible penalties including up to 10 years in prison for executives and fines over 6% of global turnover.

Musk's X faces a tough path to profitability under the DSA, which may require costly algorithm changes conflicting with free speech principles, while a softer EU stance could undermine regulatory credibility.

Elon Musk's social media platform, X, is under investigation by French prosecutors for alleged manipulation of its algorithm for foreign interference, a move Musk claims is politically motivated.

French officials, including Bothorel, emphasize that no entity is above the law and highlight the importance of responsibility and oversight in safeguarding democracy.

The investigation underscores ongoing tensions between tech companies and regulators over data privacy and algorithm transparency, with European startups seeing growth opportunities amid a funding gap.

France's 2023 LOPMI law has expanded government powers to prosecute platform managers, already leading to the detention of Telegram's CEO for unrelated reasons.